Iran Crisis Threatens Worst Disruption in Gas Markets Since 2022

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(Bloomberg) — A widening Middle East conflict looks set to create the most significant disruption for gas markets since Russia’s invasion of Ukraine upended global trade four years ago.

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Iran’s neighbors, like Qatar, are some of the world’s most important suppliers, and the region is also a vital supply route, with 20% of liquefied natural gas exports traveling through the Strait of Hormuz, a crucial chokepoint for global energy.

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LNG trade through the narrow waterway is now all but halted, according to ship-tracking data. Asian buyers — which take roughly a quarter of their LNG from Qatar, the world’s second-largest exporter — have been calling suppliers to check if alternative cargoes are available, according to traders. Egypt, meanwhile, is trying to bring forward shipments, after supplier Israel shuttered some fields.

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“Any naval activity in the Straits of Homuz will be particularly bullish, as will any developments with Qatari LNG production,” said Tom Marzec-Manser, director of Europe LNG and gas at Wood Mackenzie.

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Russia’s invasion of Ukraine in 2022 created unprecedented turmoil in the international gas trade, cutting Moscow off from its largest export market, fueling volatility and triggering a record spike in prices in Europe and elsewhere.

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Asia is particularly vulnerable to similar ripple effects from the Middle East’s worsening crisis. More than four-fifths of Qatar’s LNG was delivered to Asian buyers last year, with China the biggest purchaser, taking almost a third of its imports from the country. India is the second-largest importer.

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Shipments to Asia — and the Europe — must pass through the Strait of Hormuz. So far, at least eleven LNG tankers going to or from Qatar have paused voyages to avoid the waterway, according to ship-tracking data. 

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Smaller exporter UAE also sends its LNG exports through the Strait.

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“There is no replacement,” Anne-Sophie Corbeau, a researcher at Columbia University’s Center on Global Energy Policy, said in a post on LinkedIn.  “Will prices spike more in Asia or in Europe? Europe is less exposed, but has low storage levels. It also depends on how much is diverted to Asia.”

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Qatar exported 82.2 million tons of LNG in 2025. One of the production units at Qatar’s Ras Laffan complex was undergoing planned maintenance as of last week, according to the traders, which will contribute to lower flows. They asked not to be named as they are not authorized to speak to the media.

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Nippon Yusen, a major Japanese LNG shipowner and manager, has instructed its affiliated ships to avoid the area around the Strait of Hormuz, according to a company spokesperson. Mitsui OSK Lines, another large Japanese LNG shipowner, has instructed vessels to wait in safe waters, while Kawasaki Kisen Kaisha confirmed it had ordered vessels in the Persian Gulf to stand by.