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Yahoo
15 hours ago
- Business
- Yahoo
LNG Shipping Costs Soar to 8-Month High Amid Middle East Turmoil
LNG shipping costs have surged to the highest in eight months as shipowners assess Middle East risks and hold off chartering vessels, reducing available ships, while price signals in Asia are favoring cargoes going to the Pacific market. Both the Atlantic and Pacific freight rates jumped on Monday to their highest levels since October 2024, but the Atlantic shipping rates were much higher, according to data from Spark Commodities cited by Reuters. Spark Commodities assessed that the daily rate for chartering the most common type of LNG carrier in the Atlantic was $51,750 per day on Monday. That was the highest level since October 3, 2024. The Pacific rate also jumped to the highest since October, to $36,750 per day. At the end of last week, the Atlantic freight rate rallied towards $50,000 per day, the highest this year, as the U.S. arbitrage to Asia is nearing breakeven levels—the arbitrage window for U.S. cargoes to Asia begins to open, Spark Commodities said. Open U.S. arbitrage to northeast Asia encourages shipments from the U.S. LNG export facilities to Asian customers, instead of to Europe. This in turn raises freight demand and lifts freight rates, according to Spark Commodities. 'Recently, rising JKM premiums over TTF in response to the escalating events in the Middle East have pushed US breakevens rapidly higher, and freight rates have rallied alongside this move,' the commodities pricing analysts said, referring to higher Asian LNG prices compared to the European benchmark. 'This rise in global LNG freight rates has been largely due to tight vessel availability, which in turn has been caused by a shift in pricing signals for U.S. cargoes,' Qasim Afghan, an analyst with Spark Commodities, told Reuters. The rise has been additionally fueled by concerns that oil and LNG supplies from the Middle East could be disrupted. Nearly all of the shipments of Qatar, the world's second-largest LNG exporter after the United States, pass through the Strait of Hormuz. By Tsvetana Paraskova for More Top Reads From Read this article on Sign in to access your portfolio
CTV News
15 hours ago
- Business
- CTV News
LNG freight rates hit 8-month top on tight tanker availability, Mideast conflict
SINGAPORE/LONDON — Shipping costs for liquefied natural gas cargoes have rallied to their highest in about eight months with vessel availability tightened by a shift in more ships heading to Asia at the same time as conflict has escalated in the Middle East. The Atlantic freight rate for vessels with two-stroke engines capable of carrying 174,000 cubic meters of LNG, the most common type in the market, was assessed at UA$51,750 per day on Monday, its highest level since Oct. 3, according to pricing agency Spark Commodities. The Pacific freight rate for the same class of ship also surged, with Spark assessing it at $36,750/day on Monday, the highest level since Oct. 25. 'This rise in global LNG freight rates has been largely due to tight vessel availability, which in turn has been caused by a shift in pricing signals for U.S. cargoes,' said Spark Commodities analyst Qasim Afghan. 'This has been further exacerbated by market sentiment around the developing situation in the Middle East,' he said. A recent tender by Egypt to buy up to 160 LNG cargoes through 2026 also drove up demand for vessels. In February, LNG shipping rates fell to five-year lows as the global fleet expanded and higher delivered prices in Europe incentivised U.S. cargoes to remain in the Atlantic versus traveling to Asia. The shorter average journey times increased tanker availability. In the past two weeks however, it has become equally profitable to deliver LNG to both Europe and Asia, so spot cargoes are now incentivised to travel to Asia via the Cape of Good Hope, increasing average voyage times and reducing vessels available for charter, Afghan said. Mideast Tensions The Israel-Iran conflict, in which both countries have been firing missiles at each other, has raised fears Tehran may close the Strait of Hormuz in further retaliation. As a result, shipowners are holding off chartering vessels, which is reducing tanker availability and pushing up prices, said a trade source, who declined to be identified as he was not authorized to speak to the media. Insurance costs for LNG tankers going through the Strait of Hormuz have also increased, said three trade sources, with one adding that the war risk premium has surged by up to five times since the start of the Israel-Iran conflict. Around 20 per cent of global oil and gas demand flows through the Strait of Hormuz, situated between Iran and Oman. Qatar, one of the world's top LNG exporters, sends almost all its supplies via the strait. (Reporting by Emily Chow in Singapore and Marwa Rashad in London; Editing by Sonali Paul)
New Straits Times
a day ago
- Business
- New Straits Times
LNG freight rates hit 8-month top on tight tanker availability, Mideast conflict
SINGAPORE/LONDON: Shipping costs for liquefied natural gas cargoes have rallied to their highest in about eight months with vessel availability tightened by a shift in more ships heading to Asia at the same time as conflict has escalated in the Middle East. The Atlantic freight rate for vessels with two-stroke engines capable of carrying 174,000 cubic meters of LNG, the most common type in the market, was assessed at US$51,750 per day on Monday, its highest level since October 3, according to pricing agency Spark Commodities. The Pacific freight rate for the same class of ship also surged, with Spark assessing it at US$36,750/day on Monday, the highest level since October 25. "This rise in global LNG freight rates has been largely due to tight vessel availability, which in turn has been caused by a shift in pricing signals for US cargoes," said Spark Commodities analyst Qasim Afghan. "This has been further exacerbated by market sentiment around the developing situation in the Middle East," he said. A recent tender by Egypt to buy up to 160 LNG cargoes through 2026 also drove up demand for vessels. In February, LNG shipping rates fell to five-year lows as the global fleet expanded and higher delivered prices in Europe incentivised US cargoes to remain in the Atlantic versus travelling to Asia. The shorter average journey times increased tanker availability. In the past two weeks however, it has become equally profitable to deliver LNG to both Europe and Asia, so spot cargoes are now incentivised to travel to Asia via the Cape of Good Hope, increasing average voyage times and reducing vessels available for charter, Afghan said. MIDEAST TENSIONS The Israel-Iran conflict, in which both countries have been firing missiles at each other, has raised fears Tehran may close the Strait of Hormuz in further retaliation. As a result, shipowners are holding off chartering vessels, which is reducing tanker availability and pushing up prices, said a trade source, who declined to be identified as he was not authorised to speak to the media. Insurance costs for LNG tankers going through the Strait of Hormuz have also increased, said three trade sources, with one adding that the war risk premium has surged by up to five times since the start of the Israel-Iran conflict. Around 20% of global oil and gas demand flows through the Strait of Hormuz, situated between Iran and Oman.
