BAKU, Azerbaijan, April 8. Among Asia’s energy import-dependent markets, Bangladesh, India and Pakistan appear more vulnerable to sharp spikes in spot LNG rates, Trend reports with reference to the analysis released by Fitch Solutions.
The company believes that this is due to significant dependence on spot LNG imports next to elevated trade and current account deficits and rising inflation.
“In percentage terms, of Asia’s LNG importing markets, Bangladesh and India highest exposure to spot purchases at 59% and 51% of total annual imports, respectively, closely followed by South Korea, Pakistan and China. Of the five, the three South Asian economies appear more vulnerable to sharp spikes in global spot LNG price spikes, due to already elevated trade and current account deficits and rising inflation,” reads the latest report by Fitch Solutions.
Bangladesh and Pakistan are also among ones with the highest exposure to spot supplies from Qatar, potentially putting them in direct competition with European buyers, should the latter group pivot towards Qatari cargoes to substitute Russian volumes, the company analysts say.
“Outside of South Asia, Singapore boast the highest dependence on imports from Qatar, although its overall import mix is far more diversified. Looking at Asia’s LNG imports more broadly, all of the markets named above remain highly dependent on LNG imports. South Korea remains the outlier with implied LNG import dependence sitting at 100 percent due to negligible domestic production, next to slower growths and regulatory obstacles in nuclear and renewables. Singapore does not produce gas either but can rely on pipeline gas imports from neighbours Malaysia and Indonesia,” the report reads.
---
Follow the author on Twitter: @Lyaman_Zeyn