Drewry AIS shows Qatar loaded only 7 LNGCs in week 10 (ending 6 March) due to heightened tensions in the Middle East following the closure of the Strait of Hormuz. On average, the country loads 18-20 LNGCs each week. The sharp drop is attributed to the force majeure affecting Qatar’s LNG production (on 4 March) and to continued transit risks in the strait. Despite the halt in Qatar’s LNG production, some loading activity was recorded, while UAE loadings were stable and Oman’s loadings recorded a surge.
What does supply loss in the Middle East mean for LNG shipping?

According to our Drewry AIS trade estimate, the following supply losses are expected over the coming weeks and months if Qatar’s and the UAE’s LNG supply remains halted.

Assuming a complete supply blockade in Qatar, weekly losses will mount to 12 billion tonne miles, translating to 45 billion tonne miles if the supply cut is prolonged for a month, and over 490 billion tonne miles if prolonged for a year. Over 840+ LNGC loadings will be disrupted, leaving many carriers idled, even though some have been repositioned due to trade readjustments.

While supply losses in Qatar and the UAE could be managed in the near-to-short term, with alternative supplies reaching Asia from other exporting countries such as the US, Russia, Australia, Canada and Africa, a complete substitution of over 70 million tonnes of supply in the remainder of the year will be impossible. Should the Middle East conflict continue, LNG shipping would be severely disrupted, with the impact worsening with each month passing.

Source: Drewry