IGU Report: Record LNG Trade in 2025 Overshadowed by Middle East Supply Crisis
Global LNG trade hit a record 437 million tons last year, but the International Gas Union warns the Gulf conflict has damaged infrastructure and clouded the outlook for the market's most critical supply corridor.
Global liquefied natural gas trade set a record in 2025, then ran into a war. The International Gas Union's World LNG Report 2026, published on Tuesday (2026-07-07), showed trade volumes reached 437 million tons last year, up 6.3% — the strongest annual expansion since 2022. The report's simultaneous warning about damage to Gulf infrastructure underlines how quickly the supply picture has shifted.6
The Persian Gulf delivers roughly 80% of its LNG output to Asian buyers, making the region's infrastructure the single largest chokepoint in the global gas trade. The Middle East conflict has damaged export facilities, disrupted shipping routes and clouded the outlook for expansion projects that were, until recently, the assumed backbone of long-term supply growth, the IGU said.6,4
Asian spot JKM prices have climbed 62% since the conflict began, while Newcastle physical coal has risen 13% over the same period, according to Reuters data. JKM stood at $16.06 per MMBtu on Tuesday (2026-07-07). The spread between those two numbers has driven a swift and measurable shift in generation fuel use across the region's largest importers.3
Japan and South Korea moved fast toward coal. In April, Japan's coal-fired power supply rose 11.1%, the fastest pace in at least a year, while gas-fired generation fell 12.9% to 16,447 gigawatt-hours, according to the Japanese Electricity Market data cited by Reuters. South Korea's coal-fired output surged 39.7% year over year to 10,733 gigawatt-hours in April, the biggest increase since August 2019, while gas-fired generation dropped 6.4%, Korea Power Exchange data showed.3
China's LNG import trajectory illustrates the volatility. March imports collapsed to 3.5 million tons, down 30% year on year, Kpler data showed. By June (2026-06-02), Bloomberg reported China had recovered to 4.9 million tons, a slight increase on an annual basis — a rebound timed to the start of peak cooling season. Overall Asian imports fell to 21.12 million tons in March, the lowest in seven years, down 4.3% year on year, according to the Gas Exporting Countries Forum.5
The investment pipeline tells its own story. Some 68.4 million tonnes per annum of liquefaction capacity reached final investment decision in 2025, the strongest year for project approvals since 2019, and capping a five-year cycle that approved 206 Mtpa of total new capacity, the IGU said. Most of that committed capacity is not in the Persian Gulf — but the conflict has put around $107 billion of planned regional infrastructure at risk, according to Global Energy Monitor.6,2
Shell, the world's biggest LNG trader, projects global LNG demand will rise 65% by 2050 from 2025 levels, driven by surging appetite in South and Southeast Asia. The company acknowledged in its annual LNG Outlook that this year's growth has been stalled by the Strait of Hormuz crisis. Wood Mackenzie analyst Lucas Schmitt was more direct: "The conflict will significantly reduce Asian LNG demand growth in 2026." One firm has cut its Asian LNG import forecast for the disruption period to approximately five million metric tons from a prior estimate of 12.4 million tons, assuming a two-month supply interruption.6,2
Bangladesh has increased coal-fired generation and expanded coal-based electricity imports in response to the price and availability squeeze, according to government data. The switch has been less voluntary than in Japan or South Korea — Bangladesh lacks the grid flexibility to absorb the cost for long.2
The medium-term supply response is forming outside the Gulf. Some forecasters estimate Australian LNG production could reach 100 million metric tonnes per annum over the next decade, potentially surpassing Qatar. Whether that output comes online fast enough to offset Gulf disruption — and at what delivered cost to Asian buyers — is the arithmetic the market is now working through. Newcastle coal at $119.15 per tonne on Tuesday (2026-07-07) represents the floor price discipline is imposing on that calculation.1