LNG market faces extended Hormuz outage, Japanese shipper says

Mitsui OSK Lines, a top Japanese shipping firm, doesn’t expect LNG shipments through the Strait of Hormuz to resume soon, signaling a prolonged disruption that could keep prices elevated and curb demand across Asia.

“As long as this situation continues, it’s almost impossible to carry the LNG cargoes” through Hormuz, Chairman Takeshi Hashimoto said on the sidelines at the Gastech conference in Bangkok on Wednesday. “At the moment, we are quite pessimistic about the near future.”

He said that a peace deal settlement among the parties looks “very, very difficult.” MOL, as the company is called, has stopped sending liquefied natural gas tankers through Hormuz, a strategic waterway that carried about a fifth of global supply before the conflict began.

The disruption has pushed Asian spot LNG prices to their highest level since 2022, with the potential for further gains as winter approaches and heating demand rises. The price surge is already prompting many buyers in Asia to scale back purchases, Hashimoto said.

“People are saying that there are alternative energy supplies possible from the U.S., Canada, Australia or parts of Africa,” he said. “But obviously it would not be enough to cover demand.”