Middle East conflict disrupts LNG supply, reshapes gas market outlook, IEA says
Friday, April 24 2026 - 01:28 PM WIB
By Romel S. Gurky
The global natural gas market has been thrown into turmoil following disruptions linked to the Middle East conflict, with supply losses, price volatility and shifting demand patterns expected to reshape the market outlook, according to the International Energy Agency.
In its latest quarterly gas market report, the agency said the effective closure of the Strait of Hormuz in early March removed nearly 20% of global liquefied natural gas supply from the market, triggering sharp price increases and heightened uncertainty.
Global LNG production fell by 8% year-on-year in March, with loadings from Qatar and the United Arab Emirates declining significantly. While increased output from North America and Africa helped offset some losses, global deliveries still dropped and continued to weaken into April.
The supply shock pushed benchmark gas prices in Asia and Europe to their highest levels since the 2022–2023 energy crisis. Asian spot LNG prices approached $21 per million British thermal units in March, while European prices averaged around $18 per MBtu. Price volatility also surged, reflecting uncertainty over supply flows and geopolitical developments.
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Demand has also been affected, with consumption declining in key import markets due to higher prices, milder weather and fuel-switching measures. Europe’s gas demand fell by about 4% year-on-year in March, while several Asian countries introduced policies to curb gas use.
The report said each month of disruption to LNG flows through the Strait of Hormuz could result in a loss of around 10 billion cubic meters of supply, further weighing on demand outlooks.
Beyond the immediate impact, the agency warned that the conflict could delay the anticipated expansion of global LNG supply. Damage to infrastructure in Qatar, one of the world’s largest exporters, may reduce output by up to 70 bcm by 2030 if repairs take several years, while planned expansion projects could also be postponed.
Overall, the crisis is expected to result in a cumulative loss of around 120 bcm of LNG supply between 2026 and 2030, equivalent to roughly 15% of projected global supply over the period.
Prior to the disruption, gas markets had been rebalancing, supported by strong LNG supply growth. Global LNG trade increased by 12% year-on-year during the October–February period, helping ease prices and support demand, particularly in Asia.
The agency said the latest developments highlight the importance of supply diversification, investment in LNG infrastructure and stronger international cooperation to ensure energy security.
“The current crisis underscores the need for resilient and flexible gas supply systems,” the report said, noting that diversified supply portfolios and long-term contracts can help mitigate short-term market volatility.
Editing by Alexander Ginting