The escalating tension has caused several liquefied natural gas tankers to change course and leave the Red Sea.
The escalating tension has led to liquefied natural gas tankers diverting from the Red Sea. Due to the threat of cargo delays caused by the Israel-Hamas war, an increasing number of tankers are choosing to bypass the Red Sea. While European countries like Qatar continue to transport liquefied natural gas through the Red Sea, companies such as BP p.l.c. and the Norwegian National Oil Company are opting to avoid the region. Additionally, the Panama Canal is also restricted due to drought, which may result in more U.S. liquefied natural gas being rerouted through southern Africa. European natural gas prices have risen, but North Asia has ample winter stockpiles.
Zhitong App has learned that the violent incidents related to the Israel-Hamas war, which have threatened the delay of long-haul flights and cargo, are causing more and more liquefied natural gas tankers to change course from the Red Sea.
According to compiled ship tracking data, at least five ships have changed their course and left the waters near the Yemeni coast since last Friday, which is an inevitable route point for ships using the Suez Canal that connects Europe and Asia. It is not yet clear whether all ships have changed course due to the tense situation.
Due to the intensified attacks by Iran-backed Houthi militants in support of Hamas, natural gas transportation companies, including BP p.l.c. and Equinor ASA (EQNR.US), have chosen to avoid the Red Sea. However, according to ship tracking data, Qatar, one of the world's largest liquefied natural gas producers and a major supplier to Europe, has chosen to continue using the Red Sea to reach the Suez Canal.
At the same time as ships are changing course, the Panama Canal, another important liquefied natural gas transoceanic route, is facing severe restrictions due to drought. This means that more US liquefied natural gas destined for Asia may need to take a longer route around southern Africa.
European natural gas prices rose sharply by 7% on Monday due to increasing concerns about energy supply disruptions. However, according to traders, as the location of the largest liquefied natural gas importing country, North Asia has sufficient winter stockpiles and buyers are not in a hurry to seek alternative supplies.