(June 20) According to various news reports the Iranian parliament voted in favour to close the Strait of Hormuz, the worlds single most important chokepoint. The final approval remains with the Supreme National Security Council.
Hormuz alone accounts for just over 20% of global LNG trade – more than Norway’s annual piped gas supplies to Europe. around 85% of the total deliveries via Hormuz go to Asia (with China and India being the largest buyers), while the share of Europe is less than 15%.
The most exposed markets to Strait of Hormuz are Pakistan (nearly 98%), Bangladesh (70%) and India (67%). Altogether Asia imports almost 30% of its LNG via Hormuz, while Europe’s exposure is less (around 8%).
And while Asia’s direct exposure is greater, a potential disruption of LNG flows via Strait of Hormuz would have a global impact by naturally exacerbating the competition for spot LNG and put strong upward pressure both in Asia and Europe.
Monday (June 23) morning will be the first stress-test reaction on TTF.
Source: Greg MOLNAR
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