More LNG tankers divert from Strait of Hormuz amid widening Iran crisis

By Stephen Stapczynski and Ruth Liao

 

Liquefied natural gas tankers set to load shipments in Qatar or the United Arab Emirates appear to be temporarily abandoning those plans, as most shipowners and traders avoid the Strait of Hormuz.

 

At least 13 empty LNG tankers that were on the eastern side of the chokepoint have diverted away, according to ship-tracking data compiled by Bloomberg. LNG vessels and other ships stopped crossing the waterway over the weekend following the initial strikes by the US and Israel on Iran.

 

Exports from Qatar, the world’s largest LNG supplier after the US, must go through Hormuz to reach customers in Asia and Europe. A month-long halt could see spot Asian LNG rise 130 per cent to $25 per million British thermal units, according to Goldman Sachs Group Inc. 

 

“LNG shipping will continue to be disrupted, and traders should plan for a temporary halt of transit via the Strait of Hormuz for a couple of days,” said Leslie Palti-Guzman, founder of Energy Vista, an energy and shipping advisory firm. “We are in uncharted territory.”

 

There were a string of mixed messages around Hormuz over the weekend, as well as attacks on oil tankers. Some shipowners have issued orders to halt travel over safety concerns, while others are reassessing insurance costs as risk premiums surge.