Global LNG markets show resilience despite Qatar supply disruptions

Key takeaways:

• Global LNG trade is more concentrated than oil, with the US, Qatar and Australia together accounting for more than 60% of global LNG trade, meaning even relatively small disruptions to Qatari exports can have significant repercussions across the market.
• Despite disruptions to around 17% of Qatar’s LNG exports and sharp increases in spot prices in Europe and Asia, prices remain far below the record levels reached in 2022 following Russia’s invasion of Ukraine, highlighting the greater flexibility and resilience of today’s LNG market.
• This resilience reflects structural changes rather than luck, including lower gas demand and improved efficiency in Europe, greater fuel switching in Asia, and additional LNG supplies from the US and other producers that have helped compensate for volumes disrupted through the Strait of Hormuz.
• Qatar’s reported purchases of US LNG should not be interpreted as a weakening of its position, as exporters facing temporary supply constraints can purchase cargoes from other suppliers to fulfil commitments under long term contracts.
• Qatar is unlikely to lose its importance in global LNG markets given its vast proven gas reserves, low extraction costs and established LNG infrastructure, while competition between Qatar and the US is expected to intensify as both countries expand export capacity.