Oxford – LNG Shipping Chokepoints

The paper discusses the significant decline in LNG shipping via the Panama Canal and the Red Sea due to various disruptions, including droughts and Houthi attacks. This has resulted in re-routing of LNG cargoes via longer routes, leading to increased operational costs for exporters. Despite the disruptions, the impact on global LNG supply is relatively limited compared to fluctuations in demand, resulting in stable benchmark LNG prices in Europe and Asia. The analysis shows that while some exporters have been affected, there are strategies in place to mitigate the impact, such as diversifying supply sources and optimizing shipping routes. The easing of restrictions in Panama and potential increase in LNG shipping capacity could alleviate some of the challenges faced by exporters. Overall, the disruptions highlight both the potential improvements and limitations in efficiency in LNG shipping.