Asia’s LNG supply in turmoil as Qatar halts output

Asia’s long‑standing dominance as the world’s largest liquefied natural gas (LNG) market is under severe strain after shock shutdowns at Qatar’s LNG facilities and regional maritime disruptions have effectively cut off up to 90% of Qatari and Emirati LNG supplies, triggering frantic cargo diversions, price volatility and renewed competition for scarce volumes.

The crisis began on March 2 when Iranian drone strikes hit major LNG infrastructure in Qatar’s Ras Laffan Industrial City and Mesaieed Industrial City, prompting QatarEnergy to announce a complete halt to LNG production and declare force majeure on all exports.

Traders handling Qatari cargoes quickly followed suit, issuing their own force majeure notices on deliveries — many bound for Asian buyers. The disruption has sent shockwaves through global gas markets, Oilprice.com notes, given Asia’s heavy reliance on Gulf supply. oilprices.com reported that this dramatic turn has left buyers scrambling for replacements.

With traditional Gulf volumes offline, alternative supplies were redirected to Asia. At least nine U.S. Gulf Coast LNG cargoes, originally aimed at Europe, have been rerouted to Asian ports as buyers chase higher spot prices. Bloomberg data cited by Oilprice.com suggests that more diversions are likely, as U.S. producers find Asian pricing more attractive until European demand pushes prices higher there. The result: a scramble as Asian importers attempt to secure shipments for April and even May deliveries.

The impact is uneven across the region. Nations including Taiwan, Thailand, South Korea and Bangladesh are aggressively seeking additional cargoes to cover potentially months of supply gaps; some have already secured deliveries for the near term, oilprices.com noted. India’s efforts, however, have been less successful. GAIL, India’s state energy company, reportedly managed to secure only a single LNG cargo for March delivery after repeated attempts to lock in alternative shipments.

Market analysts cited in the report warn the disruption could persist for weeks — possibly months — even if hostilities in the region were to cease immediately. Qatar’s energy minister has acknowledged that restoring operations at Ras Laffan could take “weeks to months,” and independent observers estimate a minimum disruption window of four to six weeks.

For context, Qatar exported 81 million tons of LNG in 2025 while the United Arab Emirates added another 5 million tons, with roughly 90% of these volumes destined for Asian markets. That concentration of supply, once justified by long‑term contracts and economic logic, now presents a glaring vulnerability as geopolitical risks materialize. oilprices.com argues that this is a far deeper shock than the supply squeeze seen during the 2022 market upheaval, given that roughly a fifth of global LNG capacity is currently offline.

Competing demand between Asia and Europe is also reshaping cargo flows — but not in the predictable way. European gas prices have risen sharply, approaching 70 euros per megawatt‑hour, about double pre‑war levels, according to oilprices.com.

Yet the European appetite for spot LNG has been muted by ample availability of U.S. cargoes and the deterrent effect of upcoming EU methane regulations that could penalize imports of non‑compliant LNG. That has, counterintuitively, eased some pressure on Asian buyers.

Still, with tankers favoring the more lucrative European market as prices climb, analysts warn that competition for LNG is likely to intensify — unless Asian nations revert to cheaper, dirtier fuel options such as coal, replicating strategies from previous price spikes rather than risking prolonged energy shortfalls.

By Sabina Mammadli