Impact of Middle Eastern LNG Disruptions on Global Prices Q1 2026

Short answer (Q1 2026 effect)

Middle Eastern LNG supply disruptions tied to the closure/constraining of the Strait of Hormuz are causing a sharp repricing in global LNG-linked gas benchmarks during Q1 2026—not just a physical shortage, but also a forward-curve reset higher after the disruption began to bite. In the quarter, prompt benchmark prices were pressured upward by ~$3 to $4/MMBtu following the Middle East disruption, with the market still pricing the event as potentially temporary compared with prior shocks like the Russia–Ukraine war. ¹

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What exactly happened in Q1 2026 (supply displacement)

1) Physical loss concentrated in the Middle East transit bottleneck

Management describes the closure of the Strait of Hormuz as a key driver of strain across global energy markets, including LNG. ² They quantify the disruption as follows:

• The industry expected ~40 million tonnes of LNG supply growth coming into the year, but this growth is offset by the halt of Middle East LNG flows through the Strait. ²
• The Strait closure removes ~7 million tonnes of supply each month, with sustained disruption of ~7 million tonnes/month (about 100 cargoes) given constrained tanker/LNG vessel traffic and limited visibility on normalization. ²
• Combined disruptions displaced nearly 8 million tonnes of supply in Q1 alone (including Strait constraints plus other regional outages such as Winter Storm Fern and Australia’s Cyclone Norelle impacting LNG-related processing). ²

2) Europe’s vulnerability also increases competitive pricing pressure

Even though Europe is “relatively less exposed” than Asia to Middle East flows, the disruption contributes to overall tightness—especially because Europe must refill storage after record-low levels. ³ Management states:

• Europe’s storage exiting the winter is near five-year lows, with a deficit of 13.2 bcm (about 10 million tonnes, ~150 cargoes of LNG equivalent) vs the five-year average. ³

This matters for price because Europe’s storage refill needs intensify competition for marginal cargoes from every basin, raising the marginal clearing price. ¹

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How this translated into global LNG prices in Q1 2026

1) Benchmarks started Q1 lower, then repriced higher after the Middle East disruption

Management highlights two price phases in Q1:

• Early Q1 (before disruption impact fully repriced):
  JKM averaged $10.40/MMBtu and TTF $11.60/MMBtu, down roughly 30% and 20% year-over-year, respectively, with the market reflecting expectations of ~40 million tonnes incremental supply entering the market. ¹
• After the Middle East disruption:
  “Prompt pricing and forward curves” moved higher by $3 to $4/MMBtu. ¹

This is a direct indicator that the disruption affected not only spot but also expectations of near-term supply tightness.

2) Curves/seasonality: Henry Hub stayed more stable than JKM/TTF

While JKM/TTF repriced upward, the Henry Hub curve remained relatively flat, described as reinforcing its role as a “stable pricing anchor.” ¹ That implies global prices were not moving uniformly—rather, LNG-linked regional benchmarks that reflect LNG marginal cargo competition (especially Asia/Europe) were more sensitive to the disrupted flows. ¹

3) Asia price relationships shifted sharply (JKM–TTF spread)

Management notes that because most Qatari LNG is sold into Asia, the disruption caused the JKM–TTF spread to flip in a way not seen since 2023, reflecting a strong pull for LNG into Asia and destination reshuffling once shipping constraints started to ease only partially. ²

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Mechanism: why Middle East disruption lifts global LNG prices (as evidenced in the excerpts)

1) Disruption reduces available LNG and forces re-optimization

Management explains that with Straits constrained, ~7 million tonnes/month continues to be disrupted, and the “immediate effect” was sharp repricing across regional gas markets. ² They also emphasize that destination-flexible U.S. cargoes re-optimized toward Asia to capture higher netbacks—i.e., marginal cargo economics shifted, pulling supply into the higher-priced region. ²

2) Short-run competition increases; longer-run pricing reflects expectations of resolution

Despite the repricing, management says the prompt/forward levels “still reflect much lower levels than in 2022,” which they attribute to the market’s expectation the disruption will prove temporary and potentially resolve quickly. ¹ They also state uncertainty remains high and they hope for a swift resolution with limited lasting structural impact. ¹

So, the excerpts support: prices rise in Q1 because of immediate physical losses + margin competition, but the curve is not “destroyed” long-term because the market believes the disruption may normalize before it becomes structural. ¹

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What this implies for the Q1 2026 global LNG price path (directional)

Based on the earnings discussion:

1. Q1 started with moderating benchmark prices, consistent with expectations of incremental supply. ¹
2. As the Middle East disruption impact intensified, prompt and forward curves increased $3–$4/MMBtu, reflecting a new expectation of tighter near-term availability. ¹
3. Regional price divergence increased, especially through the JKM–TTF spread flip, indicating that LNG pricing was strongly re-anchored around Asia demand and Asia-bound supply scarcity. ²

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Bottom line

In Q1 2026, Middle Eastern LNG supply disruptions—centered on the Strait of Hormuz constraining ~7 million tonnes/month and displacing nearly 8 million tonnes in the quarter—caused sharp global LNG repricing: JKM and TTF moved from Q1’s lower benchmark levels to higher prompt/forward curves by roughly $3–$4/MMBtu, while Henry Hub stayed relatively flat and regional spreads (e.g., JKM–TTF) flipped as LNG was pulled toward Asia. ¹²