Global LNG supply bracing for a jolt as supply from West Asia may come to an end in 10 days: Report

A global energy crunch is fast approaching, with countries bracing for a sharp drop in liquefied natural gas (LNG) supplies as shipments from the Gulf near a halt within the next 10 days, according to a report by the Financial Times.

The report said only a handful of final cargoes are still en route after exports from Qatar, which accounts for roughly a fifth of global LNG supply, were disrupted following Iran’s blockade of the Strait of Hormuz and missile strikes on the Ras Laffan processing hub.

Many shipments that had already departed before the conflict are still reaching buyers, delaying the full impact. But once these deliveries are exhausted, import-dependent economies are expected to face immediate shortages and sharply higher prices, the Financial Times reported.

Supply shock already hitting markets

The disruption has already pushed LNG prices significantly higher. According to the Financial Times, Asian benchmark prices have doubled since the conflict began, reaching around $23 per million British thermal units (MMBtu).

Higher shipping costs, driven by longer routes and elevated charter rates, are compounding the pressure on buyers, the report added.

Pakistan among the worst affected

Pakistan is emerging as one of the most vulnerable economies, the Financial Times reported. Nearly 99% of its LNG imports came from Qatar last year, and its last shipments arrived in the early days of the conflict.

Its two LNG terminals have scaled down operations and are expected to stop gas dispatch entirely by the end of the month.

“After that we’ll run dry,” Iqbal Ahmed, chair and chief executive of Pakistan GasPort, told the FT. “We do not know when the next cargo will come in.”

Efforts to secure alternative supplies have so far failed, with offers from Europe, the US, Oman and other regions proving too expensive, according to the report.

Asia braces for shortages

Other Asian economies are also under strain. Bangladesh has introduced gas-rationing measures, including shutting universities, while Taiwan has moved to secure replacement cargoes to avoid immediate disruption.

Even so, risks remain. Kevin Li from the Atlantic Council’s Global Energy Center warned of “severe energy shortages” if the Strait of Hormuz remains closed, according to the Financial Times.

Japan and China are expected to turn to spot markets and alternative fuels such as coal, though buyers are proceeding cautiously.

“Our plan is to buy in the spot market from JKM to cover supplies,” one Japanese LNG trader told the Financial Times.

Long-term damage to the supply

Even if shipping through the Strait of Hormuz resumes, supply constraints are likely to persist due to damage to Qatar’s Ras Laffan facility.

Qatar’s energy minister Saad Al-Kaabi said around 17% of the country’s LNG capacity could remain offline for three to five years.

“This means that we will be compelled to declare force majeure for up to five years on some long-term LNG contracts,” Al-Kaabi said, as quoted by the Financial Times.

A widening global energy risk

With nearly 90% of Gulf LNG exports typically heading to Asia, the disruption is exposing vulnerabilities across global energy supply chains, as per the report.