Asian LNG Imports Hit Six-Year Low as Hormuz Crisis Traps Qatar Supplies, US Terminals Near Peak Capacity

Asia's imports of liquefied natural gas fell to their lowest level since the COVID-19 pandemic crashed demand in June 2020, as the Strait of Hormuz conflict locked in Qatari and UAE supply that once anchored the region's energy trade. The collapse of weekend peace negotiations between the United States and Iran has now removed any near-term hope of relief, with Brent crude surging above $103 per barrel and LNG spot prices in Asia nearly doubling from their pre-crisis baseline.

Qatar, the world's second-largest LNG exporter, declared force majeure on contracts with buyers in China, South Korea, Italy, and Belgium after Iranian missile strikes in March severely damaged Ras Laffan Industrial City, the country's primary LNG export hub. QatarEnergy chief executive Saad Al-Kaabi said the strikes cut Qatar's LNG export capacity by 17%, representing roughly $20 billion per year in lost revenue, and that full repairs to Trains 4 and 6 at Ras Laffan could take up to five years.

Hormuz Closure Traps Core Gulf Supply

The Strait of Hormuz normally accounts for roughly 20% of global LNG trade. With the strait effectively closed since early March and all Qatari and UAE LNG cargoes unable to reach open ocean, Asian buyers dependent on these supply chains have faced a structural shortage that spot market purchases from alternative sources have only partially addressed.

Asian LNG spot prices have nearly doubled since the crisis began, and regional buyers are now outbidding European importers for available cargoes from Australia, the United States, West Africa, and Norway. The Henry Hub natural gas benchmark in the United States has widened sharply against European and Asian import prices as global buyers compete for remaining non-Hormuz supply.

U.S. LNG Terminals Running Near Historic Capacity

American LNG export facilities have been the primary beneficiaries of the supply dislocation. U.S. terminals exported approximately 18 billion cubic feet per day of natural gas in March, near historic peak capacity, as Asian and European buyers scrambled for Hormuz-independent cargoes.

The recent start-up of Golden Pass LNG Train 1 at Sabine Pass, Texas, the joint QatarEnergy and ExxonMobil project, added new Atlantic Basin export capacity at a moment of acute global demand. TotalEnergies, which holds interest in Cameron LNG in Louisiana, is also benefiting from the pricing environment as long-term contracted volumes now sell into a dramatically higher spot-referenced market.

Inpex Raises Ichthys Condensate Output for Australian Market

Australia, insulated from Hormuz disruptions by its Pacific geography, has emerged as a preferred alternative supplier for Asian buyers. Inpex, the Japanese energy company that operates the Ichthys LNG facility offshore Western Australia, announced it is raising condensate supply from the project to the local Australian market amid elevated pricing conditions.

The Ichthys LNG project, located in the Browse Basin approximately 220 kilometers offshore Darwin, produces both LNG and condensate from the Ichthys gas-condensate field. Japan, which holds Inpex's primary shareholding and is itself facing constrained LNG imports through conventional supply chains, has a direct strategic interest in maximizing Australian-origin gas flows to offset the Hormuz-related supply gap.

Asian Buyers Reassess Long-Term Supply Contracts

The crisis has exposed the concentration risk embedded in Asia's LNG import portfolio. South Korea, Japan, and China collectively relied on Qatar for a substantial share of their long-term contracted volumes. With QatarEnergy's force majeure declaration removing supply certainty for buyers including major South Korean utilities and Chinese national energy companies, procurement teams are accelerating negotiations for diversified supply from the United States, Canada, East Africa, and Australia.

BP, which operates the Tangguh LNG facility in Indonesia and holds LNG trading positions globally, is positioned to redirect cargoes to the highest-priced Asian market as European buyers cope with reduced availability from Atlantic Basin sellers now prioritizing the Asian premium.

The longer-term rebuilding of Ras Laffan, estimated to cost tens of billions of dollars and requiring specialized equipment that faces its own supply chain pressures, means Asian LNG markets are likely to remain structurally tighter for years. Energy analysts at the EIA projected that elevated Brent prices above $100 per barrel through mid-2026 will continue to incentivize LNG investment in non-Hormuz corridors, particularly Canada's Pacific Coast and Australia's northern fields, as the energy trade map permanently shifts away from Middle East dependency. WCS at $84.22 per barrel reflects the Canadian market's own heavy oil dynamics, but the broader price surge above $100 Brent has bolstered economics for Canadian natural gas projects competing for the same Asian LNG demand that Qatar can no longer fully serve.

Sources: gCaptain, U.S. Energy Information Administration, OilPrice.com, Al Jazeera