Kuala lumpur: Asian liquefied natural gas (LNG) prices are expected to decline further for the remainder of the year if peace talks between the United States (US) and Iran progress, according to Rystad Energy.

According to BERNAMA News Agency, Masanori Odaka, Rystad Energy's vice-president of gas and LNG research, noted the recent softening in Asian LNG prices. The front-month daily price for September fell 5.0 percent week-on-week to US$20.5 per million British thermal units (MMBtu), while the more liquid derivatives price for October dropped 2.8 percent week-on-week to US$20.3 per MMBtu.

Odaka explained that markets are anticipating peace, with easing tensions between the US, Israel, and Iran contributing to the decline in gas prices. However, tight Gulf LNG supply is preventing prices from falling further. Recent developments, such as a Trump-Netanyahu meeting, a pause in US-Iran strikes, and renewed diplomatic engagement, have raised hopes for the resumption of ceasefire talks, influencing market sentiment.

Odaka also mentioned that Oman is advocating for a Gulf-backed plan to restore normal shipping through the Strait of Hormuz, although management of the waterway remains contested. The reduced geopolitical risk premium has led to lower European and Asian gas prices, but the tight LNG supply in West Asia is limiting the extent of the decline. Some traders believe that the market remains fundamentally tight in Asia as long as Middle Eastern supply volumes are subdued.

At the time of writing, Brent crude was down 0.93 percent to US$88.20 per barrel.