S&P Global Platts

Oil Indexation: The virus behind LNG disruption

The COVID-19 pandemic contributed to the global LNG glut. However, it is far from its sole cause. Oil indexation is increasingly an obstacle to efficiently balancing demand and supply.

Oil indexation, which is still dominates Asia’s long-term LNG pricing, has not only hindered the ability of buyers to resell unwanted volumes to other end users. It has also made supply less responsive to demand shocks and falling prices

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