By Sing Yee Ong and Stephen Stapczynski (Bloomberg) — The cost of transporting liquefied natural gas (LNG) across the Atlantic Ocean has reached its highest level in almost two years, driven by an increase in exports from North America which in turn has raised the demand for tankers.

The daily spot rate for hiring an LNG vessel to deliver from the US to Europe surged by 19% to $98,250 on Monday, marking the highest price since January 2024, based on data from Spark Commodities. Similarly, the cost of hiring a tanker in the Pacific also rose by 15%, hitting its highest point in over a year.

This shift in the market is significant, considering that it had been struggling at very low prices for most of the year due to the oversupply of available ships. With production in North America steadily increasing due to new projects, more vessels are needed to transport the fuel to customers in Europe and Asia.

According to ship-tracking data from Bloomberg, the 30-day moving average for LNG exports from North America has increased by nearly 40% year-to-date.

Rising freight rates could widen the price gap between gas in Asia and Europe, as shipping costs from the US to the Pacific will become more expensive. Traders reported that a company has booked an Atlantic vessel for December at a rate of about $100,000 per day.

In the past, when freight rates were lower, some companies had sent vessels to Asia, which worsened the shortage of ships in the Atlantic, traders noted.

Despite the increase in charter rates, experts believe that the peak has likely been reached and that there isn’t much room for further upward movement. Han Wei, an analyst at BloombergNEF, stated, “On the LNG tanker supply side, we’ll continue to see strong new build deliveries, which should keep spot charter rates in check.”