Wed, Mar 04, 2026 page9

• Asia scrambles for alternatives to oil and gas

  MIDDLE EAST CONFLICT: Taiwan has enough LNG to meet its needs through the end of March after emergency coordination, Premier Cho Jung-tai said

  • Bloomberg
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  Oil and gas traders have spent days scrambling for alternative sources of supply to Asia outside of the Middle East on concerns a prolonged conflict could choke off flows from the energy-rich region.

  Some liquefied natural gas (LNG) traders spent all night on Monday speaking to contacts about available supply after Iranian attacks closed the world’s biggest export plant in Qatar, people familiar with the matter said.

  Importers in China, India and Japan have inquired about other sources of oil and LNG, they said.

  

  CPC Corp, Taiwan’s liquefied natural gas receiving terminal at the Port of Taichung is pictured in an undated photograph.

  Photo courtesy of CPC Corp, Taiwan

  The QatarEnergy facility, which accounts for about one-fifth of global supply, on Monday halted after an Iranian drone attack. Even before it stopped, the widening war in the Middle East had effectively closed the Strait of Hormuz, a key export route for Qatar, while attacks also forced Saudi Arabia’s largest oil refinery to close.

  Some buyers of LNG, including Taiwan, requested suppliers deliver cargoes next month, a month early, the people said, asking not to be identified because they are not authorized to speak to the media.

  Taiwan, along with South Korea, is seeking to secure fuel from other regions.

  At the same time, Chinese gas buyers say the country is pushing Tehran to keep Hormuz open.

  Asian nations have stockpiles of crude and LNG that would help buffer any short-term disruptions, but a sustained conflict threatens to quickly drain those supplies. Alternatives outside of the Middle East are likely to be more expensive, with bloated freight rates adding to spiraling costs for importers.

  For LNG, alternatives include a small array of product flowing from the US — the world’s biggest producer — to Europe, which can easily be rerouted toward Asia mid-journey. There is also supply from Australia, which recently sent a rare shipment all the way to Canada because of subdued Asian demand.

  For buyers of oil, there are stockpiles of Middle Eastern crude in locations such as Japan’s Kiire and Okinawa, which regional refiners can draw from. Kiire has capacity to store more than 46 million barrels, while Okinawa can hold more than 8 million barrels. Saudi Arabian Oil Co leases space at both storage sites.

  Nearby countries such as Malaysia, Vietnam and Australia also produce crude, although significantly less than producers in the Persian Gulf. That leaves buyers with options much further afield, including the US and Africa.

  The effective closure of the Strait of Hormuz — the narrow waterway separating Iran and the Arabian Peninsula — has halted crude and LNG shipments from the Persian Gulf. At least five LNG tankers, laden with cargoes from Qatar’s now-shut Ras Laffan facility, were seen inside the Persian Gulf, according to ship-tracking data compiled by Bloomberg. It remains to be seen when they would transit out.

  Trading houses with take-or-pay contracts for LNG, particularly those tied to Qatar, are looking to source cargoes elsewhere to cover their deliveries to customers, the traders said.

  Along with Taiwan, utilities and other buyers in Japan have asked for next month’s shipments to be brought forward, they added.

  Taiwan, a global chipmaking hub, has enough LNG to meet its needs through the end of this month after emergency coordination and adjustments, Premier Cho Jung-tai (卓榮泰) told lawmakers yesterday.

  The country might approach Japan and South Korea for supplies, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said.
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