LPG shipments through the Strait of Hormuz are projected to drop 59% in October due to ongoing security concerns and market dynamics.
The security crisis in the Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman, continues to affect liquefied petroleum gas (LPG) transportation. According to maritime data and analytics company Kpler, the daily average of LPG shipments through the strait is expected to decline from 432,000 barrels in September to 177,000 barrels in October.
These figures indicate that LPG shipments in October could decrease by approximately 59% compared to the previous month. However, since October has not yet concluded, this decline is not a confirmed monthly result but rather a forecast based on current data.
Daily LPG shipments may drop to 177,000 barrels.
According to Kpler's data, the daily average of LPG shipments through the Strait of Hormuz was at the level of 432,000 barrels in September.
The expectation for October has been calculated at 177,000 barrels per day. The difference between the two periods reaches 255,000 barrels, corresponding to a decline of 59%.
This contraction in LPG transportation is significant for the producer countries in the Persian Gulf regarding their access to international markets.
The security crisis is affecting vessel movements.
The Strait of Hormuz serves as a critical transit point for energy exports from Gulf countries, primarily Saudi Arabia, Qatar, the United Arab Emirates, and Kuwait.
Due to attacks on commercial vessels, transit restrictions, and military tensions in the region, shipping operators are forced to reassess their voyage plans.
In particular, the transit of gas carriers through the strait is influenced by developments related to vessel safety, insurance conditions, and port operations.
However, it is not possible to attribute the entire decrease in shipment volume solely to security incidents. Production, export programs, vessel loading schedules, and alternative logistics arrangements can also affect monthly transportation data.
Ship-to-ship transfers have decreased.
According to Kpler's analysis, at the center of the decline is the transportation model based on loading LPG from Gulf ports and transferring it to other vessels outside the Strait of Hormuz.
These operations, which had been increasing since June, involved vessels connected to producers in the Gulf delivering LPG cargoes to ship-to-ship transfer points outside the strait.
However, the resurgence of attacks on commercial vessels in October significantly reduced the volume of these transfers.
Important detail: The figures of 432,000 and 177,000 barrels per day refer not to all LPG shipments passing through Hormuz but specifically to shuttle transportation exports related to ship-to-ship transfers.
LPG prices are under pressure in the Far East.
Kpler analyst Nils Jenson pointed out that the decrease in shipments has tightened LPG supply in the Asian market.
The reduction in shipments from the Gulf during a period of seasonal demand increase is particularly exerting upward pressure on LPG prices in the Far East.
On the other hand, there has been a limited decline in freight rates for very large LPG carriers (VLGCs). According to Baltic Exchange data, the spot market daily earnings indicator for voyages from the region to Japan fell from $258,000 on October 8 to $256,000. Nevertheless, earnings remain historically high.
October data may be revised upward.
Kpler indicates that the figures for October could be revised upward due to the subsequent detection of some transits conducted with the automatic identification system (AIS) turned off.
There is also a possibility of a recovery in shipments during the second half of the month. However, due to security risks in the region, October is expected to be weak in terms of LPG transfers.
Source: SeaNews Türkiye
