Asian LNG benchmark surges to $13.133 as Hormuz Strait disruption triggers gas price spike

⑴ On Monday, as military strikes between Israel and Iran and Tehran's retaliatory actions led to disruptions in oil tanker traffic through the Strait of Hormuz, the benchmark price for Asian liquefied natural gas (LNG) surged by more than 20%. According to data from Platts Energy, a subsidiary of S&P Global, the Japan-Korea Marker (JKM), widely used as the Asian LNG benchmark, rose by $2.256 to $13.133 per million British thermal units. ⑵ Aly Blakeway, S&P Global Atlantic LNG Manager, pointed out that about 20% of global LNG must be transported through the Strait of Hormuz, and prolonged disruptions will pose further upside risks for this ultra-cold fuel. He added that Middle Eastern suppliers may seek to fill the gap with US-delivered cargoes, which would tighten supply in the Atlantic basin, as delivered cargoes allow buyers to resell the goods. ⑶ The weekend strikes against Iran suddenly escalated tensions in the Arabian Gulf, with Tehran announcing the closure of the Strait of Hormuz to shipping, thus blocking this critical chokepoint for global oil and gas transportation. In response, the transportation of crude oil, fuel, and LNG through the waterway has been suspended, and satellite data show a backlog of ships near major UAE ports, including Fujairah. Dutch and UK benchmark natural gas prices also rose by more than 25% in early trading on Monday.