LNG supply crisis pushes buyers toward coal and oil
This digest was compiled by AI from multiple sources — links to the originals are below.
The Iran conflict has disrupted LNG shipments through the Strait of Hormuz and Bab el-Mandeb, driving European gas prices to four-month highs above €60/MWh. Asia, which accounts for nearly 90% of Middle East LNG exports, faces severe supply shortages. Even as QatarEnergy estimates 12.8 million tonnes per year of LNG capacity will be offline for three to five years, buyers are turning to coal and oil as substitutes.
Supply Disruption
The US-Iran war has effectively closed the Strait of Hormuz and Bab el-Mandeb, key chokepoints for global LNG trade. According to ICIS, only 26 LNG cargoes have left the Gulf since Feb. 28, compared to the usual 90-100 per month. European gas storage is now less than 54% full, down from 64% a year earlier, raising winter shortage fears.
Infrastructure Damage
Iranian missile and drone strikes hit Qatar's Ras Laffan LNG Trains 4 & 6 and Pearl GTL Train 2 during spring 2026. QatarEnergy estimates repairs to the two Ras Laffan units will sideline about 12.8 million tonnes per year of LNG capacity for three to five years. Pearl GTL Train 2, co-owned by QatarEnergy and Shell, requires a year-long outage.
Price Surge
The Platts JKM benchmark for spot LNG in Asia rose from about $15/MMbtu in early May to $21.35 currently, nearing mid-$25 levels last seen in December 2022. S&P Global price reporter Cindy Yeo noted that importers in India, Bangladesh, and Taiwan are scrambling for replacement cargoes on the spot market. The Dutch TTF benchmark briefly exceeded €60/MWh, near peaks at the start of the conflict.
What's Next
European governments may need to intervene if gas prices stay above €60/MWh, ICIS warned. It remains unclear how long the Strait of Hormuz will remain closed and whether Qatar can accelerate repairs to its damaged LNG trains.
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LNG supply crisis pushes buyers toward coal and oil
