US arbitrage to Asia through the Panama Canal opens amid stronger Asian demand following the Middle East conflict, although a recent rise in LNG transits through the canal is driven by unladen carriers returning east rather than westbound laden shipments

Platts assessed the US-North Asia via Panama Canal versus US-Atlantic arbitrage at plus 53.3 cents/MMBtu on April 28, while the route via the Cape of Good Hope was assessed at minus 67.7 cents/MMBtu, indicating that US cargoes via the Panama Canal remained economically favored into Northeast Asia, while the Cape route is less economic.

“The arbitrage seems to be opening up, there are some cargoes going to Southeast and South Asia, and it looks like China is attracting a few,” an LNG trader previously said.

In light of this, LNG transits through the Panama Canal have totaled 12 so far in April, based on data from S&P Global CERA and S&P Global Commodities at Sea as of April 28. Of these, eight were unladen LNG carriers returning to the US after deliveries to destinations in the Pacific. This marks the highest number of unladen transits recorded by both CERA and CAS since at least June 2024.

The number of laden LNG carriers traveling west to deliver US cargoes has totaled four so far in April, unchanged from March. Laden transits were last higher in August last year, at five.

For comparison, of the 34 LNG cargoes exported from US facilities to Asia-Pacific destinations, 31 opted to transit around the Cape of Good Hope.

Sources previously told Platts that auctioned Panama Canal slots had made the route impractical for spot LNG cargoes, with most traffic to date tied instead to long term contracts between US LNG facilities and Asian buyers.

Renewed buying interest in some parts of South Asia and China appeared to be a factor behind the recent pull of volumes through the canal, sources previously said.

Other sources, however, said global LNG demand remained largely Asia-led as European LNG demand has remained weak.

Unfavorable European LNG/gas spreads and a flat‑to‑backwardated forward curve have dampened storage injection incentives, clouding the start of Europe’s injection season compared with this time last year.

JKM assessment

Pakistan is one of those countries, set to receive its first US-sourced LNG cargo since December 2023, after TotalEnergies Gas Power won a 140,000 cubic meter spot cargo in an April 23 tender at $18.40/MMBtu, for delivery on April 27-30, Platts reported earlier.

Pakistan has historically sourced the majority of its LNG under long-term contracts from the Middle East—primarily QatarEnergy —but recent supply disruptions have prompted the region to seek spot cargoes.

Platts assessed JKM — the benchmark price reflecting LNG delivered to Northeast Asia — for June at $17.082/MMBtu on April 28, down 8.5 cents/MMBtu, or 0.5%, day over day.

Total US LNG exports stood at 10.23 million metric tons, with 1.48 million mt going to Asia (14%) and 4.25 million mt to Europe (42%), according to CERA data as of April 28.

This compares with US cargo shares of 19% to Asia and nearly 62% to Europe in March, and 21% to Asia and about 65% to Europe in April 2025.

Platts assessed the DES Northwest Europe marker for June at $14.564/million British thermal unit on April 28, at a discount of 31.5 cents/MMBtu to the June TTF hub futures price, down 37.5 cents/MMBtu day on day.

Platts is part of S&P Global Energy.

Source: Platts