Asian LNG Prices Average 75% Above Pre-War Forecasts Six Months Into Iran Conflict
Six months of Hormuz disruption has driven Asian LNG far beyond pre-war analyst projections, straining European storage ahead of winter and testing cost-sensitive buyers.
Asian spot LNG prices have averaged 75% above pre-war analyst forecasts over the six months to August 2026, according to data published Saturday (2026-08-29), the broadest measure yet of how severely the conflict's impact on gas markets was underestimated before fighting began.6
The divergence extends to Europe. European LNG prices ran 60% above pre-war projections over the same period, reflecting how completely the Strait of Hormuz closure reshaped the global gas market from the moment hostilities began in late February 2026. The JKM benchmark for Asian LNG deliveries was quoted at $23.17 per million British thermal units as of Sunday (2026-08-30), approaching the $25 per million British thermal units that Morgan Stanley forecast for the third and fourth quarters in a note published in early June (2026-06-09), a projection that already implied more than 30% upside to the forward curve at that point.6,1
The proximate cause is Qatar. Before the war, the Gulf state accounted for roughly a fifth of global LNG trade. Over the six months since hostilities began, its exports have fallen by 96%, with Reuters reporting that the Hormuz blockade has brought shipments to an almost total halt, Theins.press reported on Wednesday (2026-08-26). The World Bank's natural gas price index rose 24% in March 2026 alone as the Strait closed — through which roughly one-fifth of the world's LNG normally transits.5,7
U.S. producers have moved aggressively into the supply vacuum. More than 73 million tonnes of American LNG were shipped in the first seven months of 2026, up 23% from a year earlier. Forward LNG prices in Europe and Asia, which together absorb over 80% of U.S. cargoes, have climbed to their highest in more than three years, LSEG data show.4,3
Yet U.S. output has not replaced the full Qatari shortfall. Kpler data showed Qatari flows cut by more than 60% year-on-year, and the regional demand pull has remained intense. China's 30-day moving average for LNG deliveries jumped to 178,000 tonnes per day in early June 2026, the highest since early February 2026 according to Bloomberg estimates, as summer electricity demand in north Asia compounded the supply pressure from the Gulf.3,1
Asia's appetite has come partly at Europe's expense. Asia's LNG imports were on track for a six-month high in July (2026-07-13) while European imports fell to their lowest in nearly two years, Reuters reported. With Qatari force majeure still in place and no restoration timeline on offer, European storage refilling has depended on spot procurement and shorter-haul supplies rather than the contracted Qatari volumes that typically flow through summer.2,5
The TTF front-month settled at €66.79 per megawatt-hour at Sunday's (2026-08-30) European close, far above where the sector had modelled prices when 2026 purchasing agreements were written. The overshoot has complicated hedging strategies and import contracts across the continent.6,3
There has been partial offset from alternative energy sources. Low-carbon generation, including renewables and nuclear, is estimated to have saved importers $36 billion in aggregate between March and August 2026, offsetting a fraction of the $330 billion the conflict has added to global energy import bills, according to Oilprice.com.6
But price tolerance is approaching its limit for some buyers. Reuters columnist Maguire flagged in late August (2026-08-23) that cost-sensitive buyers may pull back purchases if prices hold near current levels, a dynamic that could slow the pace of U.S. export growth that has underpinned the record volumes shipped so far this year. The IEA estimated that roughly a fifth of Middle Eastern refining capacity, totaling some 9.6 million barrels per day, has been knocked out by hostilities, keeping the broader energy supply picture constrained beyond gas alone.3,6
Qatar extending force majeure with no restoration schedule is the variable the market lacks a clean hedge for. If Hormuz reopens and Qatari flows resume at any meaningful scale, the bid underneath JKM and TTF shifts rapidly; if they do not, European storage heading into the fourth quarter remains the exposed position.5,6