Asian LNG Prices Hit Three-Year High and US Diesel Surges as US-Iran Hostilities Intensify Around Strait of Hormuz

Spot liquefied natural gas prices for Asian buyers surged to their highest level in more than three years, hitting $25.908 per million British thermal units on Wednesday for a roughly 5% weekly gain, as renewed US strikes on Iran raised fears of prolonged disruptions to energy flows through the Strait of Hormuz. President Trump described an overnight heavy attack on Iranian equipment along the strait, including defensive and offensive infrastructure, and said the US was prepared to carry out another one, though he signaled the campaign could be brief.

US retail diesel prices climbed to a four-year high of $5.783 per gallon on Wednesday, surpassing a wartime peak set in April and closing in on the all-time record of $5.816 set in June 2022. The surge reflects tightening global supply as the Iran conflict strains energy markets, compounding pressure from Europe entering the end of summer with an unusually low natural gas buffer, intensifying the global scramble for supply.

Oil prices pulled back slightly after a three-day rally, with investors weighing Trump's signals of a potentially limited campaign against the broader risk of sustained Hormuz disruption. Dubai crude futures nonetheless approached $100 per barrel, driven by an Asian buying spree as Chinese and Indian refining majors including Indian Oil Corp. and PetroChina, along with South Korean and Japanese refiners, aggressively sought Middle Eastern crude grades despite the conflict. Saudi Arabia's oil exports fell to their lowest level since 2017, adding further tightness to Middle Eastern supply.

Russia's deputy prime minister Alexander Novak said the country would begin increasing oil output once refineries complete scheduled maintenance. The US Energy Information Administration's weekly petroleum status report has been rescheduled to Thursday, September 10 due to the September 7 federal holiday.