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Asia-Pacific Needs Grid Flexibility as Middle East Gas Shock Endures, Says Wood Mackenzie

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Supply disruption across the Middle East will inflict a multi-year loss of gas supplies on Asia-Pacific, a situation that demands urgent grid flexibility over imported gas, a Wood Mackenzie report warned on Wednesday.

About 90% of liquefied natural gas normally transiting the Strait of Hormuz flows eastward, leaving the region vulnerable to the removal of roughly 80 million tons per annum, about a fifth of global supply.

The analysis outlined three critical takeaways for regional energy markets.

First, the crunch is not a short-term pricing blip but a multi-year supply loss. Iranian strikes on facilities such as Ras Laffan have inflicted deep damage, implying that reopening the Strait of Hormuz will not restore pre-crisis normalcy.

Second, power grids will be vulnerable in the second half of 2026, with peak cooling loads pushed higher by record temperatures, WoodMac said.

Finally, vulnerability depends entirely on the importance of gas in a country's energy mix and supply diversification efforts, with highly exposed nations facing import costs up to seven times higher than domestic alternatives, it stated.

To hedge against this lasting supply shock, analysts noted that winning markets will prioritize system flexibility and source diversification over trying to procure scarce Gulf gas

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