Japan and South Korea LNG Spot Benchmark Price Rises from $9.6 to $26.7
The Northeast Asia liquefied natural gas (LNG) spot benchmark for Japan and South Korea is currently around $26.7 to $26.75 per million British thermal units (MMBtu), an increase of about 1.8 times from early January's price of approximately $9.5 to $9.6. This is near the high since December 2022, but still far below the historical peak of about $69.96 in August 2022.
The low point for the year occurred in the 52-week range of about $9.45 to $9.59. After the conflict escalated at the end of February, QatarEnergy announced force majeure due to attacks on the Ras Laffan facility, resulting in a temporary loss of about 17% of export capacity. Asian spot prices rose from about $10.4 in late February to around $26 in mid-September, an increase of about 1.5 times, while Brent crude rose about 50% during the same period. Near-month futures fell about 1.7% on the 17th, having reached approximately $27.23 the previous day.
Demand is contracting at high prices. Asian LNG demand is expected to decline for the second consecutive year; China's September arrivals are estimated at about 4.32 million tons, down from about 5.2 million tons in August and about 5.32 million tons in the same month last year, potentially ceding the position of the world's largest buyer to Japan. India's September imports are estimated at about 1.86 million tons, the lowest since March. Total Asian imports in September are estimated at about 20.09 million tons, the weakest September in eight years. Northeast Asia's spot prices are about $0.9 higher than the Dutch TTF, with the Atlantic cargo diversion window nearly at parity.
The U.S. Henry Hub remains around $2.85 to $2.9, about $24 lower than the Japan-Korea benchmark price. Kpler forecasts the average Asian spot price to be about $19.3 in 2026 and about $14.9 in 2027; Rystad expects the 2026 average to remain above $19. Japan's meteorological agency has warned that unusually high temperatures are pushing up gas-fired power generation, but overall power generation in Japan and South Korea remains weak year-on-year. Long-term oil price-linked contracts are still in effect, and the spot profit margin has roughly halved at current prices.
In market mechanics, this is a shift from a buyer's market to a bidding market due to Gulf supply reductions: buyers are stocking up on Northeast Asia inventories and European fill-ups before winter, while sellers are focused on Chinese industrial gas and South Asian spot purchases. Beneficiaries are Japan and South Korea's power sectors that can still receive deliveries under long-term contracts, along with sellers who have secured U.S. export windows; those under pressure are importers and gas-consuming factories that must supplement with spot purchases. The increase in prices alongside a decrease in import tonnage indicates that demand elasticity has kicked in, rather than pure panic buying.
Additionally, at the beginning of January, institutions still predicted the Japan-Korea benchmark for 2026 to be around $8.5, but this path has been rewritten by the Strait and Qatar's force majeure. The spot price is now about three times the increase relative to crude oil before the conflict.
Source: Public Information
ABAB AI Insight
The Japan-Korea benchmark has risen from about $9.6 to about $26.7, not due to a sudden increase in gas usage in Northeast Asia, but because a portion of Qatari supply has disappeared from the market. With Ras Laffan offline, spot prices immediately took over pricing, and the long-term oil price formula could not keep up with the war premium. China has cut back on spot purchases, while Japan and South Korea rely on long-term contracts to stabilize prices, and Europe retains high-priced cargoes in the Atlantic, keeping Asian spot prices at a four-year high. The Henry Hub price has barely moved, indicating that North American wellheads are not the bottleneck; rather, liquefaction capacity and the Strait are.
Capital is moving within the price differentials. The $24 price difference between Asia and the U.S. is sufficient to cover shipping costs and still leave a profit, as long as the canal and shipping schedules are operational. Once TTF prices are nearly equal to Japan and Korea, cargoes will no longer flow unidirectionally east. Importers will complete winter with fewer tons at higher unit prices, while power plants will pass costs into electricity prices, leading factories to choose between shutting down or switching fuels. Investment banks that were still lowering annual average price models in January have had their forecasts invalidated by force majeure after late February.
In contrast to the European gas crisis of 2022, which pushed the Japan-Korea benchmark to nearly $70, followed by three years of oversupply that brought prices back to double digits, this round has a lower peak and faster pace because the demand side is already self-limiting. The industry phase is characterized by "supply shocks combined with demand destruction": tonnage decreases, unit prices rise, and revenue is redistributed between importers and the power generation side. As long as Qatar's share does not return, spot prices will continue to reflect political premiums.
The structure reflects a transfer of pricing power under supply shocks. Long-term contracts still follow oil prices, while spot prices follow remaining available capacity; when the largest exporting country withdraws a portion of its capacity, spot prices gain more weight than long-term contracts. The mechanism is that Asian gas buyers do not have the buffer of shale gas and can only choose between spot, long-term contracts, and production cuts; once spot prices exceed the industrial tolerance level, demand self-exits, and prices stabilize at a level where electricity is still affordable, but increased production is not.
ABAB News · Cognitive Laws
Long-term contracts follow oil prices, while spot prices follow gaps.
When an exporting country halts production, importing countries first halt factories.
When price differentials exceed shipping costs, ships will change course on their own.