IEA says Middle East fighting could cut global LNG flows by about 15%

Liquefied natural gas is supposed to be the relief valve for global energy markets. When one region comes up short, cargoes can sail somewhere else and soften the blow. But that only works if the ships can move and the export plants keep running. The IEA’s warning is that the Middle East war has broken both parts of that system at once — and the damage is no longer just a short-term shipping scare. ### What actually changed? On April 24, the IEA said the conflict in the Middle East had fundamentally changed the gas outlook for 2026 and beyond. The trigger was the de facto closure of the Strait of Hormuz to LNG cargoes at the start of March, plus damage to liquefaction infrastructure in the region. Instead of a market heading into easier conditions, the world is now looking at delayed supply growth and much tighter balances. ### Why is Hormuz such a big deal? Because Hormuz is not just another shipping lane. It is the narrow exit route for Gulf LNG exporters, especially Qatar and the UAE, which matter enormously in global gas trade. If that chokepoint is disrupted, the market loses a huge chunk of flexible supply fast. The IEA says almost 20% of global LNG supply has been lost for now because of the closure and related disruptions. (iea.org) ### Where does the 15% number come from? This is the medium-term part of the story. The IEA’s gas report says the cumulative losses from the conflict amount to around 15% of expected global LNG supply over 2026-2030 — roughly 120 bcm. That is not saying 15% of all LNG vanishes forever. It means a meaningful slice of the supply growth the market expected over the next several years is now gone or pushed back. (iea.org) ### Why does “delayed supply wave” matter? Because the market had been counting on a big buildout of new LNG export capacity — especially from North America — to loosen conditions and lower prices. In fact, the IEA says the market was rebalancing during the 2025/26 heating season. Global LNG trade rose 12% year over year from October through February, and prices in Europe and Asia had fallen by roughly a quarter from a year earlier. (iea.org) That easing has now been interrupted. ### So why didn’t new U.S. supply fix it? It helped, but it could not fully replace Gulf losses. The IEA points to new North American output — especially Plaquemines LNG in Louisiana — as a major reason the market had been softening before March. But replacing disrupted Qatari and Emirati volumes is harder than just turning one more plant on. Shipping routes, spare capacity, maintenance, and contract structures all matter. (iea.org) Basically, the market had a cushion, but not a big enough one. ### What happened to prices? Volatility came back fast. The IEA says gas prices in Asia and Europe jumped to their highest levels since the 2022/23 energy crisis during March. ICE data show the front-month Dutch TTF contract was still around €43.71/MWh on May 8, which is far above the calmer levels traders had hoped the LNG buildout would deliver. (iea.org) ### Who feels this first? Europe is the obvious pressure point because LNG has become a structural baseload fuel there as pipeline imports fell and domestic production declined. The IEA says Europe’s LNG imports hit an all-time high over the 2025/26 winter. Asia feels it too, but Europe is especially exposed because it still relies on seaborne gas to refill storage and get through winter without another price shock. (iea.org) ### Bottom line The key shift is that this is no longer just a war-risk premium in prices. The IEA is saying the conflict has physically changed the LNG supply path through 2030. If Hormuz stays impaired and damaged export capacity takes time to recover, the “more supply is coming” story still holds — but later, and with a lot less comfort in between. (iea.org)