Shipping Disruption in Strait of Hormuz Affects LNG Supply

The report noted that since early March, disruptions to shipping through the Strait of Hormuz have created unprecedented uncertainty, causing nearly 20% of global liquefied natural gas (LNG) supply to be withdrawn from the market and triggering sharp price increases in major importing regions. During the period of severe market volatility in March, natural gas prices in Asia and Europe rose to their highest levels since January 2023, leading to a contraction in natural gas demand in major LNG import markets.

The report also states that beyond the short-term shocks, this crisis will impact the medium-term market outlook. Damage to Qatar’s LNG infrastructure is expected to weaken future supply growth and delay the anticipated global wave of LNG capacity expansion by at least two years. The combination of short-term supply losses and a slowdown in capacity growth could result in a cumulative reduction of approximately 120 billion cubic meters of LNG supply between 2026 and 2030. Although new LNG projects in other regions are expected to gradually offset these losses, market tightness may persist through 2026 and 2027.

The report emphasizes that global natural gas supply security should be enhanced through sustained and adequate investment across the entire LNG value chain, as well as strengthened international cooperation between producing and consuming countries. It also notes that for natural gas importing countries, establishing a diversified portfolio of long-term contracts can help mitigate the risk of price volatility during periods of market disruption.