War damage and cyclone knock out 30% of global LNG supply

Monday 30 March 2026 - 16:45

By: Dakir Madiha

War damage and cyclone knock out 30% of global LNG supply

Asian countries are confronting a worsening energy crisis as two simultaneous disruptions have removed roughly 30% of global liquefied natural gas supply from the market, according to the Australian Financial Review.

The crisis began on March 2, when Iranian drone strikes hit the industrial cities of Ras Laffan and Mesaieed in Qatar, forcing state energy company QatarEnergy to halt all LNG production and declare force majeure on exports. A second wave of Iranian missile strikes on March 18 and 19 inflicted damage that QatarEnergy minister Saad Sherida Al-Kaabi described as having reduced the country's LNG export capacity by 17%, destroying two production trains with a combined capacity of 12.8 million tons per year. Al-Kaabi estimated annual revenue losses at $20 billion and warned that repairs could take up to five years.

Qatar accounts for nearly 20% of global LNG supply, with more than 80% of its exports directed to Asia. The attacks followed Israeli strikes on Iran's South Pars gas field and effectively paralyzed tanker traffic through the Strait of Hormuz, through which a fifth of the world's LNG normally flows.

Before Asian buyers could adjust, Tropical Cyclone Narelle, a category 3 storm, struck Western Australia's Pilbara coast between March 25 and 27, forcing the shutdown of three LNG facilities that together supply around 8% of global output. Chevron confirmed its Gorgon and Wheatstone operations had been taken offline, while Woodside reported ongoing production disruptions at its Karratha gas plant, which processes gas from the North West Shelf project. As of March 29, Chevron said it was working to restore production at both sites, and Woodside indicated it had begun remobilizing offshore crews but could not yet provide a restart timeline. The affected projects account for close to two-thirds of Western Australia's domestic gas supply, according to ABC News.

Asian spot LNG prices have surged from around $10 per million British thermal units before the conflict to more than $20, according to Wood Mackenzie, shifting from a discount to a premium relative to European prices. The Japan-Korea Marker benchmark reached $25 per MMBtu in early March, its highest level in three years, according to S&P Global Platts data cited by Reuters.

Goldman Sachs raised its energy price forecasts, calling the Hormuz disruption the largest supply shock in the history of global crude oil markets. Rystad Energy projects Asian spot LNG prices will average $14 per MMBtu in 2026, a 40% increase from pre-crisis levels, with a prolonged Hormuz closure potentially pushing prices toward $30. BMI analyst Darren Tay warned that Asia is dangerously close to missing a critical window for LNG deliveries.

Relief is unlikely to arrive quickly. Although North American LNG export capacity is on track to more than double by 2029, according to the U.S. Energy Information Administration, most new projects are not expected to begin operations before 2027 or 2028. Until then, Asian importers face a market where the supply buffer analysts had anticipated for 2026 has been erased by war and extreme weather.