Iran Conflict Disrupts Global LNG Supply

Significant volatility continues to permeate energy markets as a result of the ongoing conflict in the Middle East. Due to attacks on commercial vessels in the Persian Gulf and surrounding waters, maritime traffic through the Strait of Hormuz, which connects Qatari and UAE LNG exports to global demand centers, has been severely disrupted. Compounding the situation, QatarEnergy officially halted LNG production on March 2^nd due to attacks on its facilities in Ras Laffan Industrial City and Mesaieed Industrial City in Qatar.

Persian Gulf LNG Supply & Demand

Global LNG supply was around 60 Bcf/d in 2025. The Persian Gulf accounted for almost 20% of this supply, making it a critical region for global LNG balances. Currently, the Persian Gulf holds nearly 11 Bcf/d of LNG export capacity, with Qatar accounting for approximately 10.3 Bcf/d. This makes the country the third largest LNG exporter by capacity globally. According to EIA data, an average of 10 Bcf/d of LNG exited the Strait of Hormuz from 2020 to 2024, with 76% of these volumes going to Asian countries. Of this 10 Bcf/d, 17% went to China, 16% to India, and 12% to South Korea.

Global Pricing Shifts

With 10 Bcf/d of supply no longer reaching the market, international natural gas prices have surged. As of March 3^rd, JKM and TTF daily spot prices have jumped by 20% and 27%, respectively, when compared to a week prior. This upward trend is also evident in the forward curve, with the May contract now trading 90% higher for JKM and 120% higher for TTF compared to the February 2026 daily historical average.

U.S. LNG Impacts

Despite these increases in international pricing, Henry Hub forward pricing has had minimal upward movement since last week. Currently, U.S. LNG has maintained over 90% utilization since the start of winter. With little room to increase flows to existing U.S. facilities, there is limited upside to U.S. feedgas demand. LNG feedgas demand in the U.S. has averaged 19.7 Bcf/d in February, and as of March 4^th, there has not been material upward movement in flows.

European Storage

European storage inventories are now 44% below the five-year average, approaching the levels seen in 2022 when Russia sharply reduced gas flows to Europe. This led to a period of heightened energy price volatility and raised concerns over supply security across the region. Since then, Europe has taken steps to mitigate gas supply risks by increasing LNG imports. However, this greater reliance on LNG has exposed Europe to new vulnerabilities from the global market. Now that transit through the Strait of Hormuz has become severely disrupted and LNG volumes in the Gulf are prevented from being exported, Europe’s natural gas supply is once again at risk. If maritime trade through the Strait is interrupted for an extended period, European natural gas prices will likely remain elevated, as the region will have to compete for limited LNG supplies elsewhere.

Going forward

The ongoing conflict in the Middle East has put significant pressure on global energy markets. The disruption of maritime trade through the Strait of Hormuz has resulted in a 10-Bcf/d reduction in global LNG supply and a significant increase to benchmark natural gas prices, particularly TTF and JKM. With European inventories already undersupplied, a prolonged disruption in the Strait of Hormuz could leave the market severely short, forcing Asian and European markets to compete for limited available supply. And lastly, with U.S. LNG facilities already facing high utilizations, there is little opportunity for additional volumes to be exported from existing infrastructure in the United States.

For more coverage of key commodity price movements in the region, check out FactSet’s new Middle East Risk Monitor, now available in the FactSet Workstation. Also, be sure to register for FactSet’s upcoming webinar in which members of the FactSet Energy team will address a host of issues currently facing global energy markets, including the ongoing Middle East conflict and the difficulties facing transmission buildout amid growing electricity demand in the United States.

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