Liquefied natural gas (LNG) shipping costs have surged to their highest levels in eight months as vessel availability tightens due to heightened Middle East tensions and a sharp increase in ships heading to Asia.
Atlantic freight rates for standard LNG carriers climbed to $51,750 per day on Monday—the highest since October 3—while Pacific rates rose to $36,750, a level not seen since late October, according to Spark Commodities.
The spike follows a market shift that has made deliveries to Asia as profitable as to Europe, leading more US cargoes to head east via the longer Cape of Good Hope route. This has extended voyage times and reduced the number of available ships.
Geopolitical risk is further inflating prices. Escalating hostilities between Israel and Iran, and fears over a potential closure of the Strait of Hormuz—a key global energy chokepoint—have led shipowners to delay charters, pushing rates higher. Insurance costs for transiting the Strait have also soared, with war risk premiums rising up to fivefold since the conflict escalated.
A recent Egyptian tender for 160 LNG cargoes through 2026 has added to vessel demand, compounding the squeeze on global availability.
Attribution: Reuters
Subediting: M. S. Salama