Thursday, July 18, 2024
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Disruptions in the Red Sea are splitting the global LNG trade into regions

It has been four months since a liquefied natural gas tanker passed through the narrow strait between the Arabian Peninsula and Africa, evidence of how violent attacks there have disrupted global energy trade.

While before the escalation of the war between Israel and Gaza, dozens of such ships transited the Bab al-Mandab Strait every month, attacks by Yemen’s Houthi rebels have reduced that number to zero since mid-January.

Ships have been forced to circumnavigate Africa to transport fuel between the Atlantic and Pacific Oceans, leaving buyers with a limited pool of suppliers unless they are willing to pay for higher shipping costs. As a result, the global LNG market is becoming increasingly fragmented.

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