Several liquefied natural gas tankers appear to be nearing the Strait of Hormuz, raising hopes that flows of the super-chilled fuel through the waterway may resume after Iran said the strait was open.

Two empty tankers, the Al Hamra and Mraweh, paused around the Fujairah anchorage area east of the strait, according to ship-tracking data compiled by Bloomberg. If the vessels - both owned by Abu Dhabi National Oil Co. proceed into the Persian Gulf, it would mark the first transit for an LNG ship through the eastern side of Hormuz since the war began.

At least three other tankers loaded with Qatari LNG within the Persian Gulf have moved toward Hormuz in the last several hours, the ship data show. No loaded LNG shipment has exited the Gulf since the US and Israel began strikes on Iran in late February.

The effective closure of the waterway has choked off about a fifth of global LNG supplies, sending prices higher and causing shortages across emerging Asian markets. Iranian Foreign Minister Abbas Araghchi said Friday that Hormuz is "completely open" to commercial shipping for the duration of a 10-day ceasefire between Israel and Hezbollah in Lebanon.

LNG tankers often change course, and it isn't clear if the vessels that appear to be heading to the strait will actually continue their journeys through the waterway. LNG ships have aborted attempts to pass through Hormuz over the last month.

Ships can move on the "coordinated route as already announced" by Iranian authorities, according to Tehran, while US President Donald Trump said America's naval blockade of Hormuz will remain in full force. However, Iranian media later reported that ships and cargoes linked to "hostile" countries would not be allowed through, that any transits must be arranged with its authorities and that it would close the strait if the US blockade of its own shipping continues.

There are 15 laden LNG vessels in the Gulf that could attempt to cross Hormuz in the coming days, according to ship tracker Kpler, but much will depend on how insurance companies respond to the recent headlines.

First, cargoes "will likely be delivered to Asian buyers, particularly in parts of South Asia, where we have seen spot buying activity in recent weeks," said Ronald Pinto, principal gas and LNG analyst at Kpler.

There's also a big question over when Qatar will restart production at its LNG plant, the biggest in the world, which was shut down last month with about 17% of capacity damaged by Iranian attacks.

"If and when Qatar Energy indicate they are restarting even just a few of their LNG trains at Ras Laffan then we might see an even greater downward movement" in gas prices, said Tom Marzec-Manser, Europe gas and LNG director at consultants Wood Mackenzie Ltd.

Source: The Economic Times

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