1 June 2019
Oil's volatility hastening decline in oil-indexed LNG pricing
The pricing of often decades-long liquefied natural gas (LNG) contracts is becoming more unpredictable as a result of oil price swings
Driven by rising supply and expansion in export capacity from Qatar, Australia and more recently the US, the diversification of LNG supplies is driving an evolution of the contractual terms through which it is sold. Buyers now have greater bargaining power when negotiating contracts, and with the recent volatility in oil prices, there is extra uncertainty about what level of oil-indexation will be required in new contracts. Ultimately, it seems certain that sellers will look for alternative ways of selling their contracted volumes. Since the LNG industry's birth in the 1960s, when natural gas started being used in Europe and North East Asia as an alternative to oil products for power genera
Also in this section
10 March 2026
Eni’s director for global gas and LNG portfolio, Cristian Signoretto, discusses how demand will respond to rising LNG supply, and how the company is expanding its own gas and LNG operations through disciplined, capital-efficient investments
9 March 2026
Petroleum Economist analysis sees increases in output from Saudi Arabia, Venezuela and Kazakhstan among others before region’s murky descent
9 March 2026
Energy sanctions are becoming an increasingly prominent tool of US foreign policy, with the country’s growth in oil and gas production allowing it to impose pressure on rivals without jeopardising its own energy security or that of its allies, argues Matthew McManus, a visiting fellow at the National Center for Energy Analytics
6 March 2026
The March 2026 issue of Petroleum Economist is out now!
