Friday, 8 May 2026
Global natural gas markets faced significant disruption in the first quarter of 2026 as the conflict in the Middle East and the closure of the Strait of Hormuz triggered supply shortages, higher LNG prices and growing concerns over long-term energy security, according to a new report by Kamco Invest.
The report noted that European natural gas prices rose sharply in March 2026, with average monthly prices increasing by 35.3 percent year-on-year to USD 17.91/MMBtu, the highest level since January 2023. LNG prices in Japan and South Korea also climbed, rising 18.4 percent year-on-year to USD 14.85/MMBtu.
According to the report, the market volatility was largely linked to disruptions caused by the closure of the Strait of Hormuz, which affected around 20 percent of global LNG supplies, particularly exports from Qatar’s Ras Laffan facility. Damage to parts of the facility and force majeure declarations on several LNG delivery contracts have added further uncertainty to the market.
The International Energy Agency estimates that the conflict could result in the loss of around 120 bcm of cumulative LNG supply between 2026 and 2030, equivalent to roughly 15 percent of expected global LNG supply growth over that period.
Global LNG production declined by 8 percent year-on-year in March 2026, mainly due to lower exports from Qatar and the UAE. However, the decline was partly offset by rising LNG production from North America and Africa, including new projects in the United States.
The report highlighted that global LNG imports fell by 1.7 percent year-on-year in March 2026, marking the first annual decline since January 2025. Asian markets were particularly affected, with LNG imports in the region falling to their lowest March level in seven years as buyers prepared for tighter supplies. More than 80 percent of LNG passing through the Strait of Hormuz had previously been destined for Asian markets.
Several Asian countries have reportedly started implementing fuel-switching measures to reduce reliance on natural gas, including increased use of coal for power generation.
Despite the supply shock, the report said US natural gas prices moved in the opposite direction, declining by 26.2 percent year-on-year in March 2026 due to rising inventories and milder weather conditions. US gas production also continued to increase, supported by strong LNG export demand and new export infrastructure.
Global natural gas consumption increased modestly during the first months of 2026, with demand growth recorded in Europe, the Middle East and Asia, while North America saw a decline. EU gas consumption rose by 1 percent year-on-year in the first quarter, supported by colder weather in January, while US consumption fell by 1.6 percent over the same period.
The report also warned that the disruption extends beyond immediate supply shortages. Damage to infrastructure at Qatar’s Ras Laffan complex, including LNG trains and gas-to-liquid facilities, could take between three and five years to repair. Kamco Invest cited estimates suggesting cumulative LNG supply losses from the site could reach between 50 bcm and 90 bcm between 2026 and 2030.
According to the report, around 110 bcm of LNG, representing nearly 20 percent of global LNG trade, passed through the Strait of Hormuz in 2025, underlining the strategic importance of the route for international energy markets.
