Rystad Energy Sees Limited Long-term Impact On Global LNG Markets Despite Supply Shock

KUALA LUMPUR, March 3 (Bernama) -- Rystad Energy expects the current supply shock to have a limited long-term impact on global gas and liquefied natural gas (LNG) markets, despite an over 52 per cent surge at Europe’s benchmark Title Transfer Facility on March 2, 2026.

The independent research and energy intelligence company said in a statement that this outlook is based on the expectation that the disruption would be temporary and manageable in terms of volumes.

Natural gas prices have increased by over 40 per cent following QatarEnergy’s decision to cease LNG production, combined with operations halted through the Strait of Hormuz, removing significant volumes from the global market as conflict in the Middle East escalates.

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Rystad Energy’s Gas and LNG Research, senior analyst Jan-Eric Fahnrich said, with Qatari LNG output halted and the Strait of Hormuz closed, global LNG supply is set to tighten sharply, a trend already reflected in recent price movements.

He said the scale of lost volumes would depend on the extent of any infrastructure damage, which is still being assessed, and the duration of the Strait’s closure to maritime traffic.

“In a scenario where there is limited or no damage and hostilities subside quickly, leading to a 15-day production halt, we estimate a 4.3 per cent decline in 2026 output, equivalent to around 3.3 million tonnes (mt).

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“A more prolonged disruption could result in 5.6 mt of lost supply, while a full-scale interruption lasting four to five weeks before the Strait reopens to commercial traffic would translate into a loss of 11.2 mt for the full year 2026,” he said.

Fahnrich also said that given the central role of LNG exports in Qatar’s economy and in global trade flows, it expects production to be restored within weeks rather than months.

Should a worst-case scenario manifest, opportunistic producers could bring to market up to 15 mt of incremental LNG, while the reintegration of Russian LNG could yield another 18 mt.

He added that the most affected countries are chiefly price-sensitive, developing economies that are likely to seek refuge in fuel-switching -- favouring thermal coal over similarly affected oil products -- rather than engage in a bidding war.

-- BERNAMA