LNG Market Exposed: Strait of Hormuz Vulnerability Threatens Global Energy Security

The global liquefied natural gas (LNG) market is facing significant challenges due to supply and infrastructure constraints, according to a report by the International Energy Forum (IEF). The report states that despite the growth of LNG trade, which has increased by more than four times since 2000, from 133 billion cubic meters (bcm) to over 600 bcm expected in 2026, the market is still vulnerable to disruptions.

The report highlights that the Strait of Hormuz, a major waterway, accounts for almost 20% of LNG trade and has been identified as a significant vulnerability. In 2024, around 75% of India's LNG imports, 87% of Pakistan's, and 71% of Bangladesh's were sourced through this route.

The report also notes that the concentration of supply among major exporters such as the US, Australia, and Qatar poses a risk to global energy security. The three countries accounted for almost 64% of global exports in 2024 and are expected to provide approximately two-thirds of global supply through 2031.

To address these challenges, the report calls for investment across the entire supply chain, including production, storage, shipping, ports, regasification terminals, and pipelines. It also emphasizes the need for greater diversification of supply relationships, flexible contracts, and shipping arrangements, as well as improved market information and stronger international cooperation.

Christof van Agt Ross, Director of Energy Dialogue at the IEF, noted that 'The LNG market is global, but disruptions affect regions differently. The 2026 Hormuz disruption creates strong price responses in Europe and Asia, while developing economies are often priced out of the market.'