Strait of Hormuz disruption sends Platts JKM to over 1-year high as Asia gauges physical impact

The disruption to transit through the Strait of Hormuz following missile attacks in the region sent Platts JKM soaring March 2 to its highest level since February 2025, as Asian LNG importers and traders assessed the physical impact, market sources told Platts.

Platts, part of S&P Global Energy, assessed JKM -- the benchmark price reflecting LNG delivered to Northeast Asia -- for April at $15.068/MMBtu on March 2, up 40.86% from Feb. 27. The JKM benchmark was last higher on Feb. 13, 2025, at $15.543/MMBtu.

QatarEnergy has suspended LNG production due to military attacks on its operating facilities at Ras Laffan Industrial City and Mesaieed Industrial City, according to a statement from the company later March 2.

This came as no LNG tankers were transiting the main shipping lanes in the Strait of Hormuz at 0700 GMT on March 2, according to S&P Global Commodities at Sea data.

Oil shipping traffic through the Strait of Hormuz declined on Feb. 28 after Iran claimed to have shut the waterway in response to US and Israeli missile strikes.

Japan's NYK Line and Mitsui O.S.K. Lines, among the world's largest ship operators, have halted all their ships from transiting the Strait of Hormuz amid heightened safety concerns following missile attacks, NYK and MOL spokespeople told Platts on March 1.

"Insurance premiums for routes in the Persian Gulf have risen to 15%-25% of cargo values," a chartering executive at an LNG trading company said. This figure varies from charterer to charterer, a source with an LNG carrier owner said.

Depending on how long the conflict in the Middle East lasts, Asian charterers may have to seek alternative loading ports for their cargoes, which could lead to increased volumes from North America to Asia, another chartering executive said.

The Strait of Hormuz is a vital chokepoint through which about 20% of the world's oil and LNG supply transits daily.

"The impact of the latest conflict in the Middle East will depend on how long it lasts and whether it continues to escalate," said Paul Everingham, CEO of the Asia Natural Gas & Energy Association.

"LNG deliveries into Asia will be affected if tankers cannot transit the Strait of Hormuz for any significant length of time," Everingham added.

Halted transit

LNG importers from China, India, South Korea and Japan were not immediately seeking additional cargoes due to the suspended transit at the Strait of Hormuz but were monitoring terminal operations and shipments, Asian importers and traders said.

"The impact on China could be big since they can't take US [shipments], and now Middle East volumes are affected," a Singapore-based trader said. "Whether they will come out to purchase in the spot market depends on how long this situation lasts and their current inventories."

A source at an Indian state-owned LNG importer said there has been no official communication from the Indian government regarding whether to continue or suspend operations in the Persian Gulf region.

"India receives nearly two-thirds of its shipments from the region. It is a massive risk at the moment," a source with a state-owned Indian gas utility said.

In South Korea, an LNG importer said, "With our FOB exposure to Middle East volumes largely rolled off, we are currently just monitoring the situation rather than having an immediate operational response on our end. I wouldn't say that there is an urgent need to procure spot cargoes now."

In Japan, a spokesperson for JERA said, "At present, no LNG vessels are affected, and for the time being, we expect to be able to maintain appropriate inventories of LNG necessary for power generation."

A spokesperson for Kansai Electric said, "If the strait blockade continues, there is a possibility that it will affect our LNG procurement."

"If energy shipments from the Middle East are disrupted for an extended period, we will consider all possible measures -- including alternative procurement -- to ensure a stable fuel supply and will make every effort to address the situation," the spokesperson added.