The global LNG market is not managing a temporary shock. It is restructuring under permanent pressure.
What was projected to be a period of oversupply has collapsed into a prolonged imbalance, driven not by a single event but by the compounding weight of infrastructure destruction, closed transit corridors, and delayed capacity growth. The market is still clearing. The underlying condition has changed.
The Attack That Changed the Numbers
An Iranian attack on Qatar’s Ras Laffan facility wiped out roughly 17 percent of the country’s LNG export capacity. Two of Qatar’s 14 liquefaction trains and one of its gas-to-liquids facilities were destroyed. QatarEnergy CEO Saad al-Kaabi confirmed the damage will sideline 12.8 million tonnes of annual production for three to five years.
Ras Laffan is the largest LNG liquefaction facility in the world. It has been offline since the first attack on March 2.
QatarEnergy has since declared force majeure on long-term supply contracts with customers in Italy, Belgium, South Korea, and China. Kuwait and Bahrain have also invoked force majeure.
When the Strait Stops Moving
Around 25 percent of the world’s seaborne oil trade transited the Strait of Hormuz in 2025. Over 110 billion cubic meters of LNG passed through it that year. About 93 percent of Qatar’s and 96 percent of the UAE’s LNG exports moved through the Strait. There are no alternative routes for these volumes.
Market conditions shifted abruptly in March when the conflict resulted in the de facto closure of the Strait to LNG cargoes. Global LNG production fell 8 percent year-on-year, with a sharp drop in exports from Qatar and the UAE only partially offset by other suppliers.
The IEA had projected relief. Strong LNG supply growth in the October-to-February period had helped ease prices, with benchmark prices in Europe and Asia declining around 25 percent over that five-month period.
The combined effect of short-term supply losses and slower capacity growth could result in a cumulative LNG gap of around 120 billion cubic meters between 2026 and 2030. The anticipated global LNG expansion wave has been delayed by at least two years.
Europe, Asia, and a Shrinking Pool
Italy accounted for 53 percent of EU imports of Qatari LNG in 2025, followed by Belgium at 19 percent and Poland at 17 percent. These countries now compete with Asian buyers for a smaller global supply.
LNG prices in Asia and Europe are converging well above pre-crisis levels. The market is not resolving the imbalance. It is allocating it. Buyers with deeper pockets and longer-term contracts hold the position. Everyone else adjusts.
The crisis could push the energy transition in two directions simultaneously. Renewables are increasingly seen as providing energy security. The Philippines is accelerating solar deployment. India is fast-tracking permits for wind and batteries. Chinese solar and battery stocks are rising sharply.
On the other side, LNG project financing is growing more difficult as volatility undermines bankability.
The supply vacuum is also reshaping who gets to set the terms. No country has moved faster to claim that position than Turkey. Erdogan has been explicit about his aim to transform Turkey into a global center where the natural gas reference price is determined, positioning the country as an indispensable base for the region’s energy and trade corridors.
At the Antalya Diplomacy Forum last week, attended by leaders from 150 countries, participating countries described the Middle Corridor as the emerging Eurasian alternative to Hormuz. Analysts remain skeptical, Turkey’s hub ambitions for now are more political narrative than commercial reality.
The Fracture
What is visible is a system breaking along lines that were already there. Russia redirects volumes east. China draws on contracts and storage it spent years building.
Europe scrambles. Smaller importers get priced out, not because gas disappeared, but because they can no longer afford the queue.
More than 40 major energy infrastructure assets across the region have been damaged. Even if the attacks stopped today, a return to normal is years away.
The question is no longer whether gas moves. It is who controls the corridors, who had the foresight to lock in supply before March, and who is left chasing spot cargoes on a market with nothing spare.