Ichthys Strike Ends but Japan's LNG Stocks Sit 10% Below Five-Year Average
A deal between Inpex and Australian unions on June 17 closed one supply risk, leaving Japanese utilities to rebuild stocks already badly depleted by Hormuz losses and cyclone outages.
Trade unions and Japanese energy company Inpex reached an agreement on pay and benefits on June 17 (2026-06-17), ending weeks of industrial action at the Ichthys LNG facilities in Australia, oilprice.com reported. More than 430 members of the Offshore Alliance, AWU and ETU had been involved.7
The resolution removed one layer of risk from the Asian supply picture. But the damage to Japan's inventory position will not repair quickly. As of May 24 (2026-05-24), LNG stocks held by 10 power utilities stood at 1.95 million tonnes, down 4.4% from the previous week's 2.04 million tonnes, 15.9% below end-May 2025 levels of 2.32 million tonnes, and 10.1% below the five-year average of 2.17 million tonnes. For the four weeks prior, inventories ran 8-16% lower year-on-year, averaging a 12% deficit, japan-nrg.com data show.3
Asian LNG prices reflect the broader tightness. JKM front-month settled at $21.45/MMBtu at Friday's close (2026-08-01), a price level shaped in part by QatarEnergy's estimate that damage to the Ras Laffan complex — the world's single largest LNG-producing facility — will cost roughly $20 billion per year in lost revenue and take up to five years to repair. LNG prices in Asia are 75% higher than they were before the conflict between the United States and Israel against Iran began at the end of February, according to reports.5
The Ichthys strike had compounded an already strained supply picture. Workers voted in early June to escalate action at all three sites to work stoppages of up to eight hours per day from June 11 (2026-06-11), up from four hours, threatening to cut output at a facility with 9.3 million tonnes per annum of capacity that supplies primarily Japanese and Asian buyers.5,4
That escalation followed a separate dispute at Woodside Energy's North West Shelf and Pluto LNG facilities, where maintenance workers employed by contractor UGL launched protected strike action in late May (2026-05-20) after negotiations over a new enterprise agreement stalled, domain-b.com reported. Both sets of walkouts came on top of cyclone-related outages at Chevron's and Woodside's Western Australian plants in March (2026-03-27) that had already strained global supply.2,6
Japan's policy response has offered limited relief. A government push to boost coal utilisation ran into utility caution over how long the Hormuz disruption will last, asian-power.com reported. Japan cannot import enough coal to replace LNG lost from the Strait of Hormuz, leaving utilities exposed even with the policy shift.1
The corporate backdrop adds longer-term complexity. Inpex struck a deal on May 20 (2026-05-20) to buy PetroChina's stake in Browse, Australia's largest undeveloped gas resource, which holds 14 trillion cubic feet of gas. Woodside, which operates Browse and already holds a 30.6% share, is evaluating whether to intervene and match the bid. Development of the field could cost $35 billion, japan-nrg.com reported.3
Neither outcome resolves the near-term inventory problem for Japanese utilities. The system entered the Ichthys dispute thin, and the combination of Hormuz losses, Australian industrial action and cyclone outages leaves it heading into the Northern Hemisphere summer demand season with stocks running well below historical norms.3,6
The next Japanese weekly utility inventory print will show whether the post-strike resumption of Ichthys exports has begun rebuilding stocks, or whether the 12% year-on-year deficit persists into July. With Ras Laffan out for up to five years and JKM at $21.45/MMBtu at Friday's close (2026-08-01), Asian buyers have little buffer against further disruption.3,5