Asian LNG Prices Set to Hit 3.5-Year High: Morgan Stanley
Morgan Stanley analysts have projected a significant surge in Asian liquefied natural gas (LNG) prices, predicting they will reach their highest point in three and a half years during the latter half of 2026. This forecast comes amidst rising demand driven by increased electricity consumption during the summer months and the European Union’s effort to replenish its gas storage reserves.
According to Morgan Stanley’s recent note, the benchmark Asian LNG price is expected to climb to $25 per million British thermal units (MMBtu) in the third and fourth quarters of 2026. This represents a more than 30% increase compared to current forward contracts and would mark the benchmark’s highest level since January 2023, when the European energy crisis fueled a scramble for LNG supplies as alternatives to Russian pipeline gas.
The analysts attribute this anticipated price increase to a recovering LNG consumption pattern across Asian markets following subdued demand in March and April of this year. The resurgence is largely driven by preparations for peak summer heat, leading to increased demand for cooling and power generation.
China plays a pivotal role in this demand upswing as it boosts LNG imports to unprecedented levels since the outbreak of the conflict in Iran. State-owned energy companies and private firms alike have been actively procuring LNG to ensure sufficient supply during the anticipated heatwaves of summer. Bloomberg data estimates that Chinese LNG deliveries have reached a 30-day moving average of 178,000 tons per day—the highest since early February.
Despite the recent reopening of the Strait of Hormuz easing some supply concerns, Morgan Stanley emphasizes that the LNG market is likely to remain tight. The supply crunch from the Middle East coupled with surging demand in North Asia is expected to sustain upward pressure on prices.
The projections from Morgan Stanley underscore the evolving dynamics in the global energy markets, particularly the vulnerability of LNG supply chains to geopolitical developments and seasonal demand fluctuations. Market participants and policymakers in Asia and beyond are closely monitoring these trends as they have significant implications for energy security and pricing.
With the increasing reliance on natural gas for electricity and cooling, the anticipated rise in LNG prices could influence energy strategies, including the exploration of alternative fuels and efficiency measures.
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