Since the start of the Israel-Hamas war on October 7, when Hamas attacked festival goers, spot prices for liquefied natural gas (LNG) have risen by more than 40 percent.
Spot Liquefied Natural Gas (LNG) prices jumped to $18.345/MMBtu on October 16, according to S&P Global Commodity Insights.
This spike of more than 40 percent since October 6 is attributed to the Israel-Hamas conflict, which started on October 7, causing geopolitical concerns and thousands of deaths.
The standoff remains urgent, with the US urging caution to avoid further escalation. Natural gas prices in Europe are fluctuating due to concerns about sufficient supply for the upcoming winter.
The conflict between Israel and Hamas, as well as Chevron’s issues operating in Australia, have heightened market worry. Chevron Corp, a major US oil company, has shut down the Tamar natural gas field off Israel’s northern shore.
The Tamar field has a significant gas reserve and supplies the majority of Israel’s power production energy.
A prolonged Tamar shutdown might stymie Israeli gas supplies to neighboring countries, particularly Egypt, a major gas exporter to Europe.
While substantial supply shortages are not predicted in the European Union (EU) this winter, the continued worldwide gas disruption is expected to keep prices high, offering an opportunity for African LNG exporters such as Nigeria.
Recently, Philip Mshelbila, Managing Director of Nigeria Liquefied Natural Gas (NLNG) Limited, told Nigeria’s Minister of Gas, Ekperikpe Ekpo, that the company’s most pressing problem at the time is feed gas supply, a major issue affecting both current operations and future development plans.
Trains 1-6 are presently operating at roughly half of their potential capacity, according to Mshelbila, and this has been a persistent issue. The primary source of this issue is crude oil theft, which affects the supply of associated gas.