Gas carriers turned to Europe: The Middle East scared prices in the EU more than in Asia

Iran's missile attack on Israel and the expectation of retaliation scared the market, and gas prices in Europe exceeded Asian ones. Part of the tankers with American LNG, heading to Asia, turned into the ports of the European Union.

At least three tankers going to Asia with LNG from the USA have recently changed their route and are now heading to EU countries. So, LNG Endeavour was going to China, but already, according to AIS ships, it passes by African Senegal to the north in the Atlantic Ocean. Also, Marvel Dove is now heading to French Dunkirk instead of South Korea. At the same time, Vivit Arabia LNG is no longer going to Bangladesh, but is heading to the UK.

Together, gas carriers transport about 300 million cubic meters of gas in the form of LNG.

The change of course of the tankers occurred immediately after Iran launched a missile attack on Israel and Tel Aviv promised to take revenge, not excluding strikes on Iran's oil and gas facilities.

In response, gas prices in Europe have reached a new high in Europe this year. On October 7, they rose to $ 472 per thousand cubic meters, and on October 9 they are trading at $ 447. This price is also attractive for LNG suppliers, as the quotations of LNG supplies to Northeast Asia (JKM) for the next month are $ 461. At the same time, the cost of LNG delivery to Europe is much lower.

Traders told Bloomberg that the change in the cargo route was a reaction to prices, and not to any fundamental shifts in demand.

"However, with a slight increase in the total LNG supply in winter, Europe will need to continue to compete with the growing Asian market for limited available supply volumes," Timera Energy analyst Joshua Belo-Osagi told the agency.

Obviously, European suppliers themselves, who are also profit-oriented, play a big role in changing sales regions. For example, LNG Endeavour is under a long-term charter from the French energy giant TotalEnergies, which, depending on market conditions and contracts, sells both LNG cargoes from the USA and Russia. The company continues to be the largest recipient of cargo from Yamal LNG.

Perhaps the outflow of some LNG from Asia will increase the chances of selling the first cargo from Arctic LNG —2, which is under direct US sanctions. The eighth batch of LNG has already been shipped from the second Arctic project, but until recently liquefied gas was loaded into floating storage facilities near Murmansk and on Kamchatka. The Asya Energy tanker delivered one cargo from Arctic LNG—2 along the Northern Sea Route to the shores of Asia, but has been maneuvering in the Sea of Japan between Japan and South Korea for several days, obviously awaiting further commands.

As reported by EADaily, LNG supplies from the United States to Europe have declined significantly this year. On the one hand, there are high reserves in the region, demand continues to decline, and Gazprom has slightly increased exports. On the other hand, there were more attractive prices in Asia this year, which are the main factor for traders. Including those responsible for the safe gas supply of Europe.