Asia LNG hits $30.4 amid supply disruptions and shooting incident
Key Facts
Spot liquefied natural gas in Asia reached $30.4 per million British thermal units on Monday, according to traders cited by Bloomberg in a report published by Malaysia's The Edge newspaper. The price reached its highest since December 2022 as LNG supply disruptions linked to the Middle East conflict continued. The International Energy Agency had estimated in its second-quarter report that the effective closure of the Strait of Hormuz had removed nearly 20% of global supply. The price high followed a shooting incident reported by an LNG tanker captain off Yemen. The United Kingdom Maritime Trade Operations agency located the incident in the Gulf of Aden, southwest of Mukalla.
The price surge follows an earlier increase in the second quarter of 2026, when Asian spot LNG averaged $17.5 per million British thermal units. The International Energy Agency said in its third-quarter report that the average rose 45% from the same period a year earlier. That leaves second-quarter prices, already elevated from a year earlier, below the price reported by traders on Monday. In describing the supply disruption, the agency linked the loss of global supplies to the effective closure of the maritime passage through Hormuz. Its second-quarter report estimated the loss at "nearly 20% of global LNG supply".
The incident reported by the United Kingdom Maritime Trade Operations agency occurred on 17 October 2026, according to the date recorded in its maritime warning. The report placed it 140 nautical miles southwest of the Yemeni city of Mukalla, in the Gulf of Aden. The agency cited the LNG tanker captain as saying a small boat carrying 7 people approached the tanker. The report said the boat fired 2 shots towards it, attributing the details of the incident to the captain's account. The armed security team aboard the tanker responded by firing 2 warning shots towards the small boat, prompting it to change course, according to the agency's description of the sequence of events.
The United Kingdom Maritime Trade Operations agency said authorities were investigating the tanker incident as it issued a warning to vessels transiting the area. It urged those vessels to "transit with caution and report any suspicious activity" in the warning concerning the incident off Mukalla. The maritime report from the Gulf of Aden comes as conflict-related losses in Qatari LNG production extend into 2026 and 2027, according to Rystad Energy estimates. The company estimated those losses at 64.8 million tonnes per year in 2026 as part of its assessment of the conflict's impact on energy markets. Its estimate of Qatari production losses in 2027 stood at about 22.9 million tonnes per year, extending the disruption's impact into next year.
In Europe, the European Network of Transmission System Operators for Gas said underground gas storage facilities in the European Union were 72% full on 1 October 2026. The reading followed what the network described as a difficult storage injection season ahead of winter. The network warned that continued limited LNG availability could lead to a sharp decline in storage levels during the season. It said inventories could fall to "well below 30%" by the end of winter if supply constraints persisted. The network linked this scenario to LNG availability in its assessment of the risks of withdrawals from European storage during the coming winter months.
The European network's warning extends to the latter part of winter, when low storage levels could increase the risks associated with late cold spells. It also warned that declining inventories amid limited LNG availability would make summer refilling more difficult. Its assessment thus covers needs at the end of winter and the following injection season, with supply availability remaining a determining factor in the trajectory of inventories. On production, Rystad Energy's estimates include continued Qatari LNG losses during 2027, following the losses estimated for the current year. Those estimates remain linked to the fallout from the conflict, while the scenario of declining European inventories remains conditional on continued limited LNG availability.