Global markets were rocked by U.S. administrative actions, leading to a sharp downturn across major indices. The UP World LNG Shipping Index (UPI) fell 9.27%, mirroring broader uncertainty. Despite the plunge, fundamental energy needs remain unchanged, suggesting the LNG shipping sector’s intrinsic value is intact. Among UPI constituents, performance was mixed. While MISC posted a rare gain, most companies saw double-digit losses, including a 38.3% drop for New Fortress Energy due to both market pressure and internal debt concerns.
UPI & SPX
The UP World LNG Shipping Index, which tracks listed LNG shipping companies, lost 15.29 points (9.27%), closing at 149.64 points, while the S&P 500 index declined by 9.08%. The chart below illustrates the performance of both indices with weekly data.
Week 14-2025: Chart of the UP World LNG Shipping Index with S&P 500 (Source: UP-Indices)
Broader view
The US administration’s actions have caused another global stock market plunge. Since everyone is writing about them, here are just a few brief remarks.
Price has become detached from value because value remains unclear in the emerging world order. The price is still clearly visible. However, the issue of capital markets being oversaturated with money from central bank quantitative easing also plays a long-term role.
Energy needs will not change, so the value of LNG shipping sector stocks will remain the same. While the oil price is falling, natural gas (Henry Hub) holds its price. Therefore, we maintain a slightly optimistic outlook despite the fall in prices.
Constituents
The key event this week is the resignation of Flex LNG CEO Oystein Kalleklev. This is a significant loss even for those not holding shares, as his earnings conference calls were among the most informative in the LNG shipping sector. Thank you, Oystein, and good luck.
Despite the misery of the past week, we start with a headline-positive result. MISC (KLSE: 3816) achieved a 0.8% gain.
Conversely, New Fortress Energy (NYQ: NFE) was the biggest faller, which wrote off 38.3%. This is partly due to the situation in the stock markets; the other is the company’s high debt, although management is taking steps to reduce it (divestment of Jamaican assets to Excelerate Energy).
The list of other double-digit declines is rich: Tsakos Energy Navigation (NYQ: TEN) and Golar LNG (NYQ: GLNG) wrote off 19%, bp (NYQ: BP) lost over sixteen per cent, Awilco LNG (OSE: ALNG) fell 16%, “K” Line (TSE: 9107) wrote off almost fifteen per cent. Shell (NYSE: SHEL) dropped 11.8%. Excelerate Energy (NYQ: EE) fell 11.6%.
Excluding ALNG, the following companies have a broader scope than the LNG midstream sector. How have companies that operate solely in this sector reacted? Cool Company (NYSE/OSE: CLCO) experienced a loss of 14%, Chevron (NYSE: CVX) fell by 13.7%, and Flex LNG (NYSE/OSE: FLNG) declined by 11.4%, which is more than UPI's loss. Additionally, trading on the Qatar exchange was restricted due to Ramadan, so Nakilat, which has a 20% weighting, did not respond to Trump’s tariffs yet.
Smaller decliners were NYK Line (TSE: 9101), which lost 9.8%; SM Korea Line (KRX: 005880), down 6.4%; Mitsui O.S.K. Lines (TSE: 9104), down 8.6%, Capital Clean Energy Carriers (NYQ: CCEC), down 7.9%, and Dynagas LNG Partners (NYQ: DLNG), down 6.9%.
Crystal Ball
Despite the growing global uncertainty caused by the US administration, our outlook remains cautiously optimistic. However, we expect increased volatility in the coming weeks. LNG spot rates stayed low, but the impact remains marginal for most UPI constituents. The market is watching for potential breakouts at key resistance levels, which could determine the next price direction.
Our outlook remains steadfastly positive in the long term. The burgeoning demand for LNG, bolstered by situational or management-driven actions and the potential for new long-term contracts, paints a promising picture. Investors should watch policy developments, market competition, and upcoming corporate earnings for further direction.
Source: By Tomas Novotny, UP-Indices.com