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.
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.
South Korea’s equity benchmark yesterday crossed a new milestone just a month after surpassing the once-unthinkable 5,000 mark as surging global memory demand powers the country’s biggest chipmakers. The KOSPI advanced as much as 2.6 percent to a record 6,123, with Samsung Electronics Co and SK Hynix Inc each gaining more than 2 percent. With the benchmark now up 45 percent this year, South Korea’s stock market capitalization has also moved past France’s, following last month’s overtaking of Germany’s. Long overlooked by foreign funds, despite being undervalued, South Korean stocks have now emerged as clear winners in the global market. The so-called “artificial intelligence
NEW IDENTITY: Known for its software, India has expanded into hardware, with its semiconductor industry growing from US$38bn in 2023 to US$45bn to US$50bn India on Saturday inaugurated its first semiconductor assembly and test facility, a milestone in the government’s push to reduce dependence on foreign chipmakers and stake a claim in a sector dominated by China. Indian Prime Minister Narendra Modi opened US firm Micron Technology Inc’s semiconductor assembly, test and packaging unit in his home state of Gujarat, hailing the “dawn of a new era” for India’s technology ambitions. “When young Indians look back in the future, they will see this decade as the turning point in our tech future,” Modi told the event, which was broadcast on his YouTube channel. The plant would convert
‘SEISMIC SHIFT’: The researcher forecast there would be about 1.1 billion mobile shipments this year, down from 1.26 billion the prior year and erasing years of gains The global smartphone market is expected to contract 12.9 percent this year due to the unprecedented memorychip shortage, marking “a crisis like no other,” researcher International Data Corp (IDC) said. The new forecast, a dramatic revision down from earlier estimates, gives the latest accounting of the ongoing memory crunch that is affecting every corner of the electronics industry. The demand for advanced memory to power artificial intelligence (AI) tasks has drained global supply until well into next year and jeopardizes the business model of many smartphone makers. IDC forecast about 1.1 billion mobile shipments this year, down from 1.26 billion the prior
People stand in a Pokemon store in Tokyo on Thursday. One of the world highest-grossing franchises is celebrated its 30th anniversary yesterday.
RSS