Research — July 23, 2026
Global LNG Outlook After Middle East Conflict
The global LNG market entered 2026 still reeling from the 2022 Russia-Europe gas shock. Then the Middle East conflict introduced a second major disruption in five years, raising a high-intent question for gas buyers, policymakers and market participants: how resilient is LNG when a major supply route becomes a geopolitical chokepoint?
In the S&P Global Market Intelligence webinar, Implications for the Global LNG and Gas Markets: Middle East Conflict, Laurent Ruseckas, Executive Director, Global Gas, Geopolitics & Finance of S&P Global Energy, examined how the closure and partial reopening of the Strait of Hormuz affected LNG supply, prices, buyer behavior and long-term market balances. The analysis showed a market disrupted by a large supply shock, but also one shaped by faster policy responses, softer European demand and a growing pipeline of new liquefaction capacity.
Key Highlights
- The Strait of Hormuz closure immediately removed a significant share of global LNG supply, mainly from Qatar.
- Gulf LNG exports began restarting after the June 17 MOU, but the recovery remained slow and operationally complex.
- Spot LNG and European gas prices spiked but stayed well below 2022 crisis levels.
- Asian and European market responses helped limit the scale of price escalation.
- Long-term LNG demand remains supported by Asia, even as new supply points toward eventual overcapacity.
1. Why did the Strait of Hormuz disruption matter so much for LNG markets?
The Strait of Hormuz disruption mattered because it affected one of the world’s most important LNG export routes at a time when the global gas market had not fully recovered from the 2022 Russia-Europe supply shock. Iran’s closure of the Strait of Hormuz cut 17% of global LNG supply overnight, mainly from Qatar. The impact was compounded by the March 19 attack on Ras Laffan, which took 16% of Qatari LNG capacity offline for about four years. This created both an immediate and a structural disruption: the market faced a chokepoint event and a lasting reduction in Qatari capacity.
How quickly are Gulf LNG exports recovering after the June 17 MOU?
The restart of Gulf LNG exports has been underway but uneven, reflecting the operational and geopolitical complexity of reopening trade through the Strait of Hormuz. The deck noted that seven laden LNG vessels had exited the Gulf since June 17, while a total of 22 cargoes had exited since mid-April. That remained far below prewar levels of 85 to 100 cargoes per month. The webinar also noted that at least 10 ballast LNG carriers had returned to the Gulf in the prior two weeks, though none had yet loaded as of the deck’s data cut-off, underscoring that vessel movement had resumed before normal export flows were restored.
Why were LNG and European gas price spikes lower than in 2022?
LNG and European gas prices rose sharply at the start of the conflict, but the increase remained far below the extreme levels recorded during the 2022 crisis. The TTF and JKM were both around $11/MMBtu when the war began, with JKM rising to $25/MMBtu and TTF reaching about $21/MMBtu. 2022 peaks were much higher, with TTF near $90/MMBtu and JKM near $70/MMBtu. The difference reflected a market that had already adapted since 2022, including policy actions in Asia to curtail or ration gas demand and fuel switching in power generation, alongside softer European demand.
What did the disruption reveal about Asian and European gas market resilience?
The disruption highlighted both exposure and adaptation across major LNG-consuming regions. Asian markets responded quickly with policy measures to reduce gas demand, including fuel switching in the power sector, which helped limit further price escalation. European demand remained soft compared with pre-2022 norms, with the 2022 crisis permanently destroying about 20% of industrial demand. At the same time, European storage remained a market concern: the storage levels near the bottom of the historical range and referenced the EU’s 80% storage target, making the pace of refill an important variable for the LNG market.
Is the LNG market still moving toward long-term overcapacity?
Despite the disruption, S&P Global Energy’s analysis indicated that the LNG market remains on a path toward eventual overcapacity as new supply comes online. The long-term LNG demand will rise from roughly 400 MMt in 2025 to about 750 MMt by 2050, with Asia remaining the core growth driver. India, South Asia and Southeast Asia are especially important, with South and Southeast Asian LNG demand rising from about 65 million tonnes last year to 220 million tonnes by 2050. At the same time, liquefaction capacity additions are expanding rapidly from 2026 onward, including US LNG export capacity rising from roughly 100 MMtpa in 2025 to around 200 MMtpa in 2030 and about 250 MMtpa in 2035.
How S&P Capital IQ Pro Supports LNG Market Analysis
S&P Global Energy research, available through S&P Capital IQ Pro, provides financial institution clients with access to gas and LNG analysis, short-term supply-and-demand outlooks, price forecasts, market reports, country profiles and commodity news. Users of Capital IQ Pro can search for topics such as Hormuz or gas outlook, filter sector and economic reports, and access LNG supply-demand analysis within the platform. This supports the analysis of the challenges discussed in the article, including LNG supply disruptions, regional demand adjustments, benchmark price movements, storage conditions and long-term liquefaction capacity growth.
Key questions about the global LNG outlook
Review key questions discussed during the LNG and gas market outlook webinar.
How much global LNG supply was affected by the Strait of Hormuz closure?
The closure of the Strait of Hormuz immediately cut 17% of global LNG supply, mainly from Qatar. The disruption was compounded by damage to Ras Laffan, which took 16% of Qatari LNG capacity offline for about four years.
How many LNG cargoes exited the Gulf after the June 17 MOU?
Seven laden LNG vessels exited the Gulf after the June 17 MOU, while 22 cargoes had exited since mid-April. Before the war, 85 to 100 cargoes typically exited the Gulf each month.
Why did LNG prices do not reach 2022 crisis levels?
JKM and TTF prices rose sharply after the conflict began but stayed well below 2022 peaks. The webinar linked the more limited price response to faster policy measures in Asia, softer European demand and market adjustments since the 202 gas crisis.
What role did Europe’s gas storage play in the LNG outlook?
European gas storage levels were near the bottom of the historical range, increasing attention on refill rates and the EU’s 80% storage target. The webinar noted that the return of Gulf LNG supply would reduce the market risk associated with entering winter at lower storage levels.
What regions are expected to drive long-term LNG demand growth?
S&P Global Energy’s long-term view remains supported by Asian demand. The webinar highlighted India, South Asia and Southeast Asia as major growth drivers, with South and Southeast Asian LNG demand projected to rise from about 65 million tonnes last year to 220 million tonnes by 2050.
Is global LNG overcapacity still expected?
The webinar indicated that the market remains on track toward a period of global LNG overcapacity. This view reflects robust demand growth alongside a large wave of liquefaction capacity additions, particularly from the United States.
