LNG Supply Glut on Track Despite Hormuz Disruption, Consultant Says
New capacity coming online through 2029 dwarfs the volumes disrupted by the US-Iran conflict, a Vienna-based energy consultancy told Montel's Austrian Energy Day.
Just over 3,000 TWh per year of global LNG export capacity is scheduled to come online between 2026 and 2029, a volume large enough that even a prolonged crisis at the Strait of Hormuz has not materially altered the supply glut outlook, Christoph Zehetner, head of consulting at Vienna-based Inercomp, told Montel's Austrian Energy Day on Thursday (2026-09-10).7
Projects expected to reach completion this year alone amount to roughly 965 TWh per year — equivalent to about 80% of Qatar's total export capacity — Zehetner said. The scale of that incoming supply is why the disruption, however severe its near-term effects, has not redrawn the medium-term picture for market balances.7
That assessment lands against a mixed price signal. ICE Endex TTF front-month was up 3.71% to €82.22/MWh on Thursday (2026-09-10), while JKM Asian LNG was flat at $24.68/MMBtu in the same session. Markets appear to be trading near-term tightness, not the multi-year supply curve Zehetner described.7
The Hormuz crisis exposed a structural constraint that LNG markets lacked the pipeline alternatives oil producers could deploy. When the strait closed, there was no equivalent of the Kirkuk-Ceyhan route or Saudi Arabia's East-West pipeline that could reroute volumes around the chokepoint. Oil had options; LNG did not.2
That asymmetry was flagged in late May (2026-05-21) by analysts tracking the early phase of the US-Iran conflict. "LNG has been celebrated for its flexibility," one gas analyst told Montel at that time, but the effective strait closure exposed that flexibility as geographic rather than logistical — cargoes can go anywhere, as long as they can leave.2
Europe compounded the problem by trying to replenish storage while Asian buyers scrambled for alternatives. Some price relief came from demand destruction in Asian countries, which helped limit upward pressure on European hub prices, Seb Kennedy, independent energy analyst at Energy Flux, told Montel.1
In late May (2026-05-28), LSEG senior analyst Wayne Bryan was warning that Europe's gas market was underpricing the supply risk. "The Middle East situation is far from solved, so for me I think the market is underpricing the risk" of a prolonged closure, Bryan told Montel's Swedish Energy Day in Stockholm. He did not expect prices to revisit 2022's record highs, but the caution was pointed.3
The Hormuz strait did eventually reopen. By late June (2026-06-24), the head of the Gas Exporting Countries Forum said natural gas markets were on course to return to balance in the third quarter, assuming the strait remained open. The GECF groups producer countries holding as much as 70% of global natural gas resources.4
But that assumption proved unstable. Pakistan's state LNG importer was urgently seeking an emergency cargo during the week of June 29 (2026-06-29), with offers due the same day, as tanker traffic through the strait remained volatile amid persistent threats and reignited US-Iran tensions. The pattern of brief reopening followed by fresh flare-up and emergency procurement became a recurring feature of the summer.5
The economic collateral has been substantial for countries not directly involved. Kuwait faces an estimated 8% GDP contraction this year because of the conflict, and has been in talks with the UAE and Saudi Arabia to expand regional pipeline networks allowing crude to exit via Fujairah and Red Sea ports rather than Hormuz. That build-out is happening in oil, where pipeline alternatives exist. Gas has no comparable workaround.6
ICE Brent crude front-month was trading at $107.93 per barrel on Thursday (2026-09-10), while NYMEX Henry Hub front-month was slightly lower at $2.83 per million British thermal units — a divergence that reflects US gas isolation from the Atlantic LNG arbitrage rather than any easing of physical tightness in Atlantic Basin markets.
What traders are watching now is whether the 965 TWh of capacity expected this year actually delivers on schedule, given that some projects most exposed to Middle East logistics face the tightest construction timelines. Zehetner's glut forecast assumes capacity comes online broadly as planned. A second sustained closure of the strait before those volumes are fully operational would test that assumption hard.7