Qatar and the United Arab Emirates have started transferring liquefied natural gas cargoes between tankers outside the Strait of Hormuz. This unusual workaround is being used because ongoing conflict has severely disrupted regular LNG shipping through the strait. Moving LNG through a contested waterway is especially difficult and risky due to the specialized vessels and handling it requires.
Shipping-tracking data shows that at least three such offshore transfers occurred in August. In one documented case, the carrier GasLog Shanghai transferred its cargo to the GasLog Savannah off the coast of Oman in late August, while Qatar’s Al Rekayyat performed a similar transfer earlier in the month. Qatar has also reportedly invoked extended force majeure on some LNG delivery contracts.
The disruptions have pushed Asian spot LNG prices to their highest level in about five months and European natural gas prices to their highest in around three and a half years. Analysts note that the workaround could become a semi-permanent feature of Gulf LNG trade if the strait stays contested, and the added handling and transfer time increase costs and risks for importing countries.