Skip to content
You can now search across every topic, entity and event.What's new
Iran Conflict 2026
12JUN

Asia clears the LNG queue first

3 min read
09:18UTC

Goldman Sachs pushed Hormuz LNG normalisation to end-July from end-June on 17 June, citing roughly 500 vessels still anchored outside the strait; the first post-conflict carrier routed to India, not Europe.

ConflictDeveloping
Key takeaway

Goldman pushed Hormuz LNG normalisation to end-July as 500 vessels queued and the first carrier cleared India.

Goldman Sachs revised its Hormuz LNG normalisation timeline to end-July from end-June on 17 June, citing roughly 500 commercial vessels still anchored outside the strait despite the US-Iran memorandum 1. The bank held its 2H 2026 TTF forecast at EUR 41/MWh but flagged an upside tail above EUR 100/MWh if the blockade persists. A two-to-three-month mine-clearing and security-assessment tail means the physical cargo benefit arrives after the heart of the July injection window 2, with Qatar's partial restart clock (covered in event 5) layered behind that.

The arbitrage tells the same story. The JKM-TTF spread, the gap between the Japan-Korea Marker for Asian spot LNG and the European benchmark, compressed to roughly USD 4.35/MMBtu by 18 June from USD 5.26 on 12 June as TTF fell faster than JKM on the Hormuz deal 3. The compression is real but partial: the arb still sits above the USD 2.50 to 3.00 freight-adjusted diversion threshold, so uncommitted Atlantic cargoes still route east rather than into European terminals.

The physical flow confirms the routing. The Disha, the first LNG carrier to cross Hormuz after the conflict, transited on 15 June bound for Dahej in India, not a European berth 4. The first post-conflict cargo cleared an Asian terminal while Europe's regas berths stayed the losing bid. The narrowing margin is the early signal of European storage re-entering the cargo auction, not yet its return: front-month TTF has fallen on a diplomatic deal that the physical cargo flow has not yet routed to a European regas berth.

Deep Analysis

In plain English

Liquefied natural gas tankers can choose where to deliver, to Europe or to Asia, depending on which destination pays more. The price difference between Asia (measured by the Japan-Korea Marker, or JKM) and Europe (TTF) determines the routing choice. When Asia pays USD 4.35 more per unit than Europe, after accounting for the cost of the longer journey, tanker owners route east. The first LNG ship to sail through the Strait of Hormuz after the conflict ended was the Disha. Despite months of European concern about gas shortages, the Disha went to India, the commercial signals pointed there, not to a European terminal. Until TTF rises enough to narrow the gap with Asian prices, the same pattern will repeat: available LNG flows to the highest bidder, which is currently Asia.

Deep Analysis
Root Causes

The JKM-TTF arb persists above the diversion breakeven because two independent conditions hold simultaneously: first, Asian spot LNG demand has not yet been destroyed sufficiently by high prices, as Japanese utilities and South Korean importers face winter 2026-27 procurement obligations and are rebuilding storage; second, Atlantic LNG cargo owners face a choice between a EUR 41 TTF equivalent (approximately USD 14.2/MMBtu) and a JKM above USD 18/MMBtu, with freight costs of approximately USD 2.50/MMBtu for a Europe-versus-Asia diversion, leaving USD 1.35 of net advantage for routing east.

The Disha routing to Dahej confirms that even the first post-conflict Hormuz transit, which might have been expected to prioritise European storage security as the diplomatically significant choice, followed commercial routing logic: India offered a closer destination and a JKM-linked offtake price that beat any European terminal bid at current TTF levels.

What could happen next?
  • Risk

    Every week the JKM-TTF arb stays above USD 4/MMBtu, European storage injection misses approximately 700 GWh of LNG supply that would otherwise arrive at Northwest European terminals under a routing-neutral arb environment.

  • Consequence

    India and other South Asian LNG importers receiving the first post-conflict Hormuz cargoes establish an emerging commercial pattern that could persist into the winter procurement window, structurally competing with European buyers for Qatari restarter volumes.

First Reported In

Update #19 · German spark spread flips +EUR 15 in 48hrs

InvestingLive· 18 Jun 2026
Read original
Different Perspectives
Hormuz shipping and insurance market
Kpler, Lloyd's List and S&P Global each independently put Strait of Hormuz transits at a seventh to a sixth of pre-war levels, against CENTCOM's own position that the strait remains open for transit. War-risk premiums rose from 0.25% to 3-10% of hull value in mid-July and have held steady since.
Pakistan (with China)
Pakistan (with China)
Iran's interior minister met Pakistan's army chief in Islamabad on 25 July, his second visit in ten days, with China separately pushing the same track; Islamabad's stated precondition, a halt to Gulf attacks, broke within hours when the Houthis struck Yanbu and Jazan. The channel inherits Baghdad's opening without yet fixing what broke it.
Saudi Arabia
Saudi Arabia
Saudi Arabia absorbed Houthi strikes on Aramco-linked sites at Jazan and Yanbu on 25 July without confirming them, while holding a 30-year civil nuclear agreement Trump made conditional on joining the Abraham Accords two days after signing it. Riyadh is fighting on one front while being asked to concede on another.
Iran (state security leadership)
Iran (state security leadership)
Iran's security chief said strikes continue until the enemy's "total surrender", and no IRNA, Tasnim or Fars report carries any stand-down language to match Washington's pause. Tehran reads the halt as "strategic decision-making fatigue", not a restraint it needs to reciprocate.
Washington (Pentagon and White House)
Washington (Pentagon and White House)
A Defense Department source called the bombing halt "on a hold", Pentagon spokesman Sean Parnell insisted the US "retains a deep arsenal of capabilities", and the White House credited "successful sanctions" and thirteen days of strikes for the same pause. Three explanations from one government suggest none of them is the whole one.
Oil traders
Oil traders
Sent Brent down 2.29 per cent to $98.38 a barrel on reports that mediation was reviving, moving the price on CENTCOM's quiet night rather than on Trump's same-day promise of a bigger operation with no deadline attached.