BAKU, Azerbaijan, October 20. Prolonged
disruptions to liquefied natural gas (LNG) shipments through the
Strait of Hormuz could lead to a decline in global LNG imports and
keep gas prices high through 2028.


This was stated in a report by the Oxford Institute for Energy
Studies (OIES) titled “What Next for Hormuz LNG? Alternative
Scenarios.”


According to the report, the potential for increasing LNG supply
is limited by high utilization rates of gas liquefaction capacity.
Specifically, in the United States in 2026, this figure regularly
exceeded design capacity, while utilization rates in other
countries also remained high.


“Amid competition with Asian importers for LNG shipments, high
prices could lead to a decline in gas demand in Europe and a
reduction in injection volumes into underground storage facilities.
This could complicate preparations for the 2027/2028 winter season,
especially if stockpiling begins from a lower level.


In South Asia, high prices could lead to a reduction in gas
imports, as gas will become too expensive for a number of
countries. At the same time, importers in North Asia are largely
shielded from the effects of reduced supplies thanks to their
ability to purchase LNG at higher prices.







The duration of disruptions and the timing of their occurrence
may be more significant for the market than the initial scale of
the supply reduction. In particular, the situation in Europe will
depend on gas inventory management policies and the timeline for
replenishing those inventories.


Furthermore, the ability of price-sensitive emerging markets to
switch to other fuels or reduce gas consumption will determine how
effectively the global market can mitigate the impact of the
disruptions,” the report states.


As noted in the study, the market implications will depend on
the duration of the LNG supply disruptions. If they end in a few
months, the situation will differ from a scenario involving a
prolonged supply disruption.


“Although prices may spike sharply in the initial stage in both
cases, only protracted disruptions are likely to keep them at high
levels through 2028,” the report states.