The Strait of Hormuz closure pressures LNG spot prices, threatens Northeast Asia demand in Oil & Companies News 16/03/2026 Northeast Asia’s LNG market faces a major supply shock following the closure of the Strait of Hormuz, with regional demand expected to fall by 4-5 million tonnes through Q3 2026 if supply disruptions last for two months, according to new analysis from Wood Mackenzie. The closure has removed 1.5 million tonnes (Mt) per week (2.2 bcm) from global LNG supply, equivalent to 19% of global exports. With around 90% of LNG exports from Qatar and the UAE destined for Asia, the region is most exposed to the disruption. Asian LNG spot prices surge above US$20/mmbtu Wood Mackenzie’s analysis assumes that the conflict will disrupt LNG supply to Asia for around two months, from mid-March to mid-May, with Qatari production gradually ramping back to pre-crisis levels by the end of May. “Asian LNG spot prices have surged above US$20/mmbtu, shifting from a discount to a premium relative to European prices,” said Miaoru Huang, research director, Asia Pacific gas and LNG at Wood Mackenzie. “A sustained premium is needed to draw Atlantic Basin cargoes away from Europe and toward Asia. Current forward curves imply at least a month of disruption, with prices easing from June.” Despite efforts to source additional cargoes, alternative supply sources cannot fully replace Qatari volumes. As a result, demand destruction is likely, particularly through higher coal utilisation in power generation and reduced industrial consumption. April to test LNG market dynamics across Northeast Asia The final Qatari cargoes loaded before the Strait closure are expected to arrive in Asia by mid-March. After that, the region will face a structural supply shortfall due to longer shipping routes from alternative suppliers. Wood Mackenzie expect that Northeast Asian buyers including Japan, South Korea and Taiwan region will look to replace between 70% and 90% of the exposure as they have to LNG imports from Qatar and the UAE. However, Mainland China might only look to replace 50% of their exposure, because of current weak gas demand and leveraging on high inventories and greater fuel switching flexibility across industry and power. “Japan is comparatively well positioned to manage the disruption due to its limited reliance on Qatari supply and recent nuclear restarts,” said Jingxiao Du, senior research analyst, Asia Pacific Gas & LNG Research at Wood Mackenzie. “Utilities can redirect some FOB (Free on Board) cargoes back to the domestic market rather than trading them internationally, while higher nuclear output will help offset LNG demand,” Du continued. As of 1 March, inventories held by Japan’s major power utilities stood at 2.19 Mt, equivalent to around 22 days of supply. South Korea faces greater exposure at elevated prices. “While its LNG stocks provide a temporary buffer, moderate supply gaps and over 20% spot LNG exposure strain power utilities,” said Kai Dong, principal analyst, Asia-Pacific Gas & LNG at Wood Mackenzie. “Coal switching can reduce spot needs. If disruptions exceed two months, South Korea may have to relax seasonal coal curtailments as a contingency measure,” Dong added. Wood Mackenzie previously projected 4.4 Mt (2.2%) growth in Northeast Asian LNG demand in 2026, but the Strait of Hormuz disruption is likely to halt that expansion. “The supply shock will force short-term demand adjustments across the region,” Huang added. “Higher spot