LNG buyers seek lower prices from Qatar UAE

Asian and European LNG buyers plan to ask Qatar and the UAE for lower prices and additional supply guarantees due to the U.S.-Iran war, which has raised insurance costs and disrupted flows through the Strait of Hormuz. The war has halted most oil and gas flows through the strait, stripping Gulf producers of their reputation as reliable suppliers. QatarEnergy has shut liquefaction trains, declared force majeure, and suspended exports. Iranian attacks on tankers have clouded prospects for a return to pre-war flows. Buyers seek to leverage higher risk and insurance costs to negotiate discounts and more flexible terms. Long-term LNG contracts from Qatar and the UAE were typically priced at 12.6%-12.7% of Brent Crude, but recent deals have been closer to 12.3%. Edison has had deliveries cancelled from April to early September. Growing production from the US, Canada, and Mozambique adds competition. Buyers also want guarantees of replacement cargoes if Hormuz is disrupted, such as from Qatar's Golden Pass LNG in the US.