The oversupply of shipping vessels has led to a historic low in LNG freight rates.

With an oversupply of shipping vessels in the market, the cost of transporting liquefied natural gas is significantly decreasing, a development that could alleviate the situation for gas importers and help boost traders' profits.

According to data from Spark Commodities, the cost of chartering a modern tanker with a capacity of 174,000 cubic metres in the Atlantic basin fell to $9,750 a day on Thursday, a decrease of approximately 59% from a month ago, marking the lowest rate on record for such vessels.

Qasim Afghan, a commercial analyst at Spark Commodities, attributed the drop to "the increased number of new ships entering the market, which has increased the availability of ships". The new vessels are being delivered faster than other export projects, which are struggling with delays.

Afghan also noted that more US liquefied natural gas is being encouraged to go to Europe, which is keeping more ships in the Atlantic basin.