Qatar LNG flows rise as Europe seeks long-term gas

LNG tanker at sea illustrating rising Qatar gas flows and Europe long-term natural gas demand

Key Points

01Qatar has stepped up LNG tanker movements through the Strait of Hormuz
02Confirmed oil transits via Hormuz are still far below prewar levels
03European gas prices have more than doubled so far this year
04Europe is being urged to secure more long-term LNG supply contracts

Qatar steps up LNG shipments through Hormuz

Qatar has increased liquefied natural gas tanker traffic through the Strait of Hormuz in recent days, sending multiple laden carriers through the narrow waterway. Ship‑tracking data show at least two loaded LNG carriers moving outbound through the strait in the last week, while at least two others have headed in the opposite direction into the Persian Gulf.

One of the latest Qatari LNG shipments is en route to India’s west coast, underscoring ongoing demand from major Asian buyers despite regional tensions. The rise in Qatari traffic suggests exporters are continuing to use the chokepoint to reach key markets, even as overall flows through the strait remain depressed compared with prewar levels.

Hormuz remains a constrained energy chokepoint

While Qatar’s LNG shipments are increasing, aggregate energy flows through the Strait of Hormuz are still well below earlier norms. Confirmed transits averaged 6.98 million barrels per day in the seven days to September 20, based on ship‑tracking data. That compares with a prewar baseline of 18.3 million barrels per day, leaving current flows at about 38% of that level.

Before the conflict, the strait carried about a fifth of global oil and gas shipments, highlighting its role as a critical maritime corridor. The sharp drop from the baseline underscores the extent of ongoing disruption and the potential vulnerability of global energy trade to any further constraints in the passage.

Tight global LNG market and surging European prices

The war in the Middle East has effectively removed about a fifth of the world’s liquefied natural gas flows from the market, tightening global supply. At the same time, Asian buyers have been increasingly active in purchasing flexible spot LNG cargoes, intensifying competition for any uncontracted volumes.

This constrained backdrop has fed into higher prices, particularly in Europe. European gas prices have more than doubled this year, reflecting both reduced LNG availability and heightened uncertainty over future supply. Price volatility and competition with Asia have made securing reliable shipments more challenging for European utilities and industrial users.

Europe weighs long-term LNG contracts for security

In response to these pressures, the head of Swiss energy company MET Group has argued that Europe needs more long‑term contracts for seaborne gas supply. Longer‑dated agreements are viewed as a way to hedge against soaring and unpredictable spot prices, while helping to secure physical cargoes in a crowded market.

The call for more long‑term deals comes as European buyers balance the need for security of supply with flexibility in meeting climate and demand goals. With a significant portion of global LNG flows disrupted and key routes like Hormuz still constrained, contract structure and route diversification have become central questions for policy makers and market participants alike.

Key Takeaways

01Qatar’s willingness to move more LNG through Hormuz stands in contrast to the still‑depressed overall traffic, underlining its role as a pivotal supplier in a disrupted region.
02Europe’s sharp gas price increases are closely linked to reduced LNG availability and competition from Asia, rather than solely to pipeline dynamics or domestic factors.
03The push for more long‑term LNG contracts reflects a strategic shift by European buyers toward supply security, even at the cost of reduced flexibility.
04Persistent constraints at major chokepoints and the loss of part of global LNG supply suggest that contract terms and shipping routes are now as important as price for buyers.

References