BAKU, Azerbaijan, October 26. Global importers
of liquefied natural gas (LNG) will spend at least $39 billion more
on purchases in 2026 than had been expected before the conflict in
the Middle East began, despite a 60.7-million-metric-ton decline in
import volumes.
This was reported in a statement by Rystad Energy.
According to the company’s forecast, total spending on LNG
purchases under long-term contracts and on the spot market will
reach $256.3 billion, compared to the $217.8 billion expected
before the conflict began. It is noted that, as a result, costs
will increase by approximately 18%.
"Disruptions to LNG supplies from Qatar and the UAE via the
Strait of Hormuz are forcing buyers to seek alternative fuel
sources and purchase additional volumes at higher prices. Rystad
Energy’s model assumes that LNG supplies from Qatar and the UAE
will be unavailable from March through the end of 2026. Europe will
face the most significant increase in costs among the regions under
consideration. The region’s LNG import costs will rise by at least
$12 billion, or 18%, despite a 24-million-metric-ton decline in
demand.
“Even before the conflict began, Europe was already heavily
reliant on spot market purchases, which limits the potential for a
further increase in their share. Taking into account the decline in
demand, Rystad Energy forecasts that the share of spot purchases in
the region’s LNG imports will increase by only 5.49% compared to
pre-conflict estimates,” the company reports.
In addition, it is emphasized that Europe may fall short of
receiving 20.6 million metric tons out of the 24.7 million metric
tons of LNG from Qatar that had been scheduled for delivery in 2026
prior to the start of the conflict.
"In East Asia, the impact of disruptions will be less pronounced
in relative terms. Spot purchases account for only 14.5% of the
region’s LNG imports. A more diversified mix of contracts with
suppliers outside the Middle East and a decline in demand will help
limit the impact of disruptions.
Despite having the highest nominal dependence on contracted
supplies from Gulf countries, among regions outside the Middle
East, East Asia will face the smallest relative increase in LNG
costs—9.7%. South Asian countries are adapting to the situation
primarily by reducing imports. According to Rystad Energy’s
assessment, Pakistan is cutting its purchases more significantly
than India,” Rystad Energy reports.
According to the company, in Africa and South America, Egypt and
Brazil, respectively, are the main drivers of growth in prices and
import volumes. Middle Eastern countries, in turn, are adapting to
supply disruptions by reducing demand.
"This conflict has affected all participants in the natural gas
market to one degree or another, but not all economies have the
same capacity to mitigate the consequences. Some importers are
better prepared for rising costs, while others have no choice but
to cut back on purchases and accept the economic consequences,” the
senior analyst for gas market and LNG research at Rystad Energy
Christoph Halser said.
According to him, the crisis is exposing vulnerabilities in gas
security. Diversifying price benchmarks helps manage costs but does
not guarantee the physical availability of fuel.
Halser noted that importers need to assess not only price risks
but also their dependence on specific supply sources and
transportation routes. When building contract portfolios, one
should take into account the reliability of delivery and the
existence of demand that is difficult to reduce or replace with
other energy sources.
According to the analyst’s assessment, in a situation where
supplies may suddenly cease, the reliability of supply is no less
important than the price of the gas being purchased.
