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Asia's record summer heat 'heats up' global gas market
🇻🇳 Vietnam /Economy & Trade

Asia's record summer heat 'heats up' global gas market

From Tuổi Trẻ · () Vietnamese

Translated from Vietnamese, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Asia is bracing for a record-hot summer, with temperatures expected to rise significantly above average across the region, exacerbated by the potential formation of El Niño.
  • Increased demand for cooling systems will strain power grids, while drought conditions may reduce hydropower output, forcing greater reliance on fossil fuels and increasing emissions.
  • Global energy markets are already tense due to supply chain disruptions and geopolitical factors, with China's LNG import demand being a key variable influencing future price hikes.

Asia is facing the prospect of a record-breaking hot summer, with meteorological forecasts indicating temperatures significantly above average across much of the continent. Japan is predicted to experience an average temperature increase of approximately 1.5 degrees Celsius, while South Korea and parts of China could see rises of 0.5 to 1 degree Celsius. India is already grappling with temperatures nearing 45 degrees Celsius, and Thailand has recorded a heat index of up to 52 degrees Celsius.

The anticipated formation and strengthening of El Niño between June and August further complicates the outlook. This phenomenon typically reduces rainfall in India and parts of Southeast Asia, heightening the risk of heatwaves and drought, particularly in northern China. Rising temperatures will inevitably boost demand for cooling devices, placing immense pressure on already strained electricity grids. Experts warn that prolonged drought could diminish hydropower production, compelling nations to increase their reliance on fossil fuels, thereby escalating energy import costs and carbon emissions.

The gas market is in a very tense state.

— Helle Ostergaard KristiansenDescribing the current state of the global energy market.

Europe is also confronting potential energy shortages, as low water levels in Swiss hydroelectric reservoirs threaten the operation of nuclear power plants dependent on cooling water. Helle Ostergaard Kristiansen, a senior vice president at Equinor ASA, described the gas market as "very tense," cautioning about physical supply shortages and difficulties in replenishing reserves, a situation expected to worsen over time.

Analysts identify China's liquefied natural gas (LNG) demand as the most significant risk factor in the fragile global supply chain. While the conflict in the Middle East has disrupted about 20% of global LNG supplies, energy prices have not yet experienced the dramatic spikes seen in previous energy crises, largely due to subdued Chinese import levels in March and April. However, this situation could change rapidly as Chinese power companies show signs of preparing to ramp up LNG imports to compensate for shortfalls from Qatar.

Physical gas supply is scarce and filling up storage is very difficult, the longer it lasts the more serious it gets.

— Helle Ostergaard KristiansenWarning about the precariousness of the gas supply situation.
DistantNews Editorial

Originally published by Tuổi Trẻ in Vietnamese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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