Israeli strike on Iran sparks LNG supply concerns in Asia: S&P Global
The S&P report says the "pre-emptive" strikes by Israel against Iranian nuclear facilities come as Asia, where key importers rely heavily on LNG supplies from Qatar, is about to enter the summer demand season
Israel's strike on Iran on Friday (13 June) has heightened tensions across LNG markets in Asia, with shipping companies issuing safety alerts as importers and governments closely monitor potential impacts and assess supply risks, sources told Platts, part of S&P Global Commodity Insights.
The S&P report says the "pre-emptive" strikes by Israel against Iranian nuclear facilities come as Asia, where key importers rely heavily on LNG supplies from Qatar, is about to enter the summer demand season.
"Asia has the highest exposure to LNG exports from the Middle East, as it accounts for around 87%-88% of LNG exports from the region," said Eric Yep, principal analyst of First Take Gas at Commodity Insights.
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"Currently, Asian importers are in conversations with all their suppliers, and other portfolio players and trading houses, to evaluate options on the table in case there is a dash for alternatives," Yep said.
Meanwhile, LNG trading sources in Asia said they are closely monitoring the developing situation and expect impacts on spot prices, although they do not anticipate any immediate supply disruptions at this time.
In Asia, there are reported concerns about potential supply disruptions at the Strait of Hormuz, particularly for China, whose dependency on Qatari LNG imports has increased following its stoppage of US LNG imports since February amid tariff escalations.
Qatar has become China's largest LNG supplier, accounting for 33.4% of total imports over January-April, according to data from the General Administration of Customs.
Asia-Pacific spot LNG prices for July jumped on 13 June, reaching the highest level in over 11 weeks.
Platts assessed the JKM - the benchmark price for cargo delivered to Northeast Asia - for July at $13.444/MMBtu, marking a day-over-day increase of 68.6 cents/MMBtu, or 5.38%.
A spokesperson for Japan's JERA, which procures about 10% of LNG that transits the Strait of Hormuz in the Middle East, said, "Depending on future developments in the Middle East situation, there could be effects on supply and demand in the energy market as well as on resource prices, and we are closely monitoring the situation."