Reuters
a day ago
- Business
- Reuters
LNG freight rates hit 8-mth top on tight tanker availability, Mideast conflict
SINGAPORE/LONDON, June 24 (Reuters) - Shipping costs for liquefied natural gas cargoes have rallied to their highest in about eight months with vessel availability tightened by a shift in more ships heading to Asia at the same time as conflict has escalated in the Middle East. The Atlantic freight rate for vessels with two-stroke engines capable of carrying 174,000 cubic meters of LNG, the most common type in the market, was assessed at $51,750 per day on Monday, its highest level since October 3, according to pricing agency Spark Commodities. The Pacific freight rate for the same class of ship also surged, with Spark assessing it at $36,750/day on Monday, the highest level since October 25. "This rise in global LNG freight rates has been largely due to tight vessel availability, which in turn has been caused by a shift in pricing signals for U.S. cargoes," said Spark Commodities analyst Qasim Afghan. "This has been further exacerbated by market sentiment around the developing situation in the Middle East," he said. A recent tender by Egypt to buy up to 160 LNG cargoes through 2026 also drove up demand for vessels. In February, LNG shipping rates fell to five-year lows as the global fleet expanded and higher delivered prices in Europe incentivised U.S. cargoes to remain in the Atlantic versus travelling to Asia. The shorter average journey times increased tanker availability. In the past two weeks however, it has become equally profitable to deliver LNG to both Europe and Asia, so spot cargoes are now incentivised to travel to Asia via the Cape of Good Hope, increasing average voyage times and reducing vessels available for charter, Afghan said. The Israel-Iran conflict, in which both countries have been firing missiles at each other, has raised fears Tehran may close the Strait of Hormuz in further retaliation. As a result, shipowners are holding off chartering vessels, which is reducing tanker availability and pushing up prices, said a trade source, who declined to be identified as he was not authorised to speak to the media. Insurance costs for LNG tankers going through the Strait of Hormuz have also increased, said three trade sources, with one adding that the war risk premium has surged by up to five times since the start of the Israel-Iran conflict. Around 20% of global oil and gas demand flows through the Strait of Hormuz, situated between Iran and Oman. Qatar, one of the world's top LNG exporters, sends almost all of its supplies via the strait.
Yahoo
a day ago
- Business
- Yahoo
LNG freight rates hit 8-mth top on tight tanker availability, Mideast conflict
By Emily Chow and Marwa Rashad SINGAPORE/LONDON (Reuters) -Shipping costs for liquefied natural gas cargoes have rallied to their highest in about eight months with vessel availability tightened by a shift in more ships heading to Asia at the same time as conflict has escalated in the Middle East. The Atlantic freight rate for vessels with two-stroke engines capable of carrying 174,000 cubic meters of LNG, the most common type in the market, was assessed at $51,750 per day on Monday, its highest level since October 3, according to pricing agency Spark Commodities. The Pacific freight rate for the same class of ship also surged, with Spark assessing it at $36,750/day on Monday, the highest level since October 25. "This rise in global LNG freight rates has been largely due to tight vessel availability, which in turn has been caused by a shift in pricing signals for U.S. cargoes," said Spark Commodities analyst Qasim Afghan. "This has been further exacerbated by market sentiment around the developing situation in the Middle East," he said. A recent tender by Egypt to buy up to 160 LNG cargoes through 2026 also drove up demand for vessels. In February, LNG shipping rates fell to five-year lows as the global fleet expanded and higher delivered prices in Europe incentivised U.S. cargoes to remain in the Atlantic versus travelling to Asia. The shorter average journey times increased tanker availability. In the past two weeks however, it has become equally profitable to deliver LNG to both Europe and Asia, so spot cargoes are now incentivised to travel to Asia via the Cape of Good Hope, increasing average voyage times and reducing vessels available for charter, Afghan said. MIDEAST TENSIONS The Israel-Iran conflict, in which both countries have been firing missiles at each other, has raised fears Tehran may close the Strait of Hormuz in further retaliation. As a result, shipowners are holding off chartering vessels, which is reducing tanker availability and pushing up prices, said a trade source, who declined to be identified as he was not authorised to speak to the media. Insurance costs for LNG tankers going through the Strait of Hormuz have also increased, said three trade sources, with one adding that the war risk premium has surged by up to five times since the start of the Israel-Iran conflict. Around 20% of global oil and gas demand flows through the Strait of Hormuz, situated between Iran and Oman. Qatar, one of the world's top LNG exporters, sends almost all of its supplies via the strait. Sign in to access your portfolio
