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Maguire: High gas prices will test the endurance of US LNG exports.

U.S. LNG manufacturers have shipped record volumes of super-chilled fuel in 2026. However, rising natural gas prices could soon reduce demand.

Data from LSEG show that the prices of key forward gas and LNG in Europe, Asia (which together account for more than 80% U.S. LNG shipments) have risen to their highest levels in'more than three years.

The ongoing war between Israel and the United States against Iran has disrupted freight traffic in?the?Gulf, and cut LNG flows from key exporter Qatar by over 60% compared to last year. The ongoing?U.S.

Exporters will soon see a softer market, as buyers delay purchases due to high freight costs and seasonal decreases in gas consumption.

PRICED OUT

According to LSEG, the estimated forward price for LNG deliveries in Asia is expected to rise to over $22 per million British Thermal Units (MMBtu) by October, November, and December.

This compares with an average of under $17 per MMBtu in 2026, so far. It would be the highest price seen in Asia since 2023 at the beginning of the year when the global gas market was reeling due to Russia's invasion and disruptions of Russian gas flow.

Gas purchases in Japan, China, and South Korea will likely be lower until utilities restock their gas supplies as winter approaches.

LSEG data indicates that gas consumers in Europe can expect to pay a benchmark price of $21.50 to 22.50 per MMBtu at the Netherlands Gas Trading Hub from October to December. This would be the highest rate since?late 2012, according to LSEG.

The European gas market is showing signs of a slowdown. The use of renewable energy is replacing gas-fired electricity, and households are electrifying their heating systems to reduce fossil fuel usage.

Similarly, European gas stocks remain below long-term norms, which means utilities will have to replenish their stockpiles in order for heating demand to pick up.

Recent import trends indicate that buyers are not in a hurry to purchase additional LNG at the current price. According to Kpler's data, Europe imported a total 6.2 million tons of LNG during July. This is the lowest total for July since 2021.

The slow pace of imports suggests that buyer concerns about fuel prices currently outweigh those regarding potential supply security.

EXPORTER PERSPECTIVE

The prospect of a near term lull in demand from importers will not cause concern for U.S. LNG suppliers, particularly with the record-breaking?tallies that have already been recorded for the first 7 months of the year.

Kpler data show that U.S. companies exported just under 73 million tonnes of LNG between January and July. This is a 23% increase from the same period in 2025.

It is possible that prolonged periods of high gasoline prices in certain key markets could?accelerate the electrification effort and the switch to alternative energy sources.

The cost-sensitive markets of Asia, which also has a rapidly growing?renewables?generation and a strong growth in battery storage systems, are likely to be the most affected.

Storage operators may be discouraged from making discretionary purchases if natural gas prices are high. They will not want to fill up tanks if prices are high, in case the demand is low through the winter. This could limit their reselling options.

The LNG exporters should also be aware of the planned increases in export volumes. Several liquefaction expansions are expected to take place in the U.S.A. and Canada before the end of the decade.

The majority of these planned expansion projects have been approved on the assumption that gas consumption in all markets will continue to grow in tandem with supply.

Gas prices may be high enough in certain regions to reduce local 'demand' and speed up energy transition. Exporters will face fierce competition to find buyers regardless of the amount they have to sell.

These are the opinions of a columnist, who is also an author. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn, X and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets 7 days a weeks. (Reporting and editing by Christopher Cushing; reporting by Gavin Maguire)

(source: Reuters)