Asian LNG Demand Slumps Amid Gulf Supply Disruptions

Asian liquefied natural gas (LNG) demand is expected to decline for the second consecutive year, according to analysts reported by Reuters. The drop is estimated at 3% to 10% from 2025 levels, with Northeast Asia accounting for most of the decrease.

The US-Israeli war on Iran, which began on February 28, 2026, has disrupted energy supplies across the Middle East and affected LNG exports from the Gulf, particularly Qatar. This has pushed prices to multi-year highs.

Rystad Energy analyst Lu Ming Pang noted that Northeast Asian markets have reduced LNG consumption by relying more on coal and available nuclear power, depending on their individual power mixes. Lower average temperatures in several months this year also reduced power-generation needs, with South Korea and Japan recording year-on-year declines in power demand and generation.

China is expected to account for a significant share of the decline, with LNG demand forecast to fall by 6.1 million tons (mmt) year-on-year (YoY), according to Kpler. High gas prices have reduced industrial consumption, forcing energy-intensive sectors such as ceramics, methanol, and glass to cut production or shut plants.