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Australia · Cyclone · Energy Markets · LNG
Tropical Cyclone Narelle forced the shutdown of Chevron's Gorgon and Wheatstone, and Woodside's Karratha LNG plants in Western Australia on Friday, impacting over five percent of global liquefied natural gas supply and exacerbating existing market tightness.
These outages occurred as global fuel supplies were already stretched thin by the US-Israel war on Iran in the Middle East, which caused Iran's Strait of Hormuz blockade and a plunge in Qatar's gas exports. Australia, a major LNG exporter, has become "more vital than ever" for Asian nations, with 40 percent of Japan's LNG coming from Australia, according to the International Energy Agency chief Fatih Birol and the Asia Natural Gas and Energy Association.
LNG prices in some parts of Asia have more than doubled since February 28. Josh Runciman from the Institute for Energy Economics and Financial Analysis stated this disruption does not reassure LNG importers about supply reliability.
Chevron Australia is working to restore production safely at its facilities. Despite oil prices easing after US President Donald Trump postponed a deadline for Iran to open the shipping channel to April 6, most equities dropped.
Australia is reportedly considering a new windfall tax on fuel exporters as LNG profits are set to soar.
