Asian LNG Demand Slumps Amid Gulf Region Supply Crunch

The Asian liquefied natural gas (LNG) market is facing a decline in demand this year, according to industry insiders. The supply constraints from the Gulf region, driven by Middle East conflicts, have tightened the market and sent LNG prices soaring to multi-year highs. As a result, analysts project that Asian LNG demand will fall by 3% to 10% compared to 2025 levels.

The contraction in demand is concentrated primarily in Northeast Asia, where nations possess coal resources and can utilize nuclear energy to some extent. Pan Rumin, an analyst at Rystad Energy, noted that these countries have successfully reduced their reliance on LNG despite differences in their respective energy mixes.

Nelson Sion, an analyst at Kpler, pointed out that energy-intensive industries are struggling to remain profitable due to skyrocketing fuel costs. These sectors have been forced to cut production or shut down plants, contributing to the suppression of LNG demand.