Asia gas prices surge to highest since war began on fuel crunch

A global rush to secure shipments of liquefied natural gas for winter catapulted Asian prices to the highest level in five months.

The Asian benchmark spot LNG price jumped close to $60 per million British thermal units on Tuesday, the highest level since early March when Russia’s invasion of Ukraine upended energy markets.

Russia’s move to curb gas shipments to Europe is sending prices of the power plant and heating fuel surging around the world. Utilities in Asia and Europe are accelerating efforts to secure LNG spot cargoes for delivery in winter, when consumption peaks, which is exacerbating a shortage and fueling the rally in prices.

Several Japanese utilities are currently in the market to procure more LNG shipments for delivery from December onward, according to traders with knowledge of the matter. Korea Gas Corp., one of the world’s top buyers of the fuel, is also seeking to scoop up more winter supply, traders added.

Meanwhile, supply disruptions from Australia to the US are curbing the amount of available LNG. Several companies, including Uniper SE and Marubeni Corp., were bidding for LNG shipments to Asia during S&P Global’s market on close process on Tuesday, traders said.

The Japan-Korea Marker jumped to $57.728 per million British thermal units on Tuesday, more than triple the level this time last year, according to S&P Global. European gas prices settled just below a record high on Tuesday amid scorching summer heat.