LNG Shipments Through Hormuz Extend Rebound Despite Tanker Attacks as Winter Nears

Liquefied natural gas shipments through the Strait of Hormuz are still recovering despite fresh attacks on vessels, offering a small sign of relief for gas buyers in Europe and Asia as winter approaches.

At least three LNG shipments have exited the waterway since late last week, according to ship-tracking data compiled by Bloomberg and Kpler, Bloomberg reported on Monday. The news agency said that flows remain more than 75% below pre-war levels, even though outbound traffic in September climbed to its highest level since the Iran conflict began in late February.

September marked a war-time high

Analytics firms told Reuters last week that September was the busiest month for LNG traffic through Hormuz since the US-Israeli war on Iran began on February 28. S&P Global Energy counted 19 cargoes, 13 from Qatar and six from the United Arab Emirates, compared with 15 in June. Kpler counted 21.

"LNG transits through the Strait of Hormuz accelerated in the second half of September and if this is maintained into October, we could see full-month transits recover to 25 percent of pre-war levels," Eric Yep, a senior principal analyst at S&P, told Reuters.

Yep added: "The key concern is whether LNG transits through Hormuz can be sustained through winter."

According to Reuters, that depends on whether Iran escalates militarily if it sees higher exports as a loss of leverage over the strait, and whether convoys under US naval escorts can continue despite the high cost.

Prices and shipping risks

Bloomberg said the market is watching Hormuz shipments closely after a supply crunch last month pushed gas prices in Europe and Asia to their highest since late 2022. A sustained recovery could help ease prices just before the Northern Hemisphere winter, when heating demand usually surges.

The risks remain high. UK Maritime Trade Operations (UKMTO) said it received a report of a tanker being hit by an unknown projectile inside Hormuz on October 4.

Tehran holds firm on the strait

The rebound comes as talks to reopen the waterway remain stuck. Iran's parliament speaker and top negotiator Mohammad Baqer Qalibaf said on Sunday, according to state media cited by Reuters: "The position of the Islamic Republic of Iran is completely clear and firm, and the Strait of Hormuz will not be opened until our seven conditions, based on the Islamabad Memorandum of Understanding, are met."

Qatar has been carrying messages between Washington and Tehran. Before the war, the strait carried roughly a fifth of the world's oil and LNG supplies.