ASIA’s imports of liquefied natural gas (LNG) are poised to hit a six-month high in July while Europe’s imports plunge to their lowest in nearly two years.
While some of the strength in Asia is because of seasonal demand during the summer peak, the weakness in Europe underscores just how far the second-biggest consuming region is falling behind in building inventories for winter demand.
Asia’s imports of the super-chilled fuel are estimated at 23.05 million tonnes in July by commodity analysts Kpler, up for a fourth straight month.
That’s about 6% higher than June and than the same month a year earlier.
The recovery in arrivals is being driven by China, the world’s largest LNG buyer, which has lifted imports in recent months, with Kpler estimating 5.62 million tonnes for July, the most since January and 55% above the 3.62 million tonnes in April, which was the weakest month for eight years.
China had earlier pulled back on LNG imports after spot prices leapt 143% in the wake of the United States and Israeli attack on Iran on Feb 28.
Spot LNG for delivery to North Asia went from US$10.40 per million British thermal units (mmBtu) on February 27 to a high of US$25.30 in the week to March 20.
It subsequently dropped back to a low of US$15.30 per mmBtu by June 19, two days after the United States and Iran signed a 60-day ceasefire.
The ceasefire led to hopes that the Strait of Hormuz would fully reopen, allowing Qatar to resume LNG shipments and restoring about 20% of global supplies.
However, it has since collapsed.
The United States and Iran have resumed trading strikes, while Tehran has said the Strait is now closed to vessels, and has struck several ships, including a Qatari LNG tanker that attempted passage last week.
The resumption of hostilities has started to feed through to higher spot LNG prices, which rose to US$18 per mmBtu in the week to July 10, up from US$16.40 the previous week.
It’s likely that higher spot prices will discourage Chinese buying, but it’s unlikely to dissuade some other Asian importers, especially wealthier countries such as Japan, South Korea and Singapore.
It’s worth noting that those countries have been replacing Qatari LNG with cargoes from the United States, the world’s biggest LNG exporter ahead of Australia and Qatar.
Japan’s imports of US LNG are expected to reach 940,000 tonnes in July, the third-highest on record, according to Kpler and almost 15 times the 60,000 tonnes from February, the last month before the start of the Iran conflict.
Japan, the world’s second-biggest LNG buyer, is on track for total imports of 5.37 million tonnes in July, a five-month high and also above the 4.72 million tonnes for the same month last year.
South Korea, the third-biggest LNG importer, is expected to receive 870,000 tonnes of US LNG in July, the third-highest in Kpler records and up from just 13,000 tonnes in February.
Overall, Asia’s imports of US LNG are expected to reach a record high of 4.23 million tonnes in July, about three times the 1.34 million tonnes from February.
Asia’s demand for US LNG has meant that Europe has seen its imports from its top supplier drop, with Kpler tracking arrivals of just 3.94 million tonnes for July, down from a recent peak of 7.79 million in January and the lowest since November 2024.
The switching of US cargoes to Asia has resulted in Europe’s total LNG imports falling to an expected 6.9 million tonnes in July, the lowest since September 2024 and down from 8.72 million tonnes in July 2025.
The drop in LNG imports comes as Europe’s refilling of natural gas inventories falls well behind schedule, with data from energy analyst John Kemp showing a storage deficit of 158 terawatt hours by July 7, about 22% wider than the 10-year seasonal average.
This means that European utilities are likely going to have to bid up spot LNG prices to levels that knock Asian buyers such as China and India out of the market.
It also means the longer Qatar’s LNG remains effectively unavailable amid the Iran conflict, the more likely spot prices will climb. — Reuters
Clyde Russell is a columnist for Reuters. The views expressed here are the writer’s own.
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