In early 2026, before the Iran conflict began, the global gas industry was debating the impact of the impending wave of liquefied natural gas (LNG) supply. With over 320 billion cubic meters (bcm) of LNG export capacity having reached a final investment decision, a massive volume of LNG was expected to hit the market between 2026 and the early 2030s. The core disagreement was whether importing countries – notably China, India, and Southeast Asia – would absorb the new supplies or whether a massive oversupply would send Asian and European gas spot prices from $11/mmBtu down to $6/mmBtu.
The conflict, which erupted in February 2026, fundamentally changed that outlook by abruptly halting LNG supply from Qatar and the United Arab Emirates (UAE), equivalent to around 20% of global LNG supply. Yet, despite this unprecedented shock, the crisis has not triggered price increases comparable to those observed in 2022.
That resilience can be explained first by LNG supply increases from other exporters, such as the United States, Canada, Nigeria, and Malaysia, which partially offset the loss. The second explanation lies in LNG demand adjustments: Asian countries have switched to coal, while some have curtailed gas supplies to industry. Still, across many Asian importers, LNG demand has held up better than expected, even if at a high cost to those countries’ finances. Meanwhile, European storage has dropped to very low levels as a result of declining LNG imports.
Despite the mid-June peace deal, it is likely that global LNG supply will not grow, or will grow only marginally, in 2026 – even in the best-case scenario where LNG supplies from the UAE and the 12 undamaged LNG trains in Qatar are fully back online by late August.
However, the wave of new LNG export projects has not disappeared; if anything, it has inflated. Two new US LNG projects moved forward in May (Commonwealth LNG) and June 2026 (Delphin FLNG 1), while many others in North America, Latin America, Asia, and Africa stand ready to take a final investment decision, as buyers seek to diversify away from the transit risks impacting Qatari and Emirati supplies: for LNG, unlike oil, there is no “Hormuz bypass” that can bring the gas to Asia. That said, the projects under construction in those two countries will still get built, albeit with some delays.
Ultimately, the industry’s debate over long-term LNG demand will return. However, it is worth noting that many importers, especially those exposed to volatile spot LNG supplies, have now been shaken by two gas crises in four years. Many were only just recovering from the first. Lower prices alone may no longer be sufficient to restore importers’ trust: in Southeast Asia, LNG demand growth relies on import infrastructure being built in a timely manner, not to mention getting hold of gas turbines.
The calculus may have shifted. In a world where security of supply is paramount, many countries could keep coal for longer while investing in renewables. Consequently, LNG demand will still grow, but probably less than some buoyant forecasts suggest.
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