Hormuz Disruption Slows LNG Trade, But Demand Set to Soar by 2050

A disruption in shipping through the Strait of Hormuz due to the Iran war has stalled global liquefied natural gas trade for this year, according to Shell's annual LNG outlook. The conflict has shut down around one-fifth of global monthly LNG supply since its start.

Despite this setback, Shell expects growth to resume in 2027 and demand to rise sharply by 2050, driven largely by Asia as countries seek lower-emission alternatives to coal.

Global demand is expected to reach nearly 700 million metric tons a year by that date, the world's largest trader of the superchilled fuel said. In fact, South and Southeast Asia will account for around 40% of global LNG imports by 2050 as countries seek lower-emission alternatives to coal.

The company noted that recent growth in LNG supply and regasification infrastructure had improved market resilience and helped limit the impact of the disruption to shipping through Hormuz. The U.S.-Israeli war on Iran has disrupted the global LNG outlook, driving up prices and damaging Qatar's export facilities.