Hormuz Crisis Hits Asian LNG Demand

The ongoing crisis in the Strait of Hormuz is casting a shadow over the liquefied natural gas (LNG) market, particularly in Asia. According to analysts at Asia Research & Engagement (ARE), the Philippines is among the countries where demand for LNG is plateauing or contracting.

Six months of disruptions in the Strait have exposed the price and supply risks associated with LNG. In a media statement, ARE said that LNG has been sold to Asian governments and lenders as a secure, reliable, contractible, and insulated from volatility fuel source for two decades. However, this proposition has been put to its first live stress test since February 28, 2026.

The Strait of Hormuz remains effectively closed to LNG traffic, with transits down roughly 95%. More than 25 Gulf energy companies, including QatarEnergy, have declared force majeure. ARE said that lending must now be re-priced around three risks compounding simultaneously for the first time: commercial oversupply, geopolitical chokepoint exposure, and policy-driven demand destruction.

According to IEEFA, 47 proposed LNG-fired power plants worth USD 52 billion have been cancelled, withdrawn, or shown no progress over the last five years in Bangladesh, the Philippines, Thailand, and Vietnam. The experts pointed out that countries like the Philippines and Vietnam have set in-service dates of 2030 or 2031 for LNG-to-power projects, but very few of those projects have secured gas turbines, which now take five to six years to deliver.