Europe is facing a new LNG supply crunch after Qatar, a major global supplier, was forced to halt shipments following the closure of the Strait of Hormuz. Qatar’s reduced exports have pushed Asian LNG prices sharply higher, while Europe enters the winter season with gas storage only 72% full—well below recent averages. A cold winter or prolonged disruption could trigger intense competition with Asia for available cargoes and send prices much higher.
The longer-term outlook is more complicated, the Economist writes. A wave of new LNG projects in the U.S., Canada and other countries could increase global supply by nearly 60% by 2030, potentially creating a large surplus if demand grows more slowly than expected. Buyers and producers are therefore seeking greater flexibility through trading operations, storage and diversified supply contracts. The result could be several years of extreme volatility, with a short-term shortage potentially followed by a major LNG glut.
