• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business Energy

LNG market faces disruption as Red Sea closure forces risky detours

1 year ago
in Energy, Features, highlights, Home, home-news, latest News, Markets
2 min read
0 0
0
32
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

LNG market faces disruption as Red Sea closure forces risky detours

The last LNG carrier that passed the Bab el Mandeb strait off the Yemeni coast did so in February. Since that month, there has been no LNG traffic via the once major energy chokepoint as vessels diverted around Africa—or changed destinations entirely.

When the Houthi attacks on ships traversing the Red Sea prompted the redirection of maritime trade in the area, multiple analysts tried to gauge the significance of the events. Most seemed to agree that the rerouting of maritime transport would make goods more expensive and deliveries slower. LNG was no exception, with analytical outlets pointing towards the tightening of LNG carrier supply because of the longer journeys and the potential for market fragmentation.

To date, this fragmentation is a fact. Qatari liquefied natural gas is now mostly going to Asia—and Russian LNG is going to Europe. U.S. LNG is going to both places, but now some forecasters are warning that a supply outage anywhere would affect the market more severely than it would have before February.

The Oxford Institute for Energy Studies said in a February analysis of the situation that Red Sea ship diversion would make Europe more reliant on U.S. LNG as Qatari LNG becomes more difficult to ship there, while that same Qatari LNG would go more to Asia. This is exactly what has happened. Qatari is selling more liquefied gas to Asian buyers while Europe is buying more U.S. gas—Russian, too.

Bloomberg this week reported shipping data showing that Qatari LNG exports to Asian countries had risen to the highest since 2017 this year while Russia increased its LNG shipment to Europe, despite EU threats of sanctions and bans on these imports. Yet the report also sounded a note of caution—if a production outage occurred in any of the major producing countries, compensating for it by another producer would be tougher than it was before February.

What this means is that the global LNG has become more fragile than before, with price spikes more likely in case of any change in the balance between supply and demand. The recent outage at the Freeport LNG plant, which led to higher prices for U.S. LNG was a good example of this. Now, it’s the Gorgon LNG project in Australia that has been suspended due to a mechanical fault and prices are once again up, because that outage has coincided with seasonally rising demand in Asia.

RelatedPosts

MTN Nigeria Now the Most Capitalized Stock in Nigeria

Nigerian Stock Market Creates Largest Pool of Billion-Dollar Stocks in 2025

OPEC+ Nears Decision Point on Next Oil Output Hike

According to Bloomberg, the solution in such situations involves cargo swapping, with U.S. producers sending their own LNG to Europe and buying other, likely Middle Eastern, cargos for their clients in Asia, for instance, to fulfill their contractual obligations. This appears to be the new normal for LNG exports since it does not look like the Houthis are about to stop shooting at ships in the Red Sea.

For now, the situation appears to be relatively easily manageable. While the supply of LNG carriers may be a bit tighter than before because of some of these tankers’ longer journeys, the fragmentation of the market suggests most are deployed on regional journeys that are shorter. But demand for gas is expected to rise further as summer begins in the northern hemisphere and demand for air conditioning increases. This might require a lot more cargo swapping, the Bloomberg report has suggested. And this, in turn, may lead to higher prices.

China, the world’s largest LNG buyer, may see another record year for imports, according to PetroChina. The state energy major has predicted an annual increase in imports of between 9% and 12%. In the first quarter alone, China imported 20 million tons of the superchilled fuel.

Meanwhile, EU sanctions targeting Russia’s LNG industry could disrupt supply by making it harder for Novatek to send cargoes to Asia. This, according to analysts cited by Bloomberg, would mean more Russian LNG staying in Europe in a rather ironic twist, and less going to India and China—unless Novatek does more cargo swaps.

Yet EU sanctions on Russian LNG would also affect international LNG traders such as Shell, TotalEnergies and Germany’s new state entity Securing Energy for Europe GmbH, which would need to find alternative supply for their non-European clients if Russian cargos become too problematic to buy. And the Red Sea will remain closed for LNG shipping for the observable future.

It appears, then, that the LNG market will remain in its current fragmented—or perhaps segmented—state at least for a few more months or even more should the Israel-Hamas war extend beyond 2024. The industry will adapt, as it has so far. Yet supply security may become a bit more challenging for key import markets. In this situation, all it would take to disrupt the market would be a production outage of the sort that appears to be quite frequent in large LNG projects.

Tags: LNG marketLNG market faces disruption as Red Sea closure forces risky detours
No Result
View All Result

Highlights

Europe’s Energy Future Hinges on Global Powers

US Companies Cut Investments in China to Record Lows, Here’s Why

How AI is Rewriting and Enhancing Water Risk Management

SheFarms Broiler Edition Kicks Off in Greater Accra

PharmAccess Ghana, Healthcare Federation of Ghana sign SafeCare License Agreement; to use Newest ISQua-Certified Version 5

Tanzania Sink Burkina Faso to Delight Home Crowd In TotalEnergies CHAN 2024 Opener

Trending

Features

MTN Nigeria Now the Most Capitalized Stock in Nigeria

August 3, 2025

MTN Nigeria Now the Most Capitalized Stock in Nigeria MTN Nigeria has surged to become the most...

Nigerian Stock Market Creates Largest Pool of Billion-Dollar Stocks in 2025

August 3, 2025

OPEC+ Nears Decision Point on Next Oil Output Hike

August 3, 2025

Europe’s Energy Future Hinges on Global Powers

August 3, 2025

US Companies Cut Investments in China to Record Lows, Here’s Why

August 3, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.