No deep dive into any industry or sector should start with a downer. However, there are no two ways about it – the LNG shipping sector has been in freefall of late and nothing earth-shattering has happened in the first two months of this year to convince people that it will improve drastically. But, there might be some normalisation, if not recovery, on the horizon if certain factors align properly. First, the situation is bleak. According to Clarksons’ weekly report from February 21, LNG carrier spot rates are still close to record lows which were seen at the beginning of the month. The average spot rate assessment for a 174,000 cu m unit increased to $9,250 per day which is down 83% from the 2024 average. This means that you can hire a 174,000 unit for 10 days and still pay less than one night for the most expensive hotel room in Las Vegas. On their own, albeit bad, these numbers only provide the real picture when put into context. In November 2023, LNG spot rates were in the $200,000 per day region just to fall to an average of $50,000 per day in 2024. The nosedive is even more emphatic if we look at the daily rates in 2022 which went easily over $500,000 at a certain point. The US is expected to add the largest new production volumes in 2025 So, now that the numbers painted a grim image it is important to understand why are these things happening and how is any of this going to get better. And, most importantly, when. The growth of the LNG fleet far outpaced the growth in LNG trade in 2024 which took a toll on charter rates. This was not even fully offset by the need for longer journeys as the Suez Canal was almost unusable due to the permanent threat of Houthi attacks. In 2024, 62 new LNG vessels were delivered to operators while another 68 orders were placed during the year. At the beginning of this year, several new vessels hit the water and capacity overhang increased, resulting in rates dropping to historic lows. These drops also mean that many vessels are sailing at rates below the operating expense of LNG vessels estimated at around $15,000 per day. UK consultancy Drewry reported that 96 more LNG carriers are scheduled to be delivered next year, aggravating the oversupply situation, which is also a cause for concern. They also believe that most shippers will continue to avoid the Suez Canal and go around the Cape of Good Hope which will partially improve the situation. However, if the truce in Gaza lasts and Houthis refrain from attacking vessels and keep the Red Sea calm, a return to the Suez could put even more pressure on already weak rates. Another issue could be a possible escalation in the Iran-Israel conflict and the closing of the Strait of Hormuz. Regional exports, which account for 21% of the global LNG supply, could be blocked. But it is not all bad. Even though this year will be a tough one by all accounts, experts do agree it will be at least stable. The UP World LNG Shipping Index (UPI), which comprises 19 companies and partnerships worldwide and represents around two-thirds of the world’s LNG carrier fleet, said in a recent report that the future of LNG shipping is, in a word, optimistic. “LNG is now a crucial global commodity, and its importance is still rising. The third wave of development is now running, but the construction of new liquefied capacities is a bit late. On the other hand, the shipbuilders are on time, so the vessels are oversupplied now,” the report stated. They predict that a near rise of cap