What appeared in March 2026 as a supply shock in global LNG markets has, by April, evolved into a broader transit disruption affecting the physical movement of gas through the Strait of Hormuz.
Damage to Qatari infrastructure has reduced Qatar’s LNG export capacity by ~17%, tightening global supply, though the global shortfall is smaller and partly offset by other exporters.
The United States has emerged as the primary alternative supplier, while Asia absorbs the most acute impacts and Europe faces growing indirect pressure heading into the refill season.
Key figures at a glance:
>2 bcm/week LNG flows lost from Qatar & UAE
~17% reduction in Qatari LNG exports (~3–5% global impact)
$20bn/yr estimated annual Qatari revenue loss
The Shift: From Supply Shock to Transit Disruption
The global LNG crisis that began in early March with damage to Qatari export facilities has since expanded in scope. While reduced production remains a factor, the more acute challenge is now the ability to physically move cargoes through the Strait of Hormuz.
According to the International Energy Agency, disruptions have reduced LNG flows by an estimated ~2 bcm per week (≈10 Bcf/d equivalent), though this reflects regional export constraints rather than a direct loss of global supply.
LNG Flows:
Export data from Signal Ocean LNG flows indicates that Arabian Gulf exports have fallen sharply to low levels in recent weeks, pointing to a severe disruption in normal trade flows.
AIS Signals:
Vessel tracking data from AXS Marine shows a growing proportion of vessels appear to have AIS signals switched off or potentially spoofed.
Vessels Passing the Strait of Hormuz
Vessel tracking data from AXS Marine shows the disruption is no longer limited to supply availability but extends to the physical movement of cargoes through the corridor. Only one LNG vessel transit was visible in the available AIS dataset during the period of escalation.
Infrastructure Damage and Force Majeure
The supply disruption is compounded by severe damage to Qatar’s export infrastructure. Approximately 17% of Qatar’s LNG export capacity has been affected following damage to liquefaction facilities at Ras Laffan, according to QatarEnergy leadership cited in Reuters. Repair timelines are estimated at three to five years, with potential annual revenue losses of around USD 20 billion.
In response to these conditions, QatarEnergy has declared force majeure on portions of its long-term LNG supply contracts.
According to statements attributed to leadership within the Gas Exporting Countries Forum, a full global gas market recovery could take between six months and one year under stable geopolitical conditions, although such projections remain highly contingent on geopolitical developments.
The United States ad the Primary Balancing Supplier
Following force majeure declarations and cargo cancellations, buyers have increasingly turned to alternative sources. The United States has emerged as the primary balancing supplier, with a current peak export capacity of approximately 18.3 Bcf/d.
Key capacity additions expected to come online or ramp up during 2026 include:
- Corpus Christi Stage 3 (Cheniere Energy)
- Additional Golden Pass LNG trains (QatarEnergy – ExxonMobil joint venture, Sabine Pass, Texas)
- Port Arthur LNG Phase 1
- Rio Grande LNG
The IEA anticipates U.S. LNG export terminals to operate at higher utilisation rates through 2026, driven in part by increased demand for supply that does not rely on transit through Hormuz. Regulatory approvals have further expanded export authorisations at several existing terminals.
Canada is emerging as a new LNG supplier with increasing relevance for Asian markets. Exports from British Columbia began in 2025, with additional projects under development, including Ksi Lisims LNG. Major energy companies, including Shell and TotalEnergies, have already secured supply agreements.
Asia Bears the Brunt
Asia has taken the largest hit from the disruption. Chinese LNG imports in April 2026 are estimated at the lowest level since 2018. Qatari supply has fallen from over 6 million tonnes per month to approximately 0.8 million tonnes, reflecting the near halt of shipments through Hormuz. Chinese traders have responded by reselling cargoes into regional spot markets at elevated prices.
Conditions vary sharply for other Asian markets:
- Pakistan may receive no LNG cargoes in April, with shipments effectively stranded in the Gulf.
- Bangladesh has maintained imports through supplier diversification, despite paying higher spot prices.
- Singapore has secured replacement spot cargoes from Australia and Mozambique.
- Japan faces a potential summer electricity supply crunch as reduced LNG availability weighs on power generation capacity.
- Multiple Southeast Asian utilities are increasing coal burn as a short-term offset to lost gas supply.
Europe: Indirect Exposure and Storage Risk
Europe is less directly exposed to Gulf LNG disruptions but faces growing indirect risks as Asian buyers compete more aggressively for Atlantic Basin and U.S. supply. European policymakers have indicated that no immediate threat to supply security exists, supported by infrastructure diversification undertaken since 2022.
However, the region enters the summer refill season with storage levels estimated at approximately 28-30 percent, with some member states considerably below that level. As Asian buyers seek alternative supply, competition for U.S. LNG intensifies, creating additional pressure on European procurement.European gas storage at approximately 28-30% entering the refill season leaves a limited buffer against further supply disruptions or a prolonged increase in Asian procurement.
Outlook: A more fragile system.
This dynamic is unfolding against a backdrop of persistent geopolitical tensions. Recent U.S.–Iran talks have made limited progress, with negotiations stalled and uncertainty around the Strait of Hormuz continuing to weigh on market stability. Europe remains relatively insulated for now but faces increasing exposure as the refill season approaches, while Asia continues to absorb the most immediate impacts. Near-term LNG flows will remain highly sensitive to any shifts in diplomatic momentum, particularly whether upcoming negotiations lead to a meaningful de-escalation in the region.
Source: AXS marine
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