Wood Mackenzie outlined three scenarios for global LNG markets after the Strait of Hormuz closure removed over 80 million metric tons per annum of LNG, equivalent to 20% of global supply, the firm said Tuesday.
Wood Mackenzie said the disruption has created significant uncertainty across global gas markets as buyers, investors and policymakers assess how different conflict outcomes could reshape supply, demand and pricing trends.
"The Strait of Hormuz closure has done more than remove LNG from the market. It has removed certainty," Kateryna Filippenko, Research Director at Wood Mackenzie, said.
She added that volatility is the new baseline, noting that the key question for buyers, investors and policymakers is whether their portfolios and supply strategies are resilient enough to absorb any of the potential scenarios.
Under the scenario of a quick peace deal, undamaged Gulf LNG facilities are expected to resume operations in June 2026 and return to full capacity by 2027, Wood Mackenzie said.
In the scenario where a settlement is expected by summer, delays restarts until September 2026, while producers recover full output only by 2028, extending supply tightness across global LNG markets.
Wood Mackenzie said the scenario of an extended disruption assumes recurring conflict flare-ups and infrastructure damage, preventing Gulf LNG output from returning to pre-war growth expectations.
In that scenario, Qatar's North Field West project remains postponed indefinitely, major developments face multi-year delays, and companies advance no additional pre-final investment decision projects.
Despite risks in the Middle East, LNG supply growth continues elsewhere, with over 150 mtpa under construction outside the Persian Gulf, largely in the United States, Wood Mackenzie said.
Wood Mackenzie said LNG expansion outside the Persian Gulf remains robust, with over 150 mtpa under development and an additional 30 mtpa expected to reach final investment decision by the end of 2027.
LNG demand increases across all three scenarios as Europe and South and Southeast Asia offset declines in domestic production and pipeline imports, though efforts by major importing nations to curb reliance on LNG could yield widely varying demand outcomes over the next decade.
Under the quick-peace scenario, markets start easing in 2028, increasing the risk of US LNG cargo cancellations between 2031 and 2033, while the summer-settlement scenario delays a similar imbalance until 2032 and could extend it through 2034, Wood Mackenzie said.
The extended-disruption scenario keeps markets volatile and supply tight through 2030 before rising LNG output creates oversupply risks, while recovering supply weighs on European and Asian gas prices and pushes US gas prices higher as low-cost associated gas supplies decline.