Global "gas war" heats up: LNG supply diverted to Asia, buyers trapped in a "high price no market" dilemma.

The global liquefied natural gas (LNG) battle triggered by the Middle East conflict is beginning to change the actual supply flow, with more LNG originally destined for Europe now being redirected towards Asia. Ship tracking data shows that at least eight batches of goods originally intended for Europe have been rerouted to Asia since the conflict erupted, and this trend has been intensifying in recent days. Backup supplies are rapidly depleting, which will lead to increased competition between the two regions and rising prices. The conflict has led to the shutdown of Qatar's Ras Laffan LNG export facility (the world's largest LNG export facility), and shipping in the Strait of Hormuz has also come to a halt. Based on production data for 2025, each day of interruption is equivalent to three Qatari LNG cargoes that cannot be exported. A smaller LNG export plant in Abu Dhabi is also unable to ship goods. All these shutdowns amount to around 20% of the global LNG supply. Rystad Energy analyst Mathieu Utting stated, "If this situation continues for several months, or even drags on into the summer, there will not be enough alternative LNG sources to adequately supply the global market. The other major LNG supply countries, the United States and Australia, are currently operating at full capacity with little room for increased production." For Europe, with winter stocks nearly depleted, there is an urgent need to replenish LNG supplies. In some parts of Asia, temperatures are expected to be higher than usual in the coming months, leading to increased use of air conditioning. Over the past week, LNG prices in both regions have skyrocketed, sparking concerns about inflation pressures and economic impacts. Bidding War Buyers in India, Bangladesh, and Thailand have turned to the spot market to supplement supplies, but challenges are beginning to emerge, as some recent tenders for March delivery, including bids from India, have failed to be awarded due to a lack of sellers and high prices. Data shows that global LNG imports last week totaled 8 million tons, a 26% decrease from the previous week. Meanwhile, LNG supply decreased by 16%. As the world's largest LNG producer, the United States is unlikely to fill this gap in the short term. Although several facilities are under construction in the U.S., capacity will be gradually brought online. The Golden Pass project in Texas, a joint venture between Qatar and ExxonMobil, is nearing completion but has yet to start production. Cheniere Energy's factory in Corpus Christi, Texas, is gradually increasing capacity, and Venture Global is boosting capacity at its Plaquemines plant in Louisiana while constructing a third facility, CP2. The current situation has reduced the possibility of the long-awaited oversupply of LNG occurring this year. Morgan Stanley analyst Devin McDermott stated in a report that if Qatar's LNG supply interruption lasts over a month, it "will rapidly lead to a shortage of supply", whereas the bank had previously predicted an oversupply of 6 to 8 million tons of LNG this year. Florence Schmit, energy strategist at ING Bank, shares a similar view. She stated that for every week that Qatar's LNG production is halted, an expected surplus of 1.5 million tons will decrease, meaning the market will need around five weeks to see a supply shortage. Qatar Energy's decision to delay the start of a major expansion project will also have an impact on oil supply in 2026. Schmit said, "Even with an increase in U.S. natural gas transport capacity, the market is currently facing a supply shortage. The oversupply of LNG has been delayed by a year."