(Bloomberg) - A widening Middle East conflict looks set to create the most significant disruption for gas markets since Russia’s invasion of Ukraine upended global trade four years ago.
Iran’s neighbors, like Qatar, are some of the world’s most important producers, and the region is also a vital supply route, with 20% of liquefied natural gas exports traveling through the Strait of Hormuz, a crucial chokepoint for global energy.
LNG trade through the narrow waterway is now all but halted, according to ship-tracking data. Asian buyers — which take roughly a quarter of their LNG from Qatar, the world’s second-largest exporter — have been calling suppliers to check if alternative cargoes are available, according to traders. Egypt, meanwhile, is trying to bring forward shipments, after supplier Israel shuttered some fields.
“Any naval activity in the Straits of Homuz will be particularly bullish, as will any developments with Qatari LNG production,” said Tom Marzec-Manser, director of Europe LNG and gas at Wood Mackenzie.
Russia’s invasion of Ukraine in 2022 created unprecedented turmoil in the international gas trade, cutting Moscow off from its largest export market, fueling volatility and triggering a record spike in prices in Europe and elsewhere.
Asia is particularly vulnerable to similar ripple effects from the Middle East’s worsening crisis. More than four-fifths of Qatar’s LNG was delivered to Asian buyers last year, with China the biggest purchaser, taking almost a third of its imports from the country. India is the second-largest importer.
Shipments to Asia — and the Europe — must pass through the Strait of Hormuz. So far, at least eleven LNG tankers going to or from Qatar have paused voyages to avoid the waterway, according to ship-tracking data.
Smaller exporter UAE also sends its LNG exports through the Strait.
“There is no replacement,” Anne-Sophie Corbeau, a researcher at Columbia University’s Center on Global Energy Policy, said in a post on LinkedIn. “Will prices spike more in Asia or in Europe? Europe is less exposed, but has low storage levels. It also depends on how much is diverted to Asia.”
Qatar exported 82.2 million tons of LNG in 2025. One of the production units at Qatar’s Ras Laffan complex was undergoing planned maintenance as of last week, according to the traders, which will contribute to lower flows. They asked not to be named as they are not authorized to speak to the media.
Nippon Yusen, a major Japanese LNG shipowner and manager, has instructed its affiliated ships to avoid the area around the Strait of Hormuz, according to a company spokesperson. Mitsui OSK Lines, another large Japanese LNG shipowner, has instructed vessels to wait in safe waters, while Kawasaki Kisen Kaisha confirmed it had ordered vessels in the Persian Gulf to stand by.
If the conflict drags on and shipping disruptions continue, risks will grow rapidly for LNG output, which requires steady exports to move fuel through the facility — or risk forcing output cuts.
Chinese importers are among those making last-minute calls this weekend to weigh up alternative supplies if Iranian efforts to curb shipping are sustained, traders said, though QatarEnergy has not delayed any shipments to its buyers. QatarEnergy did not immediately respond to a request for comment outside usual business hours.
Traders in India, Japan and elsewhere are also bracing for higher prices, reversing over a year of relatively subdued rates at a time of ample new supply. And it isn’t just spot prices — long-term LNG contracts are usually linked to crude benchmarks, so an increase in Brent oil will also make gas more expensive for Asian consumers.
“If tensions in the Middle East intensify or become prolonged, restrictions on tanker navigation and other factors could affect supply to Japan,” Jera Co., Japan’s largest LNG buyer, said in a statement. “We will continue to make every effort to secure flexible fuel procurement,” leveraging the capabilities of its trading arm.
Another potential pressure point will be Turkey, which imports pipeline gas from Iran. Like Egypt, the country may be forced to buy more LNG if key flows are curtailed as a result of the ongoing conflict, adding more upward pressure to prices for super-chilled seaborne gas shipments.
Iran exports gas to Turkey via a 9.6 billion cubic meters per year contract, even though actual volumes delivered have recently dipped below those quantities, according to Columbia’s CGEP. Supplies from Tehran made up less than 15% of the country’s gas imports in 2024, according to data from the Oxford Institute for Energy Studies.
By Ruth Liao, Stephen Stapczynski and Salma El Wardany
With assistance from Hideki Suzuki, Natsuko Katsuki, Tsuyoshi Inajima and Shoko Oda
