Shell Projects 65% LNG Demand Rise by 2050 as Hormuz Crisis Stalls This Year's Growth
The world's top LNG trader forecasts a near-700-million-ton market by mid-century but warns the Strait of Hormuz closure has already suppressed 2026 volumes.
Shell, the world's biggest LNG trader, published its annual market outlook on Monday (2026-06-30), projecting that global LNG demand will climb to nearly 700 million tons annually by 2050, a 65% increase from last year's traded volume of 422 million tons. Surging gas demand across South and Southeast Asia is the primary engine behind that forecast.6
The report landed against an awkward backdrop. Growth this year has been stalled by the effective closure of the Strait of Hormuz, the narrow waterway through which a significant share of Qatari and regional LNG volumes transit. Shell's own LNG sales rose 11% to 72.9 million metric tons last year — but that momentum has run into a constraint it cannot easily route around.6
LNG has no pipeline fallback. For crude oil, producers facing Hormuz disruptions can, in principle, redirect flows through overland routes or alternative export terminals. Gas analysts told Montel on Thursday (2026-05-21) that LNG offers no such flexibility: volumes either move by tanker through the strait or not at all. The disruption is, in that sense, more structurally damaging for gas than for oil.2
That constraint is showing up in trade data. Qatar's LNG shipments to Japan fell 73.8% to just 253,000 tonnes in September, with Malaysian and Indonesian volumes filling part of the gap, rising 60.9% to 1.50 million tonnes over the same period, according to Japan's Ministry of Finance provisional data. Japan's overall LNG imports declined 1.6% year-on-year in September to 5.32 million tonnes. The import bill, however, jumped 164.2% to $5.85 billion, a measure of how far spot prices moved to clear the shortfall.3
The duration of the disruption remains the sharpest point of contention. A Poten & Partners executive told Montel on Wednesday (2026-05-20) that the impact on LNG supply could persist until 2028, even if a resolution came soon. Markets would need time to rebuild confidence in transit routes, rebook cargoes, and restore contract flows that buyers have sourced elsewhere under duress. That is not a short cycle.5
JKM, the spot benchmark for Asian LNG delivered ex-ship to Northeast Asia, was at $16.02 as of Thursday (2026-07-02). Contrarian signals on JKM are running bullish against a broader bearish consensus, with supply-side disruption factors still exerting upward pressure on the benchmark even as overall market sentiment tilts the other way.6
ICE Endex TTF front-month gas was up 5.0% to €44.18 on Thursday (2026-07-02), a move that reflects Europe's sensitivity to broader LNG availability even when the direct Qatari supply disruption falls primarily on Asian buyers. The transmission mechanism is cargo diversion: when Northeast Asian importers scramble for non-Qatari LNG, they bid harder for Atlantic Basin cargoes, tightening supply for European buyers who compete for the same vessels and flexible US volumes.2
On Thursday (2026-05-21), vessel-tracking data from Kpler showed a non-laden LNG carrier — the Panama-flagged Sohar LNG, owned by Muscat-based Oman Shipping — edging toward the Hormuz strait along the Omani coastline, a potential first west-east passage by an unladen vessel since the start of the Iran war. Whether laden carriers follow will determine how quickly the supply chain begins to normalise.1
The EIA's May Short-Term Energy Outlook assessed that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar, and Bahrain collectively shut in 10.5 million barrels per day of crude — underscoring the scale of the regional disruption. LNG, moving in dedicated carrier fleets rather than shared tanker pools, faces its own distinct set of transit economics and does not benefit from the crude oil market's greater routing flexibility.4
Shell's long-term demand case rests on Asian market development outrunning the current setback. South and Southeast Asian industrial growth and power sector expansion are the structural pillars. The Hormuz disruption may eventually accelerate investment in alternative supply routes and floating regasification capacity in affected markets. For buyers locked into existing contracts, 2026 remains a year of elevated costs and constrained options regardless.
The immediate market signal will come from whether the Sohar LNG or a subsequent laden vessel completes a Hormuz crossing without incident, and how quickly Qatar signals renewed export volumes. Until then, the spread between JKM spot and longer-dated Asian contract prices will carry the market's assessment of how much of the supply gap is a deferral and how much becomes a structural shift in sourcing patterns.1