Inpex Strike Escalation at Ichthys LNG Adds to Asian Supply Strain
Workers extended daily stoppages to eight hours from June 11 at Japan's 9.3 mtpa Ichthys plant, compounding disruption from the Hormuz closure.
Workers at Inpex Corporation's Australian LNG sites voted on June 8 (2026-06-08) to double their daily work stoppages from four hours to eight hours across all three facilities, with the escalation taking effect from June 11 (2026-06-11). The action targets Ichthys LNG, a project with a nameplate capacity of 9.3 million tonnes per annum — Inpex's flagship Australian asset and a significant source of supply for Japanese buyers.6
The vote landed at a delicate moment for regional supply. Asian LNG spot prices have risen roughly 75% since the United States and Israel began military action against Iran at the end of February 2026, according to oilprice.com reporting. JKM spot stood at $16.53 per million British thermal units as of Tuesday (2026-07-14), a level that reflects a market reshaped around sustained supply disruption rather than a short-term spike.6
Japan absorbs more Australian LNG than any other buyer. Imports from Australia rose 4.7% year-on-year to 22.2 million tonnes in 2025, even as Australia's total seaborne LNG exports fell to 65.8 million tonnes — down from 67.7 million tonnes a year earlier — according to LSEG data. Any interruption to Ichthys output hits the buyer least able to substitute quickly.1
The broader supply backdrop is Qatar. The Strait of Hormuz has been closed to commercial LNG tanker traffic since February 28 (2026-02-28), and QatarEnergy estimates damage to the Ras Laffan complex, the world's largest single LNG-producing facility, will cost roughly $20 billion per year in lost revenue and take up to five years to restore. That estimate has no parallel in peacetime LNG market history.6,5
Australia was positioned to offset some of that loss. But LSEG data show its monthly output has been locked in a narrow band of 6.2 to 7.2 million tonnes, with no structural growth despite sustained regional demand. The US and Qatar had already outpaced Australia in expanding global market share before the Hormuz disruption changed the calculus entirely.1
South Korea illustrated what squeezed supply looks like on the demand side. Korean imports of Australian LNG rose 28% year-on-year to a record 12.5 million tonnes in 2025, reflecting frantic spot-buying as Middle East volumes dried up. That pace of growth cannot continue if Australia's production range remains this narrow.1
Some demand is now shifting away from LNG entirely. Asian utilities have increased coal burn, and Bangladesh has ramped coal-fired generation and electricity imports, according to government data. Lucas Schmitt, an analyst at Wood Mackenzie, said the conflict "will significantly reduce Asian LNG demand growth in 2026." One consultancy has cut its estimate for Asian LNG imports to roughly five million metric tonnes from 12.4 million tonnes, based on a two-month Middle East supply disruption scenario.3
Demand destruction at these price levels creates a natural ceiling. Buyers with discretionary gas exposure have already switched fuels where possible, which limits the marginal bid for additional spot LNG. That is the fundamental counterweight to further price gains, not a resolution of the underlying supply shortfall.3
ICE Endex TTF front-month climbed 0.54% to €53.87 per megawatt-hour on Tuesday (2026-07-14), maintaining its level above €50 as the Hormuz situation remains unresolved. Europe draws roughly 25% of its gas supply from LNG, according to Chris Wheaton, oil and gas analyst at Stifel, which means Asian spot market moves now transmit to the European benchmark more quickly than they did before the closure tightened the global balance.4,5
Australia and Japan signed a bilateral energy cooperation agreement on May 19 (2026-05-19), covering LNG supply chains and critical minerals. What that agreement cannot accelerate is Australia's plateau output — LSEG data show production range-bound, with no near-term pipeline capacity to offer meaningful relief. The Ichthys strike adds another variable on top of a structural deficit. Whether Ras Laffan restores capacity materially ahead of QatarEnergy's five-year estimate is the signal that will ultimately determine the direction of Asian LNG prices through 2026 and into the next contract year.1,2,6