LNG Bunker Snapshot: Bunker prices surge in Rotterdam and Singapore as Hormuz tensions intensify

Singapore-ARA spread widens to $191/mt

Escalating US-Iran tensions push TTF up

Summer demand contributes to JKM’s upward pressure

Weekly changes in LNG bunker prices:

• Rotterdam up by $171/mt to $1,150/mt
• Singapore up by $229/mt at $1,341/mt
• Baltics up by $171/mt to $1,255/mt

Rotterdam

Rotterdam's LNG bunker price has jumped by $171/mt, mirroring gains in the front-month Dutch TTF natural gas contract. Over the past week, the benchmark has climbed by around 15%, to $19.94/MMBtu ($1,037/mt).

The latest rally in TTF prices has been fuelled by escalating US-Iran tensions and growing concerns over energy shipments through the Strait of Hormuz.

“With Hormuz again effectively closed, the market is back to the critical situation it faced ahead of the ceasefire, with limited supply, very low storages and heatwaves across Europe causing additional demand,” Mind Energy said.

“The LNG and European gas markets remain vulnerable amid the flare-up in hostilities between the US and Iran,” analysts at ING Bank said.

“European natural gas futures rose to their highest level in two months as the attacks on vessels in the strait raised concerns about security of supply,” ANZ Bank senior commodity strategist Daniel Hynes said.

Renewed tensions in the Gulf are continuing to push gas prices higher. Europe's hot summer is already increasing gas consumption in the power sector, while the EU will need to accelerate storage injections, if it wants to achieve its 80-90% storage fill target, International Energy Agency gas analyst Greg Molnár said.

Low storage levels, import disruptions, strong heatwave-driven demand, reduced French nuclear output and intense competition from Asia are the key factors keeping the market under pressure, Mind Energy said.

The European heatwave is expected to persist, with forecasts now extending warmer-than-normal temperatures by another week until the end of August, Rystad Energy said.

Singapore

Singapore's LNG bunker price has surged by $229/mt over the past week, to $1,341/mt. As the increase outpaced Rotterdam's, Singapore's LNG bunker premium over the Dutch port widened to $191/mt, from $133/mt a week earlier.

LNG bunker prices in Singapore typically track the NYMEX Japan/Korea Marker (JKM). The front-month JKM contract rose by $4.41/MMBtu over the week to $20.98/MMBtu ($1,091/mt).

"Fresh hostilities in the Strait of Hormuz have choked LNG supplies from the Persian Gulf (~20% of global supply)," Bloomberg News Energy Asia team leader Stephen Stapczynski said.

"North Asian LNG prices seem destined to push back… as the earlier recovery in LNG tankers transiting the strait falters. The attack on a Qatari LNG tanker has shaken the confidence of the biggest LNG exporter in the Middle East," ANZ Bank senior commodity strategist Daniel Hynes said.

"Recent heatwaves across parts of… Asia only add to concerns," analysts at ING Bank said.

Summer demand fundamentals have remained largely unchanged from the previous week, with weather forecasts continuing to point to warmer-than-normal conditions across key LNG demand centres.

The Japan Meteorological Agency is forecasting at least a 40% probability of above-normal temperatures until the first week of August. The likelihood could rise to 70% across most provinces between 11-17 August.

The Korean Meteorological Administration has also projected at least a 50% probability of above-normal temperatures until the end of July. That probability is expected to increase to 60% during the first two weeks of August, Rystad Energy said.

Meanwhile, Singapore's LNG bunker sales fell by 22% in June after reaching a multi-year high of 70,000 mt in May. Average daily sales also declined by around 400 mt to 1,800 mt/day.

Despite the monthly decline, LNG bunker demand remained stronger on a year-to-date basis. Total sales for the January–June period climbed to nearly 318,000 mt, up from 244,000 mt during the same period last year.

Elsewhere in the LNG bunker sector, Chinese shipbuilder New Times Shipbuilding delivered three LNG dual-fuel tankers over the course of a week.

Global bunker supplier Vitol Bunkers has expanded its physical supply network by launching conventional marine fuel deliveries at Pakistan's Gwadar Port.

Meanwhile, bunker supplier Peninsula completed a liquefied biomethane (LBM) bunkering operation for Royal Caribbean's new cruise ship at Spain's Port of Cadiz.

Separately, energy company TotalEnergies supplied 100% liquefied biomethane (LBM) to CMA CGM's 24,000-TEU dual-fuel container ship in Rotterdam.

By Tuhin Roy

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