The Japan Gas Association expects an increase in the price of liquefied gas due to rising oil prices – Business

Members of the Japan Gas Association expect a limited impact on their liquefied natural gas (LNG) supplies in the event of a blockade of the Strait of Hormuz, but expect the gas to become more expensive due to higher oil prices, its chairman Takashi Uchida said on Wednesday, Reuters reports.

Iran has threatened to close the Strait of Hormuz if it deems it necessary to defend itself against Israel. The threat came in the face of days of escalating confrontation between the two countries after Tehran fired hundreds of rockets and drones at Israel on April 13 in retaliation for Tel Aviv’s alleged deadly strike on the Iranian embassy in Damascus on April 1, but almost all were shot down. . Israel said it would retaliate, appearing days ago to attack, but with only a few drones, a military site in Iran.

“Even if the Strait of Hormuz is closed, there will not be a large quantitative impact on Japan, or particularly on domestic gas suppliers, as we only buy a few percent of our entire LNG imports from Qatar,” Takashi Uchida told a news conference.

He pointed out that Japan, which is the world’s second largest importer of supercooled fuel, imports only 4-5% of the nearly 70 million metric tons of LNG from Qatar.

The Strait of Hormuz runs between the Persian Gulf and the Gulf of Oman and provides a key shipping route. About one-fifth of the volume of total world oil consumption passes through the strait on a daily basis. An average of 20.5 million barrels per day of crude oil, condensate and petroleum products passed through Hormuz in the January-September 2023 period, according to data from analyst company Vortexa.

But Takashi Uchida, who is also chairman of Tokyo Gas, warned that LNG prices could be significantly affected by rising crude oil prices, as many of their long-term contracts are linked to the oil index.

“In terms of prices, Saudi Arabia’s crude oil passes through the Strait of Hormuz, which means that the blockade could lead to a significant increase in crude oil prices,” he warned.

“Since LNG prices are linked to crude oil in a large number of long-term contracts, LNG prices can rise along with crude oil prices,” he added.

Working on the publication: Yavor Rimski

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