Balaji Krishnamurthy, who leads Chevron’s Australian operations, said at the Gastech conference in Bangkok on Monday that higher prices were likely to persist while the market adjusts to reduced Qatari exports and constrained shipping through the Strait of Hormuz. He said Australian LNG was commanding a premium because of its proximity to major Asian buyers.
The assessment comes as LNG markets remain under severe pressure after months of disruption linked to the US-Iran war, which began on February 28. Shipping through Hormuz, the route used by a substantial share of global crude and LNG exports, has fallen sharply from pre-war levels, leaving buyers in Asia and Europe competing for fewer available cargoes.
Qatar, one of the world’s largest LNG suppliers, has extended force majeure on some deliveries as restrictions and security risks in and around the strait continue to interfere with normal export flows. Cargo cancellations have stretched into the autumn, while some shipments from Qatar and the United Arab Emirates have been transferred between vessels outside Hormuz to complete deliveries to customers including those in Asia.
Asian spot LNG prices have more than doubled from pre-war levels at points during the conflict, and market assessments in September have remained around the mid-$20s per million British thermal units. Prices are still below the extreme levels seen during the European energy crisis of 2022, but they are high enough to strain industrial users and utilities across price-sensitive markets.
Krishnamurthy said the persistence of tight conditions highlighted Australia’s role as a dependable supplier to Asia. Chevron operates the Gorgon and Wheatstone LNG projects in Western Australia, which together form a major part of the country’s export capacity. Their location allows cargoes to reach key customers without passing through Middle Eastern chokepoints.
The company’s view is broadly consistent with market expectations that supply risks will remain elevated into the northern hemisphere winter. European gas storage levels are below their five-year average, while Asia has continued to draw Atlantic cargoes as buyers seek additional volumes ahead of colder weather. That competition has reduced the scope for a rapid decline in spot LNG prices even if some Middle East exports resume.
The pressure is also being amplified by uncertainty over how quickly normal traffic can return through Hormuz. Maritime movements remain far below pre-war activity, and security incidents involving commercial vessels have continued to discourage operators from using the route. Energy traders are therefore pricing not only lost supply but also the cost of longer voyages, insurance and operational delays.
Rystad Energy said ahead of Gastech that renewed US-Iran hostilities had restored a geopolitical risk premium to gas prices and that LNG traffic through Hormuz remained well below normal levels. It also noted that European storage was about 67 per cent full, compared with a five-year average of roughly 84 per cent, increasing the importance of imported LNG during the winter refill cycle.
Higher gas prices are affecting buyers unevenly. Wealthier utilities in Japan, South Korea and Europe have greater ability to secure replacement cargoes, while more price-sensitive importers in South and Southeast Asia face pressure to cut purchases, switch fuels or renegotiate supply. Buyers from India and Bangladesh have nevertheless returned to the spot market as supply concerns deepen.
Chevron’s outlook also comes as its chief executive, Mike Wirth, has warned that buffers which helped contain oil prices earlier in the conflict have been depleted. Commercial inventories and strategic reserves had absorbed some of the initial shock, but renewed attacks on energy infrastructure and shipping have pushed crude prices back above $100 a barrel.
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