LNG prices in Asia witnessed a state of rise, especially at the beginning of January, in light of concern that Israel would respond to the attack committed by Iran earlier this week, and it is expected that it will turn into a widespread conflict.

The price during spot trading in North Asia exceeded $11 per million British thermal units on Tuesday, April 16, 2024, and rose about 40% from the end of February, and this came after similar gains in Europe, which competes with Asia for purchases of liquefied natural gas, and traders close. Currently short positions in gas; They are assessing the possibility of a broader escalation in the Middle East, which would push prices further.

The rise in gas prices came due to the decrease in gas flows to liquefied natural gas export facilities in the United States by a quarter during the past week due to maintenance work, which limits the flow of supplies to Asia, and importers in Japan are looking to buy more gas.

Gas prices in Asia and Europe witnessed a decline to the lowest level since 2021 in February due to high inventory in addition to mild winter weather, and the high cost of liquefied natural gas is expected to curb demand from emerging countries in Asia that are affected by prices.

The most difficult scenario for escalation of hostilities in the Middle East is Iran's closure of the Strait of Hormuz – a major sea passage through which 20% of total liquefied natural gas trade passes – and despite all of this, any stoppage in the Strait would raise prices to more than $100 per million thermal units. British, and is considered the highest level ever. Analyst Rystad stated during a research note that the market has not yet taken into account the risk of a widespread conflict in the Middle East while evaluating any potential impact on shipping gas to demand centers in Europe and Asia.