LNG traffic through Hormuz returns, but remains 80% below pre-war levels

LNG shipments through the Strait of Hormuz are showing tentative signs of recovery, with around 17 confirmed LNG vessel exits recorded in September, the highest monthly count since the war began. However, traffic remains about 80% below the pre-war level, underscoring the continuing vulnerability of global gas supplies.

Kpler data cited by Bloomberg News showed that LNG traffic through the strategic waterway picked up in September after months of severe disruption. Before the war, around 86 LNG vessels crossed Hormuz each month. There were no confirmed exits in March, followed by single-digit crossings in April and May, around 15 in June and fewer shipments in July and August.

The September recovery suggests that some LNG cargoes are moving again, but the pace remains far below normal. The development is particularly significant for Qatar, one of the world's largest LNG exporters, because virtually all of its LNG exports have to pass through Hormuz.

According to data from ICIS cited by agencies, Qatar exported only 18 LNG cargoes during the first six months of the war, compared with 509 in the corresponding period a year earlier.

Qatari cargoes reach India, Pakistan and China

Several Qatar-linked tankers were tracked crossing the strait in September. These included vessels carrying Qatari LNG to India, Pakistan and China, according to ship-tracking data from Kpler and LSEG cited by agencies.

GasLog Skagen, carrying LNG from Qatar's Ras Laffan terminal, was tracked off Sri Lanka after last being recorded inside the Gulf on September 20. Al Ghashamiya delivered a Qatari cargo to India, while Shandong Redwood carried LNG to Pakistan. Another vessel, Al Daayen, emerged from Hormuz carrying a shipment bound for China.

The precise number of crossings remains uncertain because some vessels switch off their tracking systems while transiting the strait, making them difficult to track.

European buyers continue to miss contracted cargoes

The disruption has left some European and Asian buyers without contracted Qatari supplies. Edison said QatarEnergy had extended force majeure on deliveries until early December, with another six LNG cargoes due at Italy's Adriatic LNG terminal not expected to arrive.

That takes Edison's missed Qatari cargoes since April to 35, of which 23 have been replaced, mainly with US LNG, according to agencies.

Edison's 25-year agreement with QatarEnergy covers 6.4 billion cubic metres of gas annually, equivalent to around 10% of Italy's total gas consumption. Some customers in Pakistan and Bangladesh have also been informed that delivery suspensions will continue through November.

LNG flows through Hormuz: At a glance

Sources: Kpler, ICIS, LSEG, QatarEnergy and agency reports

Qatar faces both shipping and production constraints

The supply disruption is not solely a shipping problem. Strikes damaged two LNG production units at Qatar's Ras Laffan facility, reducing the country's production capacity by around 17%.

Qatar's Energy Minister Saad Sherida Al-Kaabi has said repairs to the damaged units could take about three years. However, the country's other 12 units could return to normal operations within weeks if vessels are able to transit Hormuz safely and consistently.

Qatar has also ruled out building a pipeline to bypass the strait, with Al-Kaabi saying such infrastructure would not make economic sense because gas would still need to be converted back into LNG outside Qatar before being loaded onto tankers.

Oil exports recover faster than LNG

The contrast with crude oil is notable. Preliminary Kpler data cited by agencies showed Middle East crude exports rising to 16.3 million barrels a day in September, the highest monthly level since the war began, although still below the 19.5 million barrels a day recorded in February.

Saudi Arabia accounted for much of the increase, with exports rising to around 5.4 million barrels a day in September from 2.45 million barrels a day in August.

Crude shipments have greater flexibility because Saudi Arabia and the UAE have pipeline routes that can bypass Hormuz. LNG has no comparable alternative route, leaving Qatar's exports directly exposed to the security of the strait.

Winter demand puts focus on LNG flows

The September increase therefore marks an improvement, but not a return to normal. LNG traffic remains only around one-fifth of its pre-war level, while QatarEnergy continues to suspend some contracted deliveries.

For European and Asian gas buyers, the key question is whether LNG traffic through the Strait of Hormuz can continue to recover before winter demand rises, or whether alternative suppliers, particularly the United States, will have to fill the gap for longer.