At least two LNG carriers have transited the Strait of Hormuz so far this week, while two others were detected to have engaged in ship-to-ship transfers outside the Strait offshore Oman, tanker-tracking and satellite data compiled by Bloomberg showed on Friday.
The uptick in LNG cargoes managing to exit the Strait of Hormuz signals that the LNG exporters in the Persian Gulf, mostly Qatar and the United Arab Emirates (UAE), are intensifying efforts to have LNG supply push through the chokepoint after months of near-total halt of shipments.
While oil flows from the Strait of Hormuz are estimated to have recovered to about two-thirds of pre-war levels, thanks to dark transits of tankers, LNG flows have been mostly at a standstill over the past six months.
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Unlike crude oil, it’s much more difficult to shuttle-ship LNG through Hormuz and then reload it via a ship-to-ship (STS) transfer as Persian Gulf producers have been doing in recent months to ship oil to customers.
Yet, at least three STS transfers of LNG cargoes offshore Oman outside the Strait have been spotted via satellite images over the past month, according to the data Bloomberg has compiled.
In pre-war times, it was three LNG cargoes per day exiting the Strait of Hormuz.
The choked LNG flows from the Middle East in the past six months have sent gas prices in Asia and Europe to the highest since the 2022-2023 energy crisis as buyers are competing for available supply that doesn’t need to move through the Strait of Hormuz.
The LNG market is tightening as winter approaches and Europe seeks to refill gas storage sites to adequate levels before December.
LNG prices have room to rise by about a third from the current very high levels amid low European gas inventories and fierce competition for spot supply between Europe and Asia, if the winter is colder than usual, analysts and industry executives say.
By Charles Kennedy for Oilprice.com
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