China's Qatar LNG Purchases Near Zero in Q2 as State Buyers Seek Non-Gulf Contracts
A near-total halt to Chinese LNG imports from Qatar is pushing PetroChina and Sinopec into long-term deals with exporters outside the Strait of Hormuz.
China imported roughly 100,000 tons of LNG from Qatar in the second quarter of this year, ship-tracking data compiled by Bloomberg show, down from as much as 4.7 million tons in the same period of 2025. The collapse is not a rounding error. Qatar supplied nearly 30% of China's LNG last year, making Beijing its single largest customer by volume.6
PetroChina and Sinopec are now in talks with exporters outside the Gulf for potential deliveries starting before 2030 and running for at least ten years, according to sources cited by Bloomberg. The conversations represent a structural response to the disruption of Hormuz shipping, not a temporary rerouting while the strait recovers.6
The JKM Asian LNG benchmark settled at $20.98/MMBtu as of Friday's close (2026-07-18), a level that reflects the tension between falling Asian demand and a physically constrained supply picture from the Gulf. The bearish demand signal is real: Wood Mackenzie forecasts Asian LNG demand will decline for a second consecutive year as Middle East conflict reshapes regional supply flows.5 But the supply side has not healed. Tanker traffic through the Strait of Hormuz has fallen roughly 80% since the conflict began, and attacks on Qatar's LNG export infrastructure have removed a significant portion of global supply from the market, according to Morningstar DBRS.3
Unlike crude oil, LNG has no viable pipeline alternative when a key maritime corridor closes. "LNG has been cemented as an exclusively seaborne commodity," a gas analyst told Montel, noting that the fuel's advertised supply flexibility now depends on the availability of shipping routes rather than on the fuel itself.1 The strait previously handled about 20% of global crude oil and seaborne gas trade, according to Morningstar DBRS.3
One reference scenario from an energy research firm holds that Hormuz flows will normalize to above 95% of pre-crisis levels only by the fourth quarter of 2026. Gulf production shut-ins were estimated at 12.1 million barrels per day in March, with the projection rising to 12.7 million barrels per day in April relative to pre-war February levels.2 If that timeline is right, the supply gap persists through the northern hemisphere winter, traditionally the period when JKM carries its widest seasonal premium.
The contrarian case for JKM is simply that the market may be underpricing the duration of the disruption. ING has flagged that both oil and gas prices appear to underprice the risk of a prolonged Hormuz closure.4 A winter demand surge with Qatar effectively sidelined and no major new non-Gulf LNG project commissioned in time would tighten the market faster than demand trends can offset it.
The procurement shift underway in Chinese boardrooms adds a longer-dated dimension to the story. Analysts at Morningstar DBRS noted at their Credit Insights Calgary conference that energy security is increasingly outweighing cost considerations in LNG contracting decisions, a trend they expect to persist regardless of how the current conflict resolves.3 Long-term deals signed in July 2026, for delivery starting before 2030, would lock in volumes from US, Australian, or East African suppliers and structurally reduce the share of China's LNG portfolio exposed to Gulf shipping risk.
For the JKM spot market in the near term, the Q2 import data from Qatar underlines how sudden and severe the volume dislocation has been. Chinese buyers absorbed the disruption partly by drawing on storage and LNG inventories elsewhere, and partly through demand reduction. Whether those buffers remain intact heading into a northern hemisphere winter, and whether new non-Gulf volumes can be redirected to Northeast Asia quickly enough to substitute for Qatari cargoes, will determine how tight the physical market becomes in the fourth quarter.6,3
The talks between PetroChina, Sinopec, and non-Gulf exporters are not yet contracts. The gap between a decade-long deal discussed in July 2026 and first LNG cargo delivered is measured in years of construction and financing. Whether sellers outside the Gulf can match the volumes China historically sourced from Qatar, and at what delivered cost, remains the key variable for how durable the JKM supply constraint turns out to be.6