LNG Bunker Snapshot: Prices surge on Iran-Israel war
LNG bunker prices have shot up in both Rotterdam and Singapore, driven higher by the war in the Middle East.
Changes in weekly LNG bunker prices:
- Rotterdam up by $45/mt to $835/mt
- Singapore up by $100/mt at $853/mt
Rotterdam
Rotterdam’s LNG bunker price has gained for a third consecutive week, reaching $835/mt. The lateset weekly increase has mainly been driven by a 17% rise in the LNG bunker delivery premium, which has climbed to around $171/mt over the past week.
Prices have also drawn support from a 3% rise in the front-month Dutch TTF Natural Gas contract - Europe’s key gas benchmark - is now at $12.77/MMBtu ($664/mt).
The TTF price has been bolstered by “geopolitical tensions in the Middle East” and “heatwaves expected to increase demand for air conditioning,” according to the Japan Organization for Metals and Energy Security (JOGMEC).
Western Europe experienced unusually hot weather last week, with countries like France and the UK facing significantly above-average temperatures. France, in particular, saw temperatures nearing 40°C.
“TTF prices rose… amid the escalating conflict between Israel and Iran,” said Greg Molnár, gas analyst at the International Energy Agency (IEA). He added that prices are continuing to surge “on the Middle East crisis and fears that the conflict could further escalate.”
As of 20 June, EU underground gas storage levels had climbed to 55.4%. However, levels remain 25.7% lower than the same time last year, according to Gas Infrastructure Europe.
Singapore
Singapore’s LNG bunker price has jumped over the past week, rising by $100/mt to reach $753/mt. The price, which was at a $37/mt discount to Rotterdam a week ago, has now shifted to an $18/mt premium.
Singapore’s LNG bunker prices typically follow the NYMEX Japan/Korea Marker (JKM), whose front-month contract rose by $1.76/MMBtu ($92/mt) over the week to $14.26/MMBtu ($742/mt).
The price increase has largely been driven by “rising tensions in the Middle East,” which have renewed supply concerns, according to JOGMEC.
Japan’s LNG inventories for power generation fell to 2.14 million mt as of 18 June, a decline of 200,000 mt from the previous week, based on data from the Ministry of Economy, Trade and Industry (METI).
The surge was further supported by a 9% increase in LNG bunker premiums, which has climbed to around $112/mt.
Other LNG bunker news
Swedish paper manufacturer Svenska Cellulosa Aktiebolaget has joined Gasum’s liquefied biomethane (LBM) pooling arrangement to meet compliance with the EU’s FuelEU Maritime regulation.
Meanwhile, Seaspan Energy has carried out the first LNG bunker operation at Canada’s Port of Nanaimo, supplying the Eukor-chartered car carrier Lake Saint Anne.
In Japan, an Asuka Cruise vessel became the first to receive an LNG stem at the Port of Yokohama.
By Tuhin Roy
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