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Total global liquefied natural gas (LNG) trade in 2026 could be similar to last year’s 422 million tonnes if shipping through the Strait of Hormuz returns to normal this summer, before returning to growth in 2027, Shell said in its LNG outlook 2026.
The LNG trade was expected to increase significantly in 2026, the report said. However, severe disruption to shipping through the Strait of Hormuz has shut in around one-fifth of the world’s monthly LNG supply since the Iran conflict began, pushing up spot market prices and adversely affecting some Asian countries.
The ramp-up of new liquefaction facilities in North America, improved performance at existing plants, and slower Asian LNG imports have partially offset the impact of reduced supply from the Middle East.
“The conflict created a system-wide shock with disruption cascading across all segments of the economy, but the LNG industry has proved resilient and able to adapt to changing market conditions,” said Cederic Cremers, President of Integrated Gas at Shell.
About 180 million tonnes of annual new supply is forecast to enter the market by 2030, improving the availability and affordability of gas and opening up demand in new markets.
Global demand is expected to increase to nearly 700 million tonnes a year by 2050, an increase of around 65% from 2025 levels, the report said.
The growing demand will need significant additional investment in new LNG liquefaction plants through the 2030s and 2040s, in addition to projects already under construction.
Although spot prices of LNG in Asia increased to more than $20 per million British thermal units (MMBtu) at the peak of the Middle East crisis, prices remained significantly lower than in 2022 following the Russian invasion of Ukraine, reflecting the greater resilience of the LNG market.
The long-term supply agreements account for around two-thirds of total LNG trade.
Therefore, the average price buyers paid for LNG in May was around $11-12 per MMBtu, compared to $7-11 per MMBtu in January, before the conflict began, Shell said.
(Writing by P Deol; Editing by Anoop Menon)
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