Kpler Forecasts Severe Hormuz LNG Constraint Through Year-End as JKM Settles Above $21
Kpler sees Hormuz LNG flows severely constrained through year-end, leaving Asian buyers with no pipeline fallback as spot prices rise over 60% year-on-year.
Asian LNG spot prices on the JKM benchmark settled at $21.45 per million British thermal units at Friday's close (2026-07-31), up over 60% year-on-year according to Anadolu Ajansi data, after data firm Kpler said on Thursday (2026-07-24) that LNG exports through the Strait of Hormuz would remain "severely constrained" until the end of 2026 before only gradually recovering in the first quarter of 2027.7,6
Kpler's new base-case scenario resets the market's planning horizon. Until that assessment, most buyers had been working through a disruption without a firm timeline; framing the constraint as a multi-quarter problem stretching into early 2027 shifts the calculus for Asian buyers entering northern hemisphere winter procurement season.7
The physical disruption had already been escalating through July. Tanker-tracking firms showed LNG shipments grinding to a halt over a three-day window ending July 20 (2026-07-20), while oil tanker traffic shrunk considerably, Oilprice.com reported, citing Reuters data. A week earlier, on July 13 (2026-07-13), oil and LNG tankers had returned to switching off their transponders when transiting the strait after Iranian attacks on commercial ships in the week of July 6 (2026-07-06) prompted vessel operators to reconsider the passage.6,5
The corridor's scale explains why the disruption carries systemic weight. In 2025, approximately 18.2 million barrels per day of crude and refined products moved through Hormuz, which previously handled close to 20% of global oil supply, about one-quarter of seaborne oil trade, and roughly one-fifth of global LNG trade, according to OGJ analysis. Asian economies account for nearly 80% of Hormuz oil flows. China imported close to 5 million barrels per day through the strait, with India, Japan, and South Korea each taking roughly 2 million barrels per day.3
For LNG, there is no structural workaround of the kind available for crude. A gas analyst told Montel on Thursday (2026-05-21) that LNG has no pipeline alternative when Hormuz closes, unlike oil, which can be rerouted through overland connections and alternative sea lanes at varying cost and delay. That absence is what makes Kpler's timeline a harder problem than the oil disruption alone.2,7
Spot JKM prices gained 10% in the single week to July 16 (2026-07-16) and added 25% over the four weeks prior, Anadolu Ajansi reported. Traders told Bloomberg that spot LNG prices in Asia hit $20.2 per million British thermal units on July 16 (2026-07-16) itself. JKM closed higher still at $21.45 at Friday's close (2026-07-31).6
Some demand-side adaptation has occurred. Alternative routing via the Red Sea and expanded ship-to-ship transfers east of Hormuz allowed effective Middle East crude exports to rebound to over 10 million barrels per day in June, S&P Global analysis showed, even as the EIA estimated crude production shut-ins in the Middle East averaged 10.5 million barrels per day in April, peaking near 10.8 million barrels per day in May as storage capacity filled. India's LNG imports fell only 5% despite a 17% global supply disruption, S&P added, as diversified sourcing from Oman, the United States, Nigeria, and Angola kept May volumes just 2% below year-ago levels.4
But rerouting crude is not the same as rerouting LNG. S&P's own estimate placed the effective closure of Hormuz at a 15 million barrels per day cut in Gulf liquids production — the scale of what alternative routing has had to compensate for is itself extraordinary. Gas buyers cannot replicate that workaround. LNG requires regasification infrastructure that does not exist along alternative supply routes in the volumes needed.4,2
Poten & Partners put numbers on the demand destruction arithmetic. Jason Feer, the firm's head of business intelligence, said on Wednesday (2026-05-20) that if supply remained cut off until end of August 2026, global LNG markets would face demand destruction of 38 to 42 million tonnes, equivalent to 43.5 to 57 billion cubic metres, this year, with up to 20 million tonnes of further impact possible in 2027. A separate Poten & Partners forecast, cited by Montel on Thursday (2026-05-21), put the broader impact of Hormuz blockade disruptions on LNG supply as potentially lasting until 2028.1,2
ICE Brent crude front-month settled at $91.04 per barrel and NYMEX WTI front-month at $86.80 per barrel at Friday's close (2026-07-31). JKM at $21.45 sits above the $20.2 level traders reported to Bloomberg on July 16 (2026-07-16). Whether Kpler's gradual recovery scenario for Q1 2027 holds, or whether the disruption extends toward the 2028 timeline Poten & Partners has outlined, depends entirely on developments inside the strait that the market currently cannot price with confidence.7,1,6