Latest: Europe’s benchmark gas price rose above 90 euros per megawatt hour on Tuesday for the first time since 2022, Bloomberg reported, extending a run that had already taken prices above 88 euros on Monday, the highest since December 2022, according to TradingView News. The advance comes with European storage at 74.31 percent of capacity on October 18, below typical levels for the time of year, and LNG flows from the Gulf about 80 percent lower than last year, leaving Europe and Asia competing for the same spot cargoes into winter.
Liquefied natural gas prices on the Asian spot market topped 30 dollars per million British thermal units for the first time since December 2022, Bloomberg reported, extending a run above 25 dollars that has lasted about a month as winter demand builds. The latest jump followed a reported strike on an LNG tanker in the Gulf of Aden, off the Yemeni coast: the UK Maritime Trade Operations centre said an LNG carrier was approached southeast of Al Mukalla by a skiff that fired two shots, and the tanker’s security team fired two shots in return.
Against that backdrop, a carrier loaded with Qatari LNG is sailing north through the Red Sea, potentially speeding delivery to European customers in a rare transit through waters exposed to Houthi attack. The tanker, which loaded in Qatar in August, is signalling Poland as its destination, according to ship tracking data compiled by Bloomberg. Poland’s Orlen has a long term supply contract with QatarEnergy, though shipments under the deal were cancelled after the exporter’s Ras Laffan plant was hit by drone strikes in March. Ship tracking data suggest the Poland bound carrier was the only LNG tanker in the region at the time of the UKMTO report, and that it has since continued its journey. QatarEnergy did not immediately respond to requests for comment. Avoiding the Red Sea typically means sailing around the Cape of Good Hope, adding almost two weeks and extra cost to a one way journey.
The transit comes as European natural gas prices hit their highest in almost four years and the continent struggles to refill inventories: reserves are at their lowest seasonal level in over a decade, European storage sites are only 74 percent full this week against a five year seasonal average of around 89 percent, and Europe is paying up for supply. In Asia, the price level is starting to ration demand, with less wealthy buyers turning increasingly to coal, an option most of Europe no longer has after a decade of coal plant closures.