A Shell executive stated that as of now, the global market has lost approximately 36 million tons of liquefied natural gas (LNG) supply due to the situation in the Middle East.

This shortfall primarily originates from Qatar—prior to the outbreak of conflict, Qatar accounted for about 20% of global LNG supply. However, since the escalation of conflict between Iran and the U.S. and Israel at the end of February, Qatar's exports through the Strait of Hormuz have been largely interrupted. Qatar's energy sector previously announced that about 17% of its production capacity would require years to repair; Shell's CFO had previously revealed that the damaged Pearl GTL facility in Ras Laffan Industrial City is not expected to resume operations until the first quarter of 2027.

The ongoing closure of the Strait of Hormuz since March has resulted in approximately one-fifth of global LNG exports being cut off in recent months. In its latest "LNG Outlook 2026," Shell predicts that if the Strait of Hormuz reopens within the year, global LNG trade volume in 2026 could be roughly on par with 2025 (approximately 422 million tons). However, if the blockade continues, there could be a rare year-on-year contraction in supply, and relevant facilities will require about 6 to 8 weeks to fully restore output after the strait reopens.

Asian buyers have paid a high price to fill the gap—statistics show that since the outbreak of conflict, India, Pakistan, Bangladesh, Thailand, and Vietnam have collectively spent about $7.4 billion on spot LNG purchases, while the same quantity of goods would have only cost about $3.1 billion based on pre-conflict long-term prices. Bangladesh alone has spent over $2 billion to compensate for the shortfall in Qatari supply, with Asian spot LNG prices once exceeding $20 per million British thermal units during the peak of the conflict.

Faced with supply uncertainty, about 80% of LNG buyers have indicated plans to diversify their procurement sources to more regions, with some countries beginning to accelerate the shift to alternative energy sources such as solar, wind, coal, nuclear, and domestically produced natural gas. Analysts warn that this is the second round of geopolitical conflict impacting the region in months, stating, "One geopolitical conflict is bad, but a second becomes a pattern."

The supply gap has forced global LNG traders and buyers to seek alternative sources from non-Middle Eastern regions such as the U.S. and Australia, driving up spot premiums and freight costs. Benefiting from this are suppliers in the U.S. and Australia with idle capacity that can quickly fill the gap, while emerging market buyers in South Asia and Southeast Asia, who have long relied on Qatari long-term supplies and lack bargaining power, are under pressure. Shell, leveraging its extensive global trading network and diversified asset portfolio, recorded its highest quarterly profit of $9.8 billion since the onset of the Russia-Ukraine conflict in the second quarter, demonstrating that leading traders can profit from price differentials amid supply tightness.

Source: Public Information