The market is bracing for the conflict in the Middle East to drag on for several months, and for the world's largest LNG plant in Qatar to be unable to quickly resume operations.
Asian liquefied natural gas importers have begun a massive buying spree of fuel for delivery through May, Bloomberg reports.
The actions of Asian buyers clearly demonstrate that the region no longer expects a quick resolution to the conflict. With no alternative routes for Qatari gas exports and limited global capacity, countries are rushing to protect themselves from shortages.
According to traders, spot LNG prices in Asia have currently stabilized at around $18 per million British thermal units. Despite a slight correction from last week's peak of $25, current prices are 80% above pre-war levels. The severe fuel shortage has already sparked a price war between Asia and Europe. Asian importers have begun offering more favorable terms to suppliers. According to ship tracking services, at least nine LNG carriers originally bound for European ports have turned around and returned to Asia since the start of hostilities.
Taiwan has already fully met its needs for March and April and is actively contracting for alternative volumes for May, according to the island's government.
India, which traditionally purchased approximately half of its LNG imports from Qatar, is in emergency search mode. Local companies such as Gail India are struggling to find cargoes for immediate delivery.
Companies from South Korea, Thailand, and Bangladesh have also entered the market with requests for additional volumes for the next three months.
Analysts emphasize that the longer the Qatari plant remains idle, the worse the global energy crisis will worsen, threatening serious economic consequences for both the Asian and European markets.