Liquefied natural gas cargoes are diverting away from Asia to Europe after fears of a wider war in the Middle East sent benchmark Dutch prices rallying.
Three LNG tankers carrying the super-chilled fuel from the U.S. changed course last week after initially heading to Asian destinations including China and South Korea, according to ship-tracking data on Bloomberg and data from Kpler.
The diversions come as European futures jumped — settling on October 4 at the highest this year — on concerns about increased risk to supplies in the Middle East, just as the heating season gets under way. They also illustrate the flexibility of where U.S. flows can go, and the strong competition for shipments from Europe and Asia, the two biggest consuming regions.
Traders said the re-routing of the cargoes was a reaction to prices rather than any fundamental shifts in demand. Dutch gas futures have spiked as much as 29% since mid-September.
“However, with little total LNG supply growth winter on winter, Europe will need to continue to compete with a growing Asian market for limited available flex volumes,” Joshua Belo-Osagie, an analyst at Timera Energy, said in a note.
The vessel LNG Endeavour on October 4 switched direction in the southern Atlantic to head north, ship-tracking data show. It was diverted from China to Europe, though the exact destination isn’t yet known, according to data from intelligence firm Kpler.
Vivit Arabia LNG was en route to Chattogram, Bangladesh until October 2, when it then signaled the U.K.’s Milford Haven as a destination, data on Bloomberg show. A few days later, Marvel Dove diverted away from South Korea to Belgium.
In September, at least two cargoes changed course from Europe to Asia in response to stronger demand there.
