JKM Reprices From Hormuz Peak as US LNG Supply Lines Hold
Asian spot LNG has retreated sharply from war-premium highs, with US Corpus Christi volumes and a potential Russian pipeline deal to China reshaping the supply calculus.
Asian spot LNG, priced against the JKM benchmark, trades at $15.38 per million British thermal units — a sharp retreat from the above-$25 levels that followed the February 28 (2026-02-28) closure of the Strait of Hormuz, when conflict around Iran briefly severed Qatar's export arteries and sent spot markets into a brief panic.5
The fall from those highs reflects how quickly supply-side buffers reasserted themselves. The NYMEX Henry Hub front-month natural gas contract held at $3.34 per million Btu on Friday (2026-06-26), a level that keeps US-to-Asia LNG arbitrage firmly in the money and sustains the commercial rationale for American export terminals.3
Cheniere Energy's Corpus Christi facility sits at the centre of that arbitrage. As one of the most recently expanded US liquefaction terminals, it feeds the Atlantic Basin but has been diverting cargoes toward Asia when the spread justifies the longer voyage — a price-sensitive routing mechanism that becomes more active as JKM premiums over Henry Hub widen.6
The supply backstory runs deeper than spot rerouting. EIA data show that marketed natural gas production across the Lower 48 averaged 117.2 billion cubic feet per day in the first quarter of 2026 (1Q26), a 4% increase versus the same period in 2025.1 The agency forecasts a further 3% increase for the full year, driven largely by Permian Basin volumes expected to reach 29.2 billion cubic feet per day — 6% above last year's pace.1 More feedgas means more molecules available for liquefaction, reinforcing the structural capacity of US LNG to absorb demand shocks from wherever they originate.
The China angle complicates the supply outlook in a different direction. The Power of Siberia 2 gas pipeline project, which would route Russian gas eastward through Mongolia into China, has advanced diplomatically in ways that could eventually reduce Beijing's appetite for Atlantic Basin LNG cargoes.2 Should PoS-2 materialise at scale, it would tighten competitive pressure on US exporters and redirect Chinese gas procurement toward Russian pipeline volumes at contracted prices, potentially softening the JKM premium that currently underpins the economics of long-haul LNG shipments from the Gulf Coast.
But that shift is years away at minimum. In the interim, China's industrial gas demand growth continues to support spot LNG purchases, and the arbitrage economics between US export terminals and Asian landing ports remain constructive. Contrarian signals in the current market suggest JKM could find upside from geopolitical disruption risk and underlying Chinese demand, even as the consensus leans bearish at a 40% directional confidence level.4
European prices tell a parallel story. ICE Endex TTF front-month was trading at €41.02 per megawatt-hour on Friday (2026-06-26), having spiked toward $14.80 per million Btu immediately after the Hormuz closure, according to EIA data.3 The Trans-Adriatic Pipeline, which brings Azerbaijani gas through Turkey and into southern Europe, provides a buffer against LNG supply tightness in the European market — though its capacity is a fraction of what Russian pipeline flows once contributed. EU gas storage stood at just 34.4% of capacity as of February 6 (2026-02-06), AGSI+ data showed, running 25.4% below the same point last year and 31.4% below the five-year average.4 That depleted starting point raised the stakes for summer injection and kept European buyers attentive to any disruption in Atlantic LNG flows.
The clearest near-term variable for the US-to-China supply corridor is the pace at which Hormuz shipping lanes normalise and at what rate Qatari and other Middle Eastern volumes return to spot markets. Corpus Christi cargo economics relative to JKM will tighten as Qatar restores export volumes. How quickly JKM settles into a new equilibrium — with Power of Siberia 2 looming as a multi-year wildcard — is the question traders will be pricing into long-dated LNG contracts through the remainder of 2026.2,1