Suez Canal Authority to reduce discount for LNG carriers by 10%
LNG carriers crossing the Suez Canal will only be getting a 15% cut to transit fees starting 1 November, down from 25% previously, according to a circular the Suez Canal Authority released yesterday. The decision to effectively hike fees for LNG carriers comes amid the global shortage of natural gas, which has sent prices to a 13-year high last month, the authority said. The canal earlier this year was reported to be the preferred shipping route for US LNG carriers heading to East Asia and looking to avoid a highly congested Panama Canal.
Why is the SCA doing this? In a word, the market opportunity to start restoring prices after cutting them to keep market share as the price of oil fell in the early days of the pandemic. The rise in oil to record highs to cross USD 85 a barrel for the first time since 2014 amid a global energy shortage is driving higher demand for natural gas and other fuels.