Global liquefied natural gas (LNG) trade is expected to remain flat in 2026 due to ongoing disruptions in the Strait of Hormuz, according to Shell's latest annual outlook. This stagnation comes despite robust long-term demand projections, particularly from Asian markets, which are increasingly exploring alternative fuel sources amid elevated spot prices.
The current geopolitical tensions impacting the Strait of Hormuz have significantly reshaped the short-term LNG market, leading to reduced supply from Qatar, delayed projects, and higher prices. This situation is compelling price-sensitive Asian buyers to reconsider their energy mix, making the immediate future of regional LNG imports highly uncertain even as long-term growth remains forecast.
Executive Summary
Shell's 2026 LNG outlook indicates a stalled global LNG trade this year, primarily driven by severe disruptions in the Strait of Hormuz, which have removed approximately one-fifth of global monthly LNG supply. Asian LNG imports saw a nearly 4% decline in the first half of 2026, totaling 127.70 million tonnes, as elevated spot prices above $20/mmBtu pushed South and Southeast Asian buyers towards domestic gas and coal. While China's overall gas demand is growing, its LNG imports are expected to moderate due to altered supply patterns from the Hormuz crisis, contrasting with new demand drivers like data centers in developed Asian markets such as Japan.
What Happened
Since the start of the Iran conflict, severe disruption to tanker traffic through the Strait of Hormuz has impacted global LNG supply. This has led to damaged export facilities in Qatar and delays in new production projects. Consequently, Asian LNG imports declined by almost 4% year-on-year during the first half of 2026, according to Kpler data.
Key Developments
- Stalled Global Trade: Global LNG trade is projected to remain flat in 2026 if Hormuz shipping normalizes within three months, after reaching 422 million tonnes in 2025.
- Asian Import Decline: Asian LNG imports fell by nearly 4% in H1 2026 to 127.70 million tonnes, driven by high prices and supply uncertainty.
- Robust Long-Term Demand: South and Southeast Asia are forecast to account for roughly 40% of global LNG imports by 2050, requiring 300 million tonnes annually.
Regional Context
The ongoing conflict impacting the Strait of Hormuz, a critical chokepoint for Middle Eastern energy exports, has directly constrained LNG supply to Asia. This regional instability forces Asian economies, particularly price-sensitive buyers in South and Southeast Asia, to navigate a volatile market and reassess their energy security strategies.
Market Impact
Traders face heightened volatility and uncertainty in LNG spot markets, with prices fluctuating significantly. Refiners and industrial consumers in Asia are diversifying their fuel sources, increasing reliance on domestic gas and coal to mitigate high LNG costs. Analysts will closely monitor the pace of Hormuz normalization and the commissioning of new liquefaction capacity for signs of market rebalancing.
Outlook
While short-term trade remains challenged, the global LNG market is expected to resume growth in 2027, boosted by approximately 180 million metric tons of new export capacity by 2030. Asia's long-term demand trajectory remains robust, driven by energy transition goals and rising electricity consumption from new sectors like AI data centers.
