LNG Demand Seen Recovering with US-Iran Conflict End
Liquefied natural gas (LNG) demand in China, India, and Pakistan is expected to recover from multi-year lows once the US-Iran conflict ends. Industry executives believe that demand will shift back to LNG as prices normalize and new supply sources are secured.
The Strait of Hormuz plays a crucial role in this dynamic, as roughly one-fifth of global LNG supply passes through it. The conflict has disrupted exports from Qatar and the UAE, sending Asian spot prices soaring from $10 per million British thermal units (BTU) to nearly $30.
Shell estimates that Middle East LNG supply has fallen by approximately 36 million tons since the start of this year. Asia is now competing with Europe for limited supply ahead of winter, and high prices are suppressing demand.
Industry executives, including Deepak Gupta from GAIL India and Masood Nabi from Pakistan LNG, agree that achieving affordable price levels remains the key challenge to reviving demand.