-- Global LNG supply fell about 20% in Q1 2026 after the Iran war shut the Strait of Hormuz, triggering price shocks across Europe and Asia, the Oxford Institute for Energy Studies strategists said Wednesday.
The disruption largely impacted Asia, as most Persian Gulf exports from Qatar and the UAE are directed there, though price effects were also felt strongly in Europe, OIES said.
Supply flows did not halt immediately, as cargoes shipped before the closure continued arriving through March and early April, delaying the full physical impact on importers.
OIES expects a sharper supply squeeze in April, when the absence of fresh shipments from the Persian Gulf becomes more visible across the global market.
The disruption followed the European Union's move to ban Russian liquefied natural gas from Jan. 1, 2027, and pipeline gas by Nov. 1, 2027, tightening future supply expectations, OIES said.
Even with additional output from North America, the loss of Gulf supply would prevent the market from becoming oversupplied, keeping conditions tighter than previously expected.
Despite higher prices, gas demand in Europe has not declined materially and is likely to remain stable through 2026 due to limited short-term flexibility, except in some commercial use, according to OIES.
Lower gas consumption in the power sector this summer may ease pressure, helping Europe secure an additional 6 billion cubic meters needed to refill storage amid what is expected to be a tighter LNG market, OIES added.
Even if the disruption is short-lived, the price shock and renewed supply concerns are expected to boost interest in alternative energy sources, including low-carbon gases and electrification, particularly in Europe over the medium to longer term, OIES said.