LNG Bunker Snapshot: Rotterdam’s LNG price jumps on Middle East crisis
Rotterdam’s LNG bunker price has surged on Middle East-driven gas market volatility and supply risk concerns, while Singapore’s price has held steady as geopolitical support is offset by weak Chinese demand.
Weekly changes in LNG bunker prices:
- Rotterdam up by $133/mt to $837/mt
- Singapore steady at $720/mt
Rotterdam
Rotterdam’s LNG bunker price has jumped by $133/mt, following gains in the front-month Dutch TTF natural gas contract, which has risen by $2.56/MMBtu over the past week to $13.49/MMBtu ($702/mt).
The rally in TTF has been fuelled by escalating geopolitical tensions in the Middle East, after US and Israeli forces launched a joint strike on Iran that killed the Islamic Republic’s Supreme Leader Ayatollah Ali Khamenei. Iran retaliated with direct strikes on Gulf neighbours, including the UAE and Saudi Arabia, and disrupted traffic through the Strait of Hormuz.
“The market is of course responding very bullishly this morning to the dramatic events of the weekend. Basically, all countries around the Persian Gulf, including Qatar, one of the world’s leading exporters, have become involved in the conflict. The market prices in a lot of risk premium, fearing reduced gas supply,” Mind Energy, formerly Energi Danmark, said.
Any disruption to the Strait of Hormuz poses a significant threat to Europe’s gas market. “More than 20% of the world’s LNG transits the key waterway, with most of that cargo heading to Europe. Any disruption would leave Europe vulnerable to potential tightness during the upcoming stockpiling season,” ANZ Bank’s senior commodity strategist Daniel Hynes added.
EU underground gas storage was at 31.1% as of 20 February, down from 34.4% a week earlier and 25.3% lower year-on-year, according to Gas Infrastructure Europe.
The market was further “supported by forecasts for colder temperatures and an unplanned outage at a Norwegian gas production facility,” according to Japan Organization for Metals and Energy Security (JOGMEC) said.
Singapore
Singapore’s LNG bunker price has remained broadly stable over the past week.
Although “geopolitical risks” have lent some support, this has largely been offset by “weak demand from China,” Daniel Hynes of ANZ Bank said.
“China’s seaborne imports of liquefied natural gas are forecast to plunge to the lowest in almost eight years this month,” said Stephen Stapczynski, Energy Asia team leader at Bloomberg News.
“The drop appears to be partly due to the timing of the six-day holiday, which was in mid-February this year, as opposed to 2025 when it started in late January,” Stapczynski added.
“Weaker demand in the Asian market during the Lunar New Year holidays” has also pressured LNG prices, JOGMEC said.
Other LNG bunker news
An independent study has found that North Sea Port meets the safety and infrastructure requirements to bunker alternative fuels including LNG at its ports in Vlissingen, Terneuzen and Ghent.
By Tuhin Roy
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