The global LNG shipping market has turned sharply higher in recent days, with charter rates for modern LNG carriers surging from roughly $40,000 last week to around $300,000 per day as traders scramble to secure vessels amid escalating disruption in the Middle East.
According to shipbroker Fearnleys’ latest weekly LNG report, cited by Riviera Maritime Media, daily spot charter rates for 174,000-cubic-meter LNG carriers along the U.S. Gulf-Europe route have climbed to approximately $300,000 per day, up about $260,000 compared with last week. Rates on the key U.S. Gulf-Asia route covering Japan, South Korea, Taiwan and China have also surged to $300,000 per day from $42,000 on February 25, while the Australia-to-Asia route has risen to roughly $255,000 per day.
Fearnleys said charterers are now paying as much as 10 times last week’s levels to secure prompt tonnage as the market braces for a potential disruption of LNG flows from the Middle East.
The surge comes as the regional conflict involving Iran has begun to disrupt the global LNG trade. Qatar halted LNG production earlier this week and declared force majeure for some buyers, while tanker traffic through the Strait of Hormuz has effectively stalled amid security concerns.
Qatar and the United Arab Emirates together account for roughly 20% of global LNG supply, making the disruption immediately significant for global gas markets.
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Shipping brokers say the spike reflects more than just a sudden scramble for vessels. With Qatar’s production halted and tanker traffic through the Strait of Hormuz severely disruptyed, traders are already preparing for longer shipping routes and tighter vessel availability. Cargoes that would normally move short distances from the Gulf to Asia may now have to be sourced from the United States, Australia, or West Africa, increasing voyage lengths and pushing up demand for LNG carriers.
Asia is expected to feel the immediate impact. Around 85% of Qatar’s LNG exports normally go to Asian buyers, with major importers including China, India, Japan, South Korea and Taiwan heavily dependent on those volumes.
The disruption is already reshaping LNG pricing dynamics between Asia and Europe. Traders told Bloomberg that Asian spot LNG prices reached $25.40 per million British thermal units earlier this week before easing slightly to $23.80 after U.S. President Donald Trump said the United States would provide political risk guarantees and naval escort support for energy tankers transiting the Strait of Hormuz.
Even with the pullback, LNG prices remain roughly double the levels seen before the conflict escalated and before Qatar halted production, leaving traders scrambling for both cargoes and vessels as the global LNG market tightens.
By Charles Kennedy for Oilprice.com
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