Middle East turmoil to delay LNG supply wave by at least two years

The IEA estimates that LNG supply losses from Qatar and the United Arab Emirates will total around 20Bn m³ over March and April.

“Furthermore, the restart and ramp-up of LNG liquefaction plants could take several weeks, resulting in output being around 10Bn m³ lower than under normal operations,” the agency said.

Beyond disruptions to LNG flows via the Strait of Hormuz, the IEA noted that damage to Qatar’s liquefaction infrastructure has weakened the outlook for global LNG supply growth over the medium term and is expected to delay the impact of the emerging LNG supply wave by at least two years.

“The damage caused by attacks on Qatar’s LNG facilities could reduce the country’s LNG output by nearly 70Bn m³ by 2030, assuming a four-year repair period,” the agency added.

Delays to the North Field East expansion project could further reduce LNG supply by close to 20Bn m³ from 2026 to 2030.

According to the IEA, the Middle East conflict has already resulted in the loss of around 120Bn m³ of cumulative LNG supply over 2026 to 2030, when accounting for both near-term disruptions and medium-term impacts.

“These losses represent around 15% of expected global LNG supply over 2026 to 2030 and are likely to be offset over time by the start-up of new liquefaction capacity,” the agency said.

“The impact on growth is largely concentrated in 2026 to 2027 and therefore delays the market-balancing effects of the LNG wave by at least two years.”

Growth stalls

Global LNG supply increased by around 12% year-on-year between October and February, supported primarily by the ramp-up of new liquefaction projects in North America and Africa, according to the IEA.

However, growth stalled in March following the closure of the Strait of Hormuz. Global LNG deliveries fell by 2% year-on-year in March, “as the full impact of the disruption takes time to materialise due to shipping times.”

Deliveries declined by 10% year-on-year in the first 20 days of April.

Riviera has reported on analysts’ estimates that the crisis is expected to weigh most heavily on Asia. “Even under the base case, Asian LNG imports are forecast to decline sharply in 2026, with only limited recovery until prices ease,” Poten & Partners said.