The world is underestimating how long the impact of the Iran war will last on global supply of liquefied natural gas (LNG), according to Australia’s top exporter of the fuel.
“I don’t think markets and consumers and society are yet fully appreciating it, and there’s a belief that things will return to normal at some soon point,” Liz Westcott, chief executive officer at Woodside Energy Group Ltd, said on the sidelines of the Australian Energy Producers Conference in Adelaide.
The near-closure of the Strait of Hormuz since the US and Israel began strikes on Iran in late February has choked a fifth of global LNG supply. While spot gas prices in Asia and Europe are up more than 60% over pre-war levels, they’ve moderated from the highs of March and are far lower than in 2022, after Russia invaded Ukraine.
“The immediate activity for customers is securing short-term supply as a result of having so much supply held back from the Middle East,” Westcott said in a Bloomberg Television interview. “Customers are looking for us to honour our contracts, and if there is any additional volumes, to keep them in mind.”
Meanwhile, Woodside has seen growing interest from buyers in its Louisiana LNG export plant in the US, which is currently under construction, as customers seek to diversify supply away from the Middle East, Westcott said.