Asian LNG Demand Set to Fall for Second Year Amid US-Israeli War Disruption
The war between the US and Iran has disrupted Gulf supplies of liquefied natural gas (LNG), leading to a sharp increase in prices. Asian LNG demand is set to fall for the second consecutive year, with analysts estimating a decline of 3-10% from 2025 levels in 2026.
The decrease in demand is primarily driven by Northeast Asia, where countries such as China and South Korea have seen a reduction in power generation due to lower average temperatures this year. In China, LNG demand is expected to fall by 6.1 million tons year-on-year, with energy-intensive sectors such as ceramics and methanol having to cut output or shut plants due to high fuel costs.
Despite the decline in demand, India and Bangladesh continue to actively secure spot cargoes, demonstrating resilient demand. However, prices are expected to remain well above pre-conflict levels, with Kpler forecasting Asian spot LNG prices to average $19.30/mmBtu this year and $14.90/mmBtu in 2027.