Two tankers hauling liquefied natural gas from the US diverted toward Europe in recent days as Asian demand dipped, signaling temporary relief for the tight global market before winter kicks in.
Appetite for the fuel has lessened among some major buyers in Asia this month, potentially freeing up more cargoes for Europe, which is running out of time to rebuild its unusually low gas inventories ahead of the looming heating season. That’s a big shift from earlier this year when Asian importers were scooping up LNG cargoes from the US and elsewhere, rushing to replace supplies from the Middle East lost because of the Iran war.
On Friday, the Shra’Ouh vessel, which was aiming toward India initially, made a sharp turn north and started signaling the UK as its next potential destination, according to ship-tracking data compiled by Bloomberg. That comes after the Al Kharrarah, which had been heading for a major route to Asia, diverted north toward Belgium.
LNG competition could intensify again when colder weather drives up gas needs in the Northern Hemisphere. While LNG flows through the vital Strait of Hormuz in the Middle East have picked up in recent weeks, they are still far below normal. And “a swift resolution to the US–Iran conflict remains unlikely,” according to a note from Energy Aspects Ltd.
“Northeast Asian spot appetite remains subdued in the shoulder months, but we expect procurement to rise for December–January as heating demand increases,” EA analysts said.