In a sudden diplomatic turn, Iran announced on Friday (April 17) that it would reopen the Strait of Hormuz, ending a nearly two-month blockade that had disrupted energy shipments from the Persian Gulf.
The decision followed weeks of heightened military tensions and a brief but disruptive conflict that began in February.
Yet as the trade corridor reopened, skepticism deepened among European and Asian buyers. US President Trump responded to the announcement by vowing to continue blocking Iranian ports, signaling that Washington does not consider the crisis resolved.
Mixed messages have left global energy traders in a state of cautious uncertainty, with spot prices remaining volatile despite the immediate easing of transit restrictions.
Recently, European energy buyers, including Germany’s state-owned Uniper, have been exploring the possibility of purchasing liquefied natural gas (LNG) from Canada’s Pacific coast, assessing the cost of shipping through the Panama Canal to bypass the blocked Strait of Hormuz.
The closure of Qatari facilities following the outbreak of the Iran war in February has dealt a blow to global supply, sending March benchmark spot prices up more than 60 per cent in Europe and 90 per cent in Asia-Pacific markets.
Three sources familiar with the matter told reuters European buyers are engaged in commercial negotiations with KSI Lisims LNG, a proposed export terminal in northwestern British Columbia.
Backers are working to finalize offtake contracts ahead of a final investment decision expected this year. Shell (NYSE:SHEL) and TotalEnergies (NYSE:TTE) have already signed 20-year purchase agreements with the facility.
Historically, Canada’s LNG sector has been strictly focused toward Asian markets. Shipping from the West Coast to Europe requires navigating the Panama Canal, increasing tolls and transit times.
Canada currently lacks east coast export infrastructure beyond Repsol’s terminal in Saint John. However, the Middle East conflict has changed the risk calculus for buyers seeking stable jurisdictions.
“Since the war in Iran started, there has been particularly strong interest in the (KSI Lisims) offtake from LNG buyers around the world, including Europe,” said a source familiar with the KSI Lisims project.
Uniper depended on the US for 96 percent of its LNG imports last year. Now, KSI Lisims is seen as a potential opportunity to diversify that supply.
capitalizing on supply gap
While the KSI LISIMS will take years to build, Canadian officials and executives are pushing to accelerate the backlog of domestic projects to gain market share from the U.S., which has opened eight LNG terminals since 2016 and expects to open four more by 2028.
one in Recent Webcast Speech TC Energy CEO Francois Poirier warned the Canadian Club of Ottawa that Canada must move faster.
“Geopolitical events have presented Canada with a generational opportunity,” Poirier said. “But to achieve this, Canada must improve competitiveness and attract global capital to make great things happen again.”
TC Energy operates the Coastal GasLink pipeline, which supplies LNG to Canada in Kitimat, British Columbia.
The facility, Canada’s first active LNG export terminal, began shipping to Asia last June. The pipeline will also supply the Cedar LNG project, which is currently under construction along with the Woodfibre LNG facility near Squamish.
Despite being the fifth-largest producer of natural gas in the world, Canada ranked 19th out of 24 LNG exporting countries last year.
“The United States continues to lead the race to meet global LNG demand – Canada should win this race due to its proximity to Asia and abundant low-cost natural gas supplies,” Poirier said.
To accelerate development, Prime Minister Mark Carney’s government has referred several facilities to the federal Major Projects Office. how were the lyceums couple On the fast-track roster in November, following LNG Canada’s Phase 2 expansion plan in September.
Don’t forget to follow us @INN_Resource For real time news updates!
Securities Disclosure: I, Gian Liguid, do not have any direct investment interest in any of the companies mentioned in this article.
