Prolonged Iran war could keep spot LNG prices high

TOKYO — The Iran war has significantly tightened supplies on the spot liquefied natural gas (LNG) market and the ​upward pressure on prices could persist if the war ‌drags on, an executive at Tokyo Gas said on Thursday.

Tokyo Gas Co., Japan’s biggest city gas provider, said it will look to “optimise supply and demand through our global LNG trading capabilities” as it pushes to turn trading into a core growth driver.

Speaking to reporters, Go Soga, an executive officer for Tokyo Gas, said the utility aims to reach an annual trading volume of 5 million metric tons by 2030. The company, one of Japan’s largest buyers of LNG, already operates an LNG trading business out of Singapore with support from offices in London and Tokyo. Trading volume in the fiscal year ended March 2025 reached the high-4 million-ton range, Soga noted.

The push comes as first-quarter earnings weakened. Tokyo Gas reported a 65% decline in net profit for April to June, mainly due to the absence of one-off gains booked a year earlier.

Revenue was supported by stronger prices in its U.S. shale gas business. Atsushi Torii, general manager of the accounting department, said results for the January to March period for the U.S. business were reflected in the first-quarter earnings. The average Henry Hub gas price rose to about $5 per million British thermal units in that period, up from $3.6 a year earlier. Torii added that Tokyo Gas hedges about 75% of its gas price exposure, and the remaining unhedged portion contributed to higher profit.