LNG shipping endured one of its weakest full-year performances in 2025, with average rates falling to historic lows despite a sharp and unexpected rally late in the year. For most months, oversupply, muted Asian demand, and geopolitical uncertainty dominated the narrative. However, winter demand in Europe briefly flipped market sentiment.
Rates slump for most of the year
Across 2025, LNG carrier earnings remained under pressure. Rates for TFDE carriers dropped 48% year on year, while XDF/MEGI rates declined 35%. Early optimism faded quickly as ample vessel availability, softer Asian imports, and mild weather weighed on utilisation.
At the same time, global LNG supply expanded by 6% year on year, while Asian demand slipped 5%. Although European imports surged by 25%, this growth failed to offset weaker tonne-mile demand, as much of Europe’s supply came from the United States via shorter Atlantic routes.
Trade tensions and fleet growth shape fundamentals
US–China trade frictions and tariff uncertainty added another layer of caution. As a result, ordering activity slowed sharply. Only 20 LNG carriers were ordered in 2025, compared with 76 a year earlier.
Meanwhile, fleet growth continued. More than 68 LNG carriers were delivered by the end of November, with over 20 more scheduled before year-end. Consequently, oversupply intensified, pushing more vessels into idling and lay-up. By late 2025, idle LNG carriers had doubled to 59 units.
Asian demand remains the weak link
China’s LNG imports fell 9% year on year as piped gas deliveries from Russia increased. In addition, scrutiny of Russian LNG by Western countries led to the expansion of a so-called “dark fleet,” particularly in the Far East.
Although discussions around Power of Siberia 2 resurfaced, the long-term impact on LNG shipping remains uncertain and unlikely to materialise before 2030. For now, Asia’s subdued demand continues to limit long-haul trade.
Winter sparks a late surge
Market conditions shifted dramatically in late October and November. LNG shipping rates surged past $100,000 per day as Europe ramped up imports ahead of winter. Storage levels, at around 75% by end-November, prompted higher withdrawals and sustained inflows.
As a result, Atlantic Basin activity tightened vessel availability, especially for modern two-stroke carriers. In contrast, the Pacific market lagged, as Asian demand failed to mirror Europe’s winter buying spree. This divergence reinforced a premium for Atlantic trades over Pacific routes.
Short-term spike, long-term caution
Despite the winter rally, the spike is widely viewed as seasonal rather than structural. Rates are expected to soften into early 2026 as winter cargo requirements stabilise and new vessels continue to enter the fleet.
That said, long-term fundamentals remain more constructive. Most LNG carrier orders are tied to long-term charters, and a strong wave of final investment decisions in the second half of 2025 supports future demand. Over 60 mtpa secured FID in late 2025, with hundreds of mtpa planned or under construction.
Outlook: volatility within a growing market
Overall, 2025 underscored the growing divide between short-term volatility and long-term confidence in LNG shipping. While oversupply and geopolitics capped earnings for much of the year, winter demand highlighted how quickly sentiment can shift.
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Source: Drewry Maritime Research
