Capital Economics: Prolonged Middle East conflict could pose LNG shortage risks for Asian economies

Golden Ten Data reported on March 11 that economists at Capital Economics pointed out in a research report that if the Middle East conflict continues, Asian economies will face varying degrees of risk of liquefied natural gas (LNG) shortages. The economists stated that almost 90% of LNG transported through the Strait of Hormuz flows to Asia. They noted that regions such as South Korea are heavily dependent on supplies from the Persian Gulf, with 27% and 20% of LNG imports coming from this area, respectively. They explained that, unlike oil, LNG has high storage costs, technical difficulties, and limited storage capacity. They added that if LNG supply disruptions persist, one option for some regions would be to turn to alternative energy sources, such as coal-fired power plants.