Rising Global LNG Prices
Liquefied natural gas prices surge to multi-year highs amid Hormuz supply disruptions.
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Key Points
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Northeast Asian spot LNG prices rose $2.70 from the previous week to $28.40 per MMBtu for deliveries one to two months ahead, according to Energy Intelligence.
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Shell’s Cederic Cremers described Europe’s storage position as “historically low” heading into late fall; inventories were below 70%, compared with 82% at the same point in 2025 and a five-year average above 80%.
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European benchmark TTF gas prices remained above €80 per megawatt-hour, while the JKM-TTF spread indicated that Europe should be attracting spot LNG cargoes despite its difficulty reaching the 75% storage target.
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INPEX Chief Executive Takayuki Ueda said LNG buyers are becoming less price-sensitive and increasingly view the fuel as “indispensable,” marking a shift from traditional assumptions about demand elasticity.
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Chevron’s Australian LNG operations—Gorgon, with 15.6 million tons of annual capacity, and Wheatstone, with 8.9 million tons—together account for about 5% of global LNG supply; Chevron said Australian LNG is currently trading at a premium in Asia because of Australia’s proximity to the region’s demand center.
Global liquefied natural gas prices have jumped to their highest levels since late 2022 as conflict disrupts shipments through the Strait of Hormuz, the world's busiest oil and gas chokepoint. Energy Intelligence reported that Northeast Asian spot LNG prices rose $2.70 in one week to $28.40 per million British thermal units for near-term deliveries, while European benchmark prices stayed above €80 per megawatt-hour. The squeeze is tightening supply just as winter approaches and European gas storage sits well below seasonal norms.
At least two Qatar-linked LNG shipments crossed the strait this week, Bloomberg reported, though signal jamming and limited traffic make tracking difficult. European storage stands at roughly 68% to 70% full—far below the five-year average of 80%—making it unlikely the region will reach its 75% winter target and intensifying a bidding war with Asia for available cargoes.
Strait Disruption Forces Shipping Workarounds
Producers are finding creative ways to move LNG through the bottleneck despite the Hormuz crisis. Rigzone confirmed that at least two liquefied natural gas tankers have successfully transited the strait this week, signaling that shippers are willing to attempt passages despite security risks. Some cargoes have been transferred between vessels outside the chokepoint to avoid delays and reduce crossing risk.
Europe's Storage Crisis Leaves Winter Vulnerable
European gas inventories have fallen to historically low levels heading into late fall. Shell executive Cederic Cremers described the storage position as "historically low," with reserves below 70%—compared with 82% at the same point last year and a five-year average above 80%, according to Bloomberg. Reaching the EU's 75% winter target now looks out of reach, forcing utilities and industrial users to compete fiercely for spot LNG cargoes.
Prices Could Jump Another Third This Winter
Analysts warn LNG prices could rise roughly one-third from current levels to about $40 per million British thermal units if winter temperatures run colder than normal, EnergyNow reported. The combination of low European storage, blocked Hormuz flows, and resilient Asian demand is pushing buyers to accept higher prices. INPEX Chief Executive Takayuki Ueda said LNG buyers are becoming less price-sensitive and increasingly view the fuel as "indispensable"—a shift from assumptions that demand would drop when prices rose.
Australian LNG Gains Market Share in Asia
Chevron's Australian liquefied natural gas operations are in a sweet spot. The company's Gorgon facility produces 15.6 million tons annually, while Wheatstone adds 8.9 million tons—together making up roughly 5% of global LNG supply. Chevron Australia President Balaji Krishnamurthy noted that Australian LNG is currently trading at a premium in Asia because of Australia's proximity to the region's demand centers. The company expects elevated prices to persist for at least several months as artificial-intelligence data centers and energy-security concerns keep global demand strong.
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