Oil markets are on edge as delayed U.S.-Iran talks and Trump’s warning on the ceasefire raise the risk of renewed conflict, with Brent crude potentially spiking back toward $100 per barrel.
Crude oil prices have spent most of March-April seesawing up and down, reacting to Iran’s closure of the Strait of Hormuz and Donald Trump’s Truth Social posts. Global LNG prices have been declining for the past four weeks, defying upward swings in other commodities.
Northeast Asia’s benchmark for liquefied natural gas, the JKM marker, dipped to $15 per MMBtu Tuesday, the lowest level since the US-Iran conflict broke out in late February-early March.
Plunging demand is the main reason underlying the pricing weakness in LNG, with total Asian imports expected to fall to 19.2 million tonnes this month, the lowest monthly reading since April 2020 and down 11% from a year ago.
The loss of 13 mtpa of Qatari liquefaction capacity for the next 1-2 years is also weighing on term buyers, with Qatar-dependent countries like Pakistan stopping LNG imports completely after Iran’s drone attacks on Ras Laffan.
LNG buyers’ hopes were further dampened after this weekend’s ‘free passage’ proclamations turned out to be false and all the five LNG carriers that sought to transit the Hormuz were ordered by the IRGC to turn back.