Geopolitical tensions: LNG supply

Geopolitical tensions, flex in EU storage directives and accelerating LNG supply growth

Key Takeaway

LNG Market

As market enters the shoulder season, the outlook for summer 2025 has weakened on the back of three key drivers:

Deteriorating Chinese LNG demand, driven by US-China trade war slowing industrial output
Increased flexibility in EU storage targets looks set to ease summer refill requirements, restoring a winter-summer premium for 2025-26
Improving supply outlook driven by Plaquemines’ rapid ramp-up in US and record Qatar exports, where output hit >110% of capacity

LNG Shipping

A wave of newbuilds and reduced voyage distances continue to weigh on spot rates. Record low utilisation is forcing layups and scrapping in the elderly steam-propelled fleet.

Chinese-built LNG vessels escape extra fees in US under the proposed USTR directive. But lack of clarity still clouds longer-term aspiration to create a US-built and operated LNG fleet.

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Geopolitical tensions, flex in EU storage directives and accelerating LNG supply growth

Key Takeaway

LNG Market

As market enters the shoulder season, the outlook for summer 2025 has weakened on the back of three key drivers:

Deteriorating Chinese LNG demand, driven by US-China trade war slowing industrial output
Increased flexibility in EU storage targets looks set to ease summer refill requirements, restoring a winter-summer premium for 2025-26
Improving supply outlook driven by Plaquemines’ rapid ramp-up in US and record Qatar exports, where output hit >110% of capacity

LNG Shipping

A wave of newbuilds and reduced voyage distances continue to weigh on spot rates. Record low utilisation is forcing layups and scrapping in the elderly steam-propelled fleet.

Chinese-built LNG vessels escape extra fees in US under the proposed USTR directive. But lack of clarity still clouds longer-term aspiration to create a US-built and operated LNG fleet.