LNG prices near $25 as Hormuz closure squeezes Asia ahead of winter

Seven months after US and Israeli strikes on Iran began in late February 2026, the de facto closure of the Strait of Hormuz continues to ripple through global energy markets, with natural gas prices climbing toward winter and developing nations increasingly priced out of the fuel they need.

A Fifth of Global LNG Supply Offline

The Strait of Hormuz, the narrow waterway through which roughly 20% of global LNG supply flows, has been largely shut to commercial shipping since March. Qatar, the world's largest LNG exporter, has been hardest hit. Monthly exports collapsed from a pre-conflict average of six to eight million tons to around one million tons by April, according to Crypto Briefing. Physical damage to QatarEnergy's Ras Laffan complex has knocked out 17% of Qatar's total export capacity, with repairs expected to take three to five years.cryptobriefing+1

The International Energy Agency said in August that the disruption has removed close to 20% of global LNG supply from the market and triggered sharp price increases across key importing regions. Global LNG production declined 8% year-on-year, with the IEA warning of a cumulative loss of around 120 billion cubic metres of LNG supply between 2026 and 2030.iea

Prices Surge, Developing Nations Squeezed

Asian spot LNG prices, which traded around $10 to $11 per MMBtu before the conflict, have surged well above $20. As of mid-September, the JKM Asia benchmark sits near $25 per MMBtu. The Financial Times News Corp ↘ 2.07% noted on Monday that prices are around $25 per MMBtu, with reports of options trading above $30, calling it "high and painful" as markets brace for winter.ft+3

The cost to Asia has been staggering. The supply shock has imposed an estimated $7 billion in additional energy costs on the region. Bangladesh and Pakistan have been among the hardest hit. QatarEnergy warned Bangladesh that contracted deliveries may be halved in 2026 with no timeline for full resumption. Pakistan secured a late-July spot cargo at approximately $21.88 per MMBtu, the highest since 2022. Both countries, along with smaller Southeast Asian importers, are being forced to buy fuel at nearly double their typical long-term contract rates.cryptobriefing+2

Oil markets have also felt the disruption. Brent crude broke above $100 per barrel earlier in the conflict, and a Congressional Research Service report confirmed the benchmark crossed that threshold during the crisis. Bloomberg reported in July that a global fight for LNG threatens to upend Europe's strategy of delaying winter purchases until the strait reopens.congress+1

Winter Looms, Structural Shift Deepens

The damage extends beyond the current crisis. The IEA expects tight markets to persist through 2027, with Qatar's planned North Field expansion delayed by at least two years. Nations that had been transitioning away from coal are reconsidering their timelines, while Japan has accelerated nuclear reactor restarts and new LNG projects in Mozambique, Canada, and the US Gulf Coast are drawing renewed investor interest.cryptobriefing+1

As the World Bank noted, the Asian LNG benchmark spiked about 94% during March alone. With winter demand approaching and no reopening of the strait in sight, energy traders and governments face the prospect that this is not a temporary disruption but a structural reshaping of global energy flows.blogs.worldbank