Tankers carrying liquefied natural gas from the United States and other suppliers are increasingly diverting from Europe toward Asia as spot prices surge amid escalating tensions in the Middle East. The redirection of shipments reflects growing fears that the conflict could disrupt energy flows through the strategically vital Strait of Hormuz, a key corridor through which much of the region’s LNG exports travel.
One of the clearest signs of the shift came when the LNG carrier Elisa Ardea, which had departed from a facility in the U.S. state of Texas and was originally heading toward the Netherlands, abruptly changed course in the Atlantic Ocean and redirected toward a port in Chiba Prefecture. Ship-tracking data from European research firm Kpler indicates that the vessel began heading south before charting a new route toward Asia.
The diversion of LNG shipments began in early March as instability in the Middle East intensified. Ship-tracking information shows that several Europe-bound LNG carriers altered their routes mid-Atlantic, many now expected to travel toward Asian markets via the Cape of Good Hope. Analysts say such diversions occur when price differences between regions widen enough to make rerouting financially attractive.
According to Kpler principal analyst Go Katayama, at least seven or eight ships changed course shortly after tensions escalated in the region. While LNG cargoes occasionally shift destinations depending on market conditions, he noted that such a large number of vessels altering routes within a short period is highly unusual.
The main driver behind the trend is the widening price gap between Asia and Europe. The Japan Korea Marker published by S&P Global showed April LNG deliveries trading at $24.80 per million British thermal units earlier this week. That price is more than double the level recorded before U.S. strikes against Iran in late February. By comparison, spot natural gas prices in Europe have hovered around $20 to $21 per million Btu.
The surge in Asian prices was triggered in part by a force majeure declaration on March 4 by QatarEnergy, which temporarily freed the state-owned supplier from certain contractual delivery obligations. The move, combined with concerns that maritime traffic through the Strait of Hormuz could be disrupted, has intensified fears of a supply squeeze in Asia.
Energy analysts warn that most Middle Eastern LNG originates from Qatar, which exports roughly 86 million metric tons annually through the Strait of Hormuz. Around 90 percent of those shipments are destined for Asian markets. The largest buyer is China, importing about 20 million tons each year, though it has additional supply options through domestic production and pipeline imports.
Other Asian economies face greater vulnerability. Taiwan imports roughly 8.2 million tons of Middle Eastern LNG annually, accounting for about one-third of its total imports, while South Korea relies on the region for approximately 7.4 million tons, representing about 15 percent of its LNG supply. Neither economy has the option to supplement supply through domestic gas production or pipeline imports.
Japan is less dependent on Middle Eastern LNG, which accounts for about 6 percent of its imports, or roughly 4.1 million tons per year. However, scheduled maintenance at several nuclear power plants this year is expected to increase reliance on LNG-fired power generation, potentially raising demand for spot cargoes if long-term supplies are disrupted.
Meanwhile, Europe is facing tightening supplies as LNG shipments that were originally destined for the region are redirected toward higher-paying Asian buyers. Countries such as Italy depend heavily on Qatari gas and have limited reserve capacity. According to data from Gas Infrastructure Europe, storage levels across the European Union have fallen below 30 percent of capacity, the lowest level since 2022.
Energy economists warn that Europe may eventually be forced into direct competition with Asian buyers for LNG cargoes. Such competition could push prices even higher across global markets, increasing energy costs for both regions.
The ripple effects are already being felt in emerging Asian economies. Major importer Petronet LNG declared force majeure earlier this month, citing the effective closure of the Strait of Hormuz. Countries such as Pakistan and Bangladesh, which rely heavily on Qatari LNG and have fewer financial resources to compete in spot markets, could face severe supply shortages if prices remain elevated.
Energy analysts warn that if the conflict continues and LNG prices remain high, some developing economies may struggle to secure fuel for power generation, raising the risk of electricity shortages and blackouts similar to those experienced in parts of South Asia following the global energy shock triggered by the 2022 war in Ukraine.
