Potential Hormuz LNG losses rival Europe’s gas supply gap following Russian cuts

Commodity market intelligence firm ICIS noted in its Q1 LNG report that potential annual losses could reach around 85M tonnes, or 120Bn m³ of pipeline gas equivalent.

This is broadly comparable to the volume Europe lost between 2022 and 2023 after the curtailment of most Russian pipeline gas flows (150Bn m³/year). “However, the loss could be much smaller if the strait reopens quickly, as many in the market hope. Few would yet expect a closure for a whole year,” ICIS said.

Qatar and the UAE together produce around 85M tonnes of LNG annually, meaning that each month the strait remains closed could remove nearly 7M tonnes of supply from the market.

ICIS had forecast at the start of the year that global LNG supply would reach 473M tonnes in 2026, an increase of 31M tonnes compared with 2025. However, a four-month closure of the Strait of Hormuz would effectively erase this growth, the firm said. The strait has already been closed for two months, with no immediate resolution in sight.

Qatar’s LNG exports were recorded at 14.9M tonnes in the period, down 32% from 21.8M tonnes in Q1 2025, although the country still ranked as the world’s third-largest exporter over the quarter.

Cargo competition

ICIS warned that buyers may need to act to delay the impact of tightening supply conditions.

Europe will have increasing requirements to inject gas into storage ahead of winter, while fertiliser plants must restart production eventually to ensure next year’s crops can grow. 

“That means there is potential for spot market competition to intensify later in the summer as more buyers return to the market,” ICIS said.

Meanwhile, Pakistan – which imports LNG from Qatar – has had to return to the spot market to secure a prompt cargo, before reportedly agreeing arrangements with Iran for the delivery of Qatari LNG cargoes to the country.

“As countries like Pakistan come back into the market for cargoes, prices could climb towards the US$20/MMBtu level. If competition later in the year intensifies between wealthier Asian and European buyers such as Japan, prices could rise to US$30/MMBtu or higher next winter, even if the strait has reopened by then – particularly if the winter is cold and European storage is low,” ICIS noted.

Largest exporters and importers

According to ICIS, global LNG exports increased by 7% in Q1 2026 compared with the same period last year.

The United States remained the largest exporter at 32.9M tonnes, followed by Australia at 19.8M tonnes and Qatar in third place.

Russia exported 9.0M tonnes during the quarter, up 0.9M tonnes year on year, driven by output from the sanctioned Arctic LNG 2 project, which has been operating since mid-2025 and supplying cargoes to China.

Global LNG imports also rose by 7% year on year in Q1 2026.

The four major East Asian importers – China, Japan, South Korea and Taiwan – remained the largest regional bloc, importing 52.2M tonnes, up 4% year on year.

China was the second-largest importer during the quarter, losing the top position it held in Q4 2025 due to a sharp decline in imports. Japan overtook China to become the largest importer, receiving 18.1M tonnes, ICIS data showed.