Asian liquefied natural gas (LNG) prices have soared to their highest levels in over three years, reaching $25.908 per million British thermal units (BTUs) late Wednesday. This surge, the highest since December 2022, is a direct consequence of escalated hostilities between the US and Iran, which have raised concerns about sustained disruptions to energy flows through the critical Strait of Hormuz. These elevated costs, more than doubling from pre-conflict levels, are placing significant strain on the demand and budgets of several Asian nations.
In parallel, Asia's robust oil purchasing activity is driving up Middle Eastern crude prices. Refiners in China and India, the world's leading oil importers, are aggressively increasing their spot purchases of Persian Gulf crude. This heightened competition, also involving buyers from South Korea and Japan, has pushed benchmark Dubai crude futures to nearly $100 a barrel, a level not seen since May. Physical premiums for Oman and Murban crude have also surged due to fears of supply interruptions from Iran and its proxies, including Yemen's Houthis.
US President Donald Trump has commented on the situation, stating that renewed strikes against Iran would likely be short-lived and reiterating Washington's control over the Strait of Hormuz. These remarks came as fresh fighting reignited fears of a broader conflict and caused energy prices to spike. Meanwhile, Europe is entering its heating season with dangerously low natural gas reserves, needing over 100 terawatt-hours, or more than €7 billion ($8.1 billion), to reach even its lowest storage target of 75%. This leaves the continent vulnerable to significant price spikes, even with a mild start to winter, as cold snaps could quickly deplete inventories.
