Hormuz disruption could reshape global LNG trade and shipping patterns through 2031

“This is evidenced by recent (significant) purchases of over 23M tonnes per annum (mtpa) of LNG by Qatar Gas from the US, potentially increasing tonne-mile demand,” said maritime investment and advisory platform Maritime OIC (MOIC) managing partner Ryan Lynch.

MOIC has modelled global LNG supply and demand through 2031, including a scenario involving a prolonged disruption to traffic through the Strait of Hormuz. 

According to the simulations, 57% of scenarios include some form of closure by 2031. This reflects a 50% probability assigned to an event occurring in 2026 in the underlying dataset, with the remaining risk arising from an assumed annual hazard rate of 3% thereafter.

Gulf LNG exports are projected to fall from 90M tonnes to 68M tonnes during an acute nine-month disruption period in 2026, representing a decline of approximately 24%. Exports are then expected to recover over the following two years, reaching a level 10% below the pre-disruption trend.

However, supply chain risks associated with these purchases are expected to persist, while the arrangements surrounding transit fees remain ambiguously defined, Mr Lynch noted.

The model also anticipates lasting changes in global trade patterns, with Gulf cargoes increasingly directed towards Southeast and mid-Asia. Meanwhile, Asian buyers are expected to continue diversifying their supply sources towards the Atlantic Basin, Cape of Good Hope routing is likely to become more established, and strategic inventories are expected to increase.

During the initial phase, the loss of export volumes would outweigh the impact of longer voyage distances, reducing LNG shipping demand by around 33 vessel-equivalents. Across 2026-27, the model projects a net decline of three vessel-equivalents. 

By 2028, however, structural changes in trade flows are projected to add 10 vessel-equivalents to shipping demand, with the final impact depending partly on the timing of additional Qatari LNG volumes from the US.

The analysis suggests that a closure of the Strait of Hormuz may not fundamentally alter the longer-term LNG shipping market balance, but could significantly reshape trade routes, risk appetites and vessel deployment. Even if geopolitical tensions ease and export volumes recover, trade patterns may not return to their pre-disruption configuration. 

MOIC used the Monte Carlo method to model a range of potential outcomes. The simulation combines probability-weighted liquefaction capacity additions, a projected fleet supply schedule and 10,000 simulations of tonne-mile demand to estimate LNG carrier requirements through 2031.