A liquefied natural gas tanker has headed for the Strait of Hormuz, following an announcement by President Trump that he had struck a deal with Iran for the reopening of the chokepoint. Itan confirmed the preliminary agreement.
The agreement is scheduled to be signed on Friday, with details yet to be revealed. There will also be a 60-day ceasefire period until negotiations are completed on all conditions of the end of the war. Iran has demanded and received commitment for an end to the war in Lebanon, an unfreeze of oil funds frozen by the U.S. as sanction action, and lifting of sanctions on Iranian crude.
The LNG tanker that is currently heading for the Strait to test whether this time the deal talk is serious has been stuck in the Persian Gulf for more than three months, Bloomberg reported. The start of hostilities in the region trapped millions of tons of liquefied gas and disrupted production, as Iran retaliated against the United States by striking Gulf states’ energy infrastructure alongside U.S. facilities. Some of these strikes damaged Qatar’s LNG production and processing hub, taking a solid chunk of global supply offline.
The LNG carrier is moving north of the UAE, sailing towards Oman, Bloomberg also said in its report, citing ship-tracking data. The vessel is chartered by an Indian state-owned energy company and had loaded its cargo at the Ras Laffan hub around March 1, before Iran began striking Qatar’s LNG facilities.
Following the news of the peace deal, natural gas prices in Europe shed 5.8% earlier today, according to Bloomberg. That’s despite a continued force majeure on QatarEnergy’s Ras Laffan hub and a strike at one of the biggest LNG projects in Australia that has the capacity to produce over 9 million tons of the fuel annually.
By Irina Slav for Oilprice.com
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