LNG

With Qatari cargoes held out by the closure of Hormuz, Europe has leaned harder on Russia's Yamal LNG. According to our data the flow is concentrated in three states and larger by cargo count than a year ago, deepening a reliance the bloc has legislated to end by 2027.

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Global exports fell for a fifth straight month to 29.72MMt as the Hormuz closure kept Gulf volumes off the market, leaving the US with 1/3 of supply.

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Markets took relief from the US-Iran deal, with European gas prices off almost 6pct. But the strait is still mined, the text unsigned, and our tracking shows almost nothing has moved: Qatari and Emirati transit ran at 2.5pct of normal for fourteen weeks, with no regional supply to cushion a slow or stalled reopening. 

The Chinese government is preparing to take a symbolic step by launching LNG futures denominated in yuan, giving Chinese buyers a domestic pricing and hedging tool at a time when energy markets remain highly exposed to geopolitical risk.

China is the target of a charm offensive by both American and Qatari LNG exporters – yet politics, rather than China’s actual demand, is driving shipments, hence all US LNG cargoes were diverted last minute. Volumes in transit from both destinations are still dwarfed by Australian cargoes as well as sanctioned Russian ones; our Markets Editor Anja Karl investigates. 

Europe's storage refill is running behind, and running on US LNG. The methane row could pull the rug, without ever needing to bite. With the summer-winter spread inverted, no one wants the financial exposure of injecting, so the Continent is deferring in the hope that a warm winter does the work instead. EU storage was above 40 percent in early June, and Brussels has already conceded the 90 percent target.  Six US cargoes have shown over mid-April to mid-May that the inter-basin price spread can still pull cargoes east when JKM widens, writes our Markets Editor Dr Alexander Wilk.