Shell Warns Hormuz Disruption May Keep 2026 LNG Trade Flat Against 2025 Levels
Shell's LNG Outlook 2026 sees global demand reaching nearly 700 million metric tons by 2050 but warns Strait disruptions could stall growth this year.
Asian LNG imports dropped nearly 4% to 127.70 million metric tons in the first half of 2026 against the same period last year, Kpler data show, underscoring how quickly Strait of Hormuz shipping disruptions have translated into measurable volume shortfalls across the region.1
Shell, the world's largest LNG trader, said on Tuesday (2026-06-30) that full-year 2026 global LNG trade could end flat against the 422 million metric tons recorded in 2025 if Hormuz flows remain constrained. In its annual LNG Outlook 2026, published the same day, Shell said volumes could still broadly match last year if shipping through the strait normalised this summer — a conditional that, as of Monday (2026-08-03), remains unresolved.1,6,5
Beyond this year, Shell's view is considerably more bullish. Global LNG demand is expected to reach nearly 700 million metric tons a year by 2050, up roughly 65% from 2025 levels, driven by South and Southeast Asian economies seeking lower-emission alternatives to coal and facing declining domestic gas production as energy demand accelerates. Those two regions are forecast to account for around 40% of global LNG imports by mid-century. Meeting that implied demand would require approximately 300 million metric tons of LNG a year from the region, Shell said.4,1
The historical scale of growth lends the forecast some grounding. Since Shell launched its annual LNG outlook in 2017, global trade has expanded about 60%, from 264 million metric tons to 422 million metric tons in 2025, the company said. China's imports rose roughly 250% over the same period. The number of LNG-importing countries grew from 36 to 49.3
About 180 million metric tons a year of new liquefaction capacity is expected to reach the market by 2030, Shell said, which should ease supply constraints, improve affordability, and attract demand in markets not yet well-integrated into global LNG trade. Shell sees growth resuming in 2027 as that capacity comes online, with 2026 largely absorbed by the Hormuz disruption.1,5
European gas demand adds a separate dimension. Montel reported on Tuesday (2026-06-30) that Shell now sees European demand plateauing until 2030 rather than declining as earlier models assumed, with the energy transition running slower than expected and LNG playing a growing balancing role in that plateau. Demand in Europe is expected to fall after 2030. ICE Endex TTF front-month gas was quoted €59.05/MWh on Monday (2026-08-03).2
Data centres feature in Shell's demand drivers, adding industrial electricity load that flows through to gas-fired generation in markets where renewable build-out cannot keep pace with consumption growth.1
The emissions case for LNG growth is contested. A 2025 IEA report estimated global LNG supply generated roughly 350 million metric tonnes of CO2-equivalent greenhouse gas emissions in 2024, about 25% lower than coal across most energy uses. More than 99% of 2024 LNG consumption carried a lower lifecycle carbon footprint than coal, the IEA said.3
Cornell University researcher Robert Howarth has calculated the greenhouse gas footprint of US LNG at 160g CO2-equivalent per megajoule, roughly 33% above coal, which would undercut the coal-switching rationale central to Shell's Asian demand growth projections. The IEA separately estimated that electrifying and decarbonising existing LNG infrastructure would require just over $100 billion in upfront investment.3
JKM spot, the Asian LNG benchmark, was quoted $21.45/MMBtu on Monday (2026-08-03). Analysts expect elevated prices to curb South Asian buying, with some purchasers switching to coal or domestic gas as costs rise, pressure that could shave the top off Shell's 2050 trajectory if affordability problems persist through the demand growth period.1
The 2030 supply wave should, in theory, ease those pricing pressures. But near-term Hormuz uncertainty makes capital commitment to long-cycle LNG projects harder to justify when the volumes those projects depend on must pass through one of the world's most contested shipping lanes.5,6