West Asia conflict could cause 120 bcm of LNG supply loss from 2026-2030, says International Energy Agency

The International Energy Agency (IEA) has projected that the West Asia conflict could result in cumulative LNG (liquefied natural gas) supply losses of over ...

What Happened

The International Energy Agency (IEA) has projected that the West Asia conflict could result in cumulative LNG (liquefied natural gas) supply losses of over 120 billion cubic metres (bcm) between 2026 and 2030 — approximately 15% of expected global LNG supply over that period.
The Strait of Hormuz, closed to LNG transit from March 2026 onward amid the ongoing conflict, has sharply curtailed the combined LNG output of Qatar and the United Arab Emirates (UAE), resulting in a loss of roughly 10 bcm for March alone.
The disruption has reduced LNG supplies from Qatar and the UAE by over 300 million cubic metres per day since 1 March — translating to more than 2 bcm of lost gas supply every week.
The IEA noted that in 2025, over 110 bcm of LNG passed through the Strait of Hormuz, representing nearly 20% of global LNG trade, with 93% of Qatar's and 96% of the UAE's LNG exports transiting through this chokepoint.
Global LNG supply dropped by approximately 20% in the immediate aftermath, with around 90% of Hormuz-transiting LNG destined for Asian markets and roughly 10% for European buyers.
The IEA assessed that while new liquefaction projects coming online in the medium term will eventually offset these losses, the market-easing LNG supply wave expected from new projects will be delayed by at least two years.
There are no alternative export routes for Qatar's or the UAE's LNG other than existing liquefaction terminals feeding through the Strait.

Static Topic Bridges

Strait of Hormuz: Geography and Strategic Significance

The Strait of Hormuz is a narrow waterway connecting the Persian Gulf with the Gulf of Oman and the wider Arabian Sea, lying between Iran to the north and Oman (and the UAE's Musandam Peninsula) to the south.

Width at narrowest navigable point: approximately 21 nautical miles (around 39 km)
Shipping uses two designated 2-nautical-mile-wide lanes (inbound and outbound) separated by a buffer zone
In 2025, the Strait handled roughly 20–21 million barrels of oil per day — approximately 20% of global oil trade
Also carries nearly 20% of global LNG trade (over 110 bcm in 2025)
93% of Qatar's LNG exports and 96% of UAE's LNG exports pass through the Strait
No pipeline or alternative sea route exists for Qatar or UAE LNG to reach global markets

Connection to this news: The Strait's closure is the direct physical mechanism translating the West Asia conflict into a global energy supply shock. Its uniqueness as an irreplaceable chokepoint means any disruption has immediate and global cascading effects on LNG markets.

LNG: What It Is and Why It Matters for India

Liquefied Natural Gas (LNG) is natural gas cooled to approximately −162°C, reducing its volume by about 600 times for transport by specialised tanker ships. It is re-gasified at the destination for use in power generation, industry, and households.

LNG is distinct from pipeline gas — it enables intercontinental trade where pipelines are not feasible
Global LNG trade in 2025: approximately 550–560 bcm annually
Top LNG exporters: USA (largest), Australia, Qatar (second largest), Russia
India is among the top LNG importers globally; imports are used for power generation, fertiliser production, and city gas distribution
India has four major LNG regasification terminals: Dahej (Gujarat), Hazira (Gujarat), Kochi (Kerala), and Dabhol (Maharashtra), with more under development
Rising domestic natural gas demand and the government's target to raise natural gas's share in the energy mix from ~6% to 15% by 2030 makes LNG supply security critical for India

Connection to this news: Any prolonged disruption to Qatar and UAE LNG exports directly affects India's LNG import volumes and prices, since Qatar is a leading supplier to India through long-term contracts.

International Energy Agency (IEA)

The IEA is an intergovernmental organisation established in 1974, following the 1973 oil crisis, to coordinate energy policy among member countries and provide independent analysis of global energy markets.

Founded: 1974, under the OECD framework
Headquarters: Paris, France
Membership: 31 countries (mostly advanced economies); India is an Association country, not a full member
Mandate: Energy security, statistical analysis, climate and clean energy transition
Key publications: World Energy Outlook (WEO), Oil Market Report, Gas Market Report
The IEA's LNG supply disruption projections carry significant market-moving weight for global energy policy

Connection to this news: The IEA's 120 bcm projection is the authoritative international assessment underpinning global policy responses to the Hormuz closure, making it directly relevant to India's energy import strategy and diplomatic positioning.

Energy Security and India's West Asia Dependence

India is heavily dependent on West Asia for crude oil imports (~65% of crude oil and significant LNG). The region's instability directly affects India's energy costs, import bill, and macro-economic stability.

India's crude oil import bill: one of the largest foreign exchange expenditure items
West Asia supplies approximately 65% of India's crude oil imports
The UAE, Qatar, and Oman are key LNG and crude suppliers to India
India's Strategic Petroleum Reserves (SPR) capacity: approximately 5.33 million metric tonnes at three locations (Visakhapatnam, Mangaluru, Padur)
Energy price shocks from West Asia conflicts typically transmit as higher inflation, wider current account deficit, and currency pressure on the Indian Rupee

Connection to this news: The IEA's warning directly situates India's energy vulnerability — a 120 bcm supply loss concentrated among India's key LNG suppliers is a material energy security risk requiring diversification and diplomatic engagement.

Key Facts & Data

Projected cumulative LNG supply loss (2026–2030): over 120 bcm (~15% of expected global supply)
March 2026 loss from Qatar + UAE combined: ~10 bcm for the month
Weekly loss rate since March 1, 2026: over 2 bcm per week (>300 million cubic metres per day)
LNG transiting Hormuz in 2025: over 110 bcm (~20% of global LNG trade)
Qatar's LNG routed through Hormuz: ~93% of total exports
UAE's LNG routed through Hormuz: ~96% of total exports
Asian markets receive ~90% of Hormuz-transiting LNG; Europe ~10%
Asia's LNG imports via Hormuz: ~27% of Asia's total LNG imports in 2025
IEA was founded in 1974; Headquarters: Paris, France
Global LNG supply dropped approximately 20% immediately after Hormuz closure
New liquefaction projects will offset losses but with at least a 2-year delay