Asia’s benchmark LNG prices are set to jump to the highest level in three and a half years in the second half of 2026 as demand is rising amid high electricity summer demand and the EU needs to refill depleted gas storage sites, Morgan Stanley analysts reckon.
The Asian LNG price is expected to increase to $25 per million British thermal units (MMBtu) in the third and fourth quarters of 2026, Morgan Stanley said in a note carried by Bloomberg. The price forecast suggests an upside of more than 30% to the forward curve, the investment bank’s analysts say.
The projected LNG price would be the highest level the Asian LNG benchmark has reached since January 2023, during the energy crisis in Europe, which scrambled for LNG supply to replace Russian pipeline gas.
Following weak demand in March and April this year, LNG consumption and buying have started to recover in many Asian markets amid the urgency to prepare for the summer heat, according to Morgan Stanley’s analysts.
So prices are set for an increase even if the Strait of Hormuz re-opened and LNG cargo traffic was restored today, the bank said.
China is already raising LNG purchases. Its state-controlled energy giants and some private companies are buying and importing the highest volumes of liquefied natural gas since the war in Iran began, as the world’s top LNG importer prepares for peak summer demand and heat waves.
Amid the LNG supply crunch from the Middle East and the approaching summer heat in north Asia, China’s 30-day moving average for deliveries has jumped to 178,000 tons per day, the highest since early February, according to Bloomberg’s estimates. Chinese buyers started to purchase more cargoes in the middle of April and have been keeping a high rate of imports since then.
This suggests that the gas markets in Asia and Europe will tighten as we move into the summer months amid increased demand for cooling and electricity.
By Tsvetana Paraskova for Oilprice.com
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