The Middle East conflict already caused a cumulative loss of 120 bcm of LNG supply over the 2026-30 period, altering the medium-term outlook in addition to the short-term supply disruption.
LNG exports from Qatar and the UAE dropped by close to 20 bcm yoy since the effective closure of the Strait of Hormuz, which naturally tightened supply fundamentals and drove-up Asian and European gas prices to their highest levels since Jan23.
The restart and ramp-up of Qatar’s vast LNG liquefaction complex could take several weeks according to industry estimates, leading to an additional loss of 10 bcm compared to regular operating rates, even if the conflict ends tomorrow.
Besides the short-term disruption, the damage caused to Qatar’s Train 4 and 6 would require several years to repair. Assuming a repair period of 4 years, it would lead to a cumulative supply loss of 70 bcm between 2026-30.
In addition, Qatar’s giant North Field East expansion project (45 bcm/y) is likely to be delayed by at least one year, further reducing expected LNG supply by around 20 bcm.
The 120 bcm cumulative loss accounts for around 15% of the expected global LNG supply over the 2026-2030 period and will ultimately be offset by the start-up of new liquefaction facilities through the medium term. Without all these new projects, the market would be in a much more difficult and more vulnerable state.
The impact of the losses is largely concentrated through 2026-2027 and, as such, delays the market easing effects of the LNG wave by at least two years. So the LNG wave is still coming, but its effect will be delayed.
The current crisis also highlights the need for continued adequate investments across the gas and LNG value chain, and the key role of diversified LNG contract portfolios to weather supply shocks and limit price volatility. Adequate investments, long-term contracts and closer international cooperation will be all needed to strengthen the architecture of global gas supply security.
Source: Greg Molnar
