Transporting liquefied natural gas (LNG) across the Atlantic has become significantly more expensive, with spot shipping rates hitting their highest level in nearly two years. The sharp rise comes as growing LNG exports from North America tighten the availability of vessels, pushing up charter rates in both the Atlantic and Pacific markets.
Rising Freight Rates Driven by Export Boom
The spot rate for hiring an LNG vessel from the U.S. to Europe surged 19% to $98,250 per day, the highest since January 2024, according to Spark Commodities. In the Pacific, rates also rose sharply up 15% to the highest level in more than a year.
This marks a dramatic shift from earlier in the year, when freight prices were at historic lows due to an oversupply of ships. The turnaround is largely linked to a steady increase in North American LNG output, as new projects come online and require more vessels to move cargo to Europe and Asia.
Bloomberg’s ship-tracking data shows that the 30-day moving average of LNG exports from North America has risen nearly 40% since the start of the year, tightening vessel availability and driving up freight costs across regions.
Market Impact: Price Spreads and Fleet Outlook
Higher shipping costs are expected to widen the price gap between Asian and European gas markets because it becomes more expensive to send U.S. LNG to the Pacific. Traders report that one company recently booked an Atlantic vessel for December at around $100,000 per day, highlighting how tight the market has become.
Earlier in the year, when freight rates were low, some ships were diverted to Asia further reducing the number of available vessels in the Atlantic and contributing to the current shortage.
However, analysts believe the surge in charter rates may not last much longer. According to Han Wei of BloombergNEF, the spike has likely peaked due to the strong pipeline of new LNG tanker deliveries, which should help balance supply and moderate future spot rates.
The surge in Atlantic LNG shipping rates underscores the rapid expansion of North American exports and the pressures this growth places on global vessel availability. While the current tightness has pushed freight costs to multi-year highs, analysts expect rising new-build tanker deliveries to ease the situation. For now, however, higher transportation costs may influence global gas price dynamics, particularly between Europe and Asia.
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Source: gCaptain
