Spot LNG prices in Asia jumped to record highs in January due to low stocks of this fuel, cold weather, global disruptions in production and delays in shipment. Asian LNG prices today are significantly higher than LNG prices in the U.S. and Europe, which creates arbitrage opportunities for sellers, writes Euractiv.

The winners in this situation are large oil and gas companies that have access to different sources of fuel as opposed to traders and non-integrated producers, experts say.

Shell and TotalEnergies (NYSE:TTE) could divert tankers with U.S., Nigerian and Qatari LNG bound for Europe to Asia.

“Some of our long-term contracts provide for a change of direction. Where possible, we divert LNG shipments to premium markets,” a top executive at a major company told the publication on condition of anonymity.

The difference in regional gas prices, excluding transportation and related costs, is quite significant, Euractiv says. For example, the cost of contracts with delivery in February at the U.S. Henry Hub is $2.6 per million British thermal units (BTU), at the Dutch TTF – about $10 per 1 million BTU, in Asia – about $30 per 1 million BTU.

Most of the LNG in the world is sold under long-term contracts, and only about 10% of all deals are on the spot market. The current price hike has mainly affected the spot segment of the market.

“LNG in the spot market in Asia right now is like rolls of toilet paper in a pandemic – you look at the empty shelves and grab the last one at any price,” says another industry senior executive.

Rising LNG prices could give an impetus to Qatar to rapidly expand its projects in this area, and it also supports many of the U.S. fuel production facilities, experts say.

At the same time, the current situation poses a threat to the formation of a flexible spot LNG market, as it is likely to push many sellers to enter into long-term contracts, Euractiv writes.

Earlier we reported that the dollar index returned to growth.