Stories
Top LNG Buyer Warns Qatar Supply Won't Return Soon, Global Prices to Soar
- •Jera Co. Chairman Yukio Kani expects Strait of Hormuz disruptions to persist, limiting Qatar LNG supply.
- •Qatar, once the world's second-largest LNG supplier, is not expected to return to the market soon, according to Kani.
- •LNG spot prices have doubled from last year, with market participants concerned about the upcoming winter.
- •The lack of Qatar LNG has driven spot prices to their highest since late 2022, intensifying competition between Europe and Asia for alternative supplies.
- •Low European gas storage and an EU ban on Russian LNG imports from January are predicted to further increase spot prices, potentially creating a difficult situation for Europe this winter.
Key Questions Answered
Yukio Kani, chairman and CEO of Jera Co., expects disruptions to the Strait of Hormuz to persist and does not anticipate Qatari liquefied natural gas returning to the market soon. Transit through the waterway remains 80% below February levels, and Qatar has extended its force majeure on shipments to November for Asia and December for Europe.
The lack of LNG from Qatar drove spot prices to their highest level since late 2022 last month, with prices currently doubling compared to the same time last year. This tight market and concerns over coming winter heating demands are raising worries among market participants about intensified competition between Europe and Asia for alternative supplies.
Europe is facing potential energy difficulties due to seasonally low gas storage levels, a planned European Union ban on Russian LNG imports starting in January, and ongoing supply shortages from Qatar. If Europe experiences a severe winter, these combined factors will likely force the region to compete aggressively for alternative spot LNG cargoes for heating energy.
