Twin Strait Closures and Ras Laffan Damage Hold JKM at $21 as European Storage Deficit Deepens
Back-to-back Hormuz and Bab el-Mandeb closures have cut 20% of global LNG supply, lifting JKM to $21 and leaving European storage 10 points behind 2025.
The JKM Asian LNG spot benchmark stood at $21.11 per MMBtu on (2026-08-09), holding well above pre-war levels as supply disruptions that began with the Strait of Hormuz closure on February 28 (2026-02-28) have since extended to a second major shipping lane. ICE Endex TTF front-month settled at €55.50 per megawatt hour on the same date, with European buyers approaching the autumn injection season at their weakest storage position in at least two years.3,1
European underground gas storage stood at less than 54% full as of late July (2026-07-22), against 64% at the same point in 2025, Oilprice.com reported. That 10-point deficit narrows the buffer available before the October heating season and leaves little room for injection shortfalls ahead of winter.3
The primary source of the supply loss is Qatar's Ras Laffan complex. The EIA calculated that the Hormuz closure has removed more than 10 billion cubic feet per day from international LNG markets — approximately 20% of global seaborne supply — with Ras Laffan accounting for most of the disrupted volume.1
Physical damage has deepened the transit restriction. Iranian missile and drone strikes during spring 2026 hit Ras Laffan LNG Trains 4 and 6 and Pearl GTL Train 2, with QatarEnergy estimating the strikes would sideline approximately 12.8 million tonnes per year of capacity, Oilprice.com reported. A repair timeline has not been publicly disclosed.3
Since then the disruption has spread to a second chokepoint. The Strait of Bab el-Mandeb, through which about 7% of global oil output normally transits, has effectively closed, compounding the rerouting burden for tankers trying to reach European and Asian buyers, Oilprice.com said.3
Asia is more exposed than Europe. Nearly 90% of LNG shipments from Qatar and the UAE flow to Asian buyers, while Europe sources between 7% and 11% of its LNG imports from the region, Oilprice.com noted. India was sourcing close to 60% of its LNG imports from Middle Eastern producers before the conflict began.3
The price divergence between producing and consuming regions has been sharp. ICE Endex TTF futures rose to $14.80 per MMBtu for the week ending April 24 (2026-04-24), 35% above pre-closure levels, the EIA reported. Henry Hub benchmark prices fell 9% over the same period, with domestic U.S. supply remaining ample and export terminals lacking the short-run capacity to capture the transatlantic premium.1
U.S. terminals have since run toward their ceiling. Utilization reached 94% of Department of Energy-approved export levels in March (2026-03), up from 91% in February when exports ran at an estimated 17.3 billion cubic feet per day, the EIA said. Venture Global and Cheniere Energy were among the exporters that stepped in to fill part of the supply gap, The Globe and Mail reported.1,2
Trading volumes have surged alongside the physical dislocation. LNG transactions in the Physical Asia Platts Market on Close assessment process climbed sharply, and derivatives volumes jumped 251% year-on-year, Platts senior price reporter Suyash Pande said. The scale of hedging activity reflects how few market participants are pricing a single supply recovery path.3
Some buyers have begun testing substitutes. Newcastle thermal coal held at $116.75 per tonne as of (2026-08-09), and Oilprice.com reported that buyers across Asia and Europe were examining coal and fuel oil alternatives as gas prices stayed elevated.3
Analysts at Independent Commodity Intelligence Services said the conflict has already delayed the expected recovery of Qatari LNG supply and that European gas supply faces pressure this winter. U.S. terminals running at 94% of approved capacity leave limited room to increase volumes without new export infrastructure, including projects such as Plaquemines LNG, coming fully online. QatarEnergy has not disclosed a repair schedule for the damaged Ras Laffan trains — until it does, the 12.8 million tonnes per year gap in global supply has no scheduled close date.3,1