First LNG-Laden Tanker Transits Red Sea In About One Year

According to Anas Alhajji, managing partner at Energy Outlook Advisors, Salalah LNG has become the first liquefied natural gas (LNG) laden carrier to transit the Bab el-Mandeb Strait at the southern end of the Red Sea in nearly a year. The transit marks a shift in the critical maritime chokepoint, as LNG-laden tankers had been diverting around the Cape of Good Hope to avoid the threat of drone and missile attacks from Iran-backed Houthi forces after more than a year of chaos because of a weak Biden-Harris administration.

"Major economic and political development: First LNG-laden carrier in about a year is crossing the Red Sea! Salalah LNG is carrying Omani LNG to an unknown destination," Alhajji wrote on X. 

He asked a critical question: "Is this the start of a trend?" 

Marine Traffic data shows that Salalah LNG is flying under the Panama flag with "Armed Guards." The vessel's current position is in the northern stretch of the Red Sea and is set to arrive at a Turkish port on Sunday. 

"Finally a real test case. Regional risk premium has been pricing in zero traffic - this could shift the whole equation," one X user said in response to Alhajji's post. 

Many LNG tankers diverted around the southern tip of Africa and crossed the Cape of Good Hope rather than risk Houthi attacks in the critical maritime chokepoint.  

Last week, shipping executives had their hopes that safety and security would be restored along the shipping lane squashed by President Trump after he announced a proposal to take over Gaza.

Jan Rindbo, CEO of commodities shipping group Norden, told the Financial Times over the weekend that Trump's plan added "to this picture of turmoil and tension in the Middle East, and that could prolong the Red Sea issue." He said the Gaza plan increased "the risk that the Houthis are not just going to sit tight." 

Bridget Diakun, maritime risk analyst at Lloyd's List Intelligence, said that while "a small number of vessels are returning," others shippers still "waiting for proof of stability."

"A week ago, there was a light at the end of the tunnel," said Lars Jensen, CEO of Vespucci Maritime. But now, "the likelihood of a return to the Red Sea is reduced." 

The Salalah LNG's transit also shows just how desperate Europe is for LNG. EU NatGas prices jumped to two-year highs on Monday amid stockpile reductions below 15-year averages.