LNG's Missing Millions: How Qatar's Disruption Wipes Out Global Surplus Through 2028

The global LNG market was expecting a gift: surplus. Two million tonnes in 2026, growing to 30 million in 2029. Lower prices were coming. Affordability was in sight. The Hormuz crisis has erased that entire scenario and inverted it.

Qatar is the world's second-largest LNG exporter. It was expected to produce 83 million tonnes per annum in 2026. Current estimates from energy analysts suggest actual production will be 50-55 million tonnes. That is a 30 mtpa disruption. For scale, that is almost twice Canada's entire current LNG export capacity.

This is not a rounding error. This is a two-stage shock.

Stage one: Qatari production hit directly. Missile attacks and infrastructure damage have cut available export capacity. Stage two: Even uncut production is trapped. Tankers carrying LNG cannot transit the Strait of Hormuz safely. Qatari volumes that made it to export terminals are now sitting on docks or being diverted to longer alternative routes. The result is the same: shortage.

Energy forecasts are repricing in real time. The anticipated glut—which would have lowered prices and improved affordability for Europe, Asia, and emerging markets—is now completely off the table through at least 2028. The market was pricing in lower costs. It is now repricing toward sustained scarcity.

Taiwan, which sourced roughly a third of its LNG imports from Qatar, is now vulnerable to energy shock. The island is the world's leading semiconductor manufacturer—a position that requires stable, abundant power. Taiwan's nuclear capacity has been phased out. LNG replaced it. Now that LNG supply is choked. Taiwan is revisiting nuclear strategy and considering reactor restarts, but those will take years to come online. In the interim, energy security is a constraint on manufacturing output.

LNG Canada is revving up to fill gaps. Eight vessels departed British Columbia in the first 17 days of March, versus four in all of December. Pacific Basin buyers—Asia, primarily—are already rerouting toward North American supply. U.S. LNG cargoes are also routing eastbound via Panama Canal to avoid Hormuz entirely. This is smart economics, but it extends supply chains, increases transit times, and locks in higher costs for customers who source from non-Gulf suppliers.

Qatar's North Field expansion, which underpins global supply growth through 2030, may now face delays. Those volumes were factored into long-term forecasts. A slower ramp, or a delayed ramp, means the projected surplus in 2029 does not materialize as planned. The shortage extends further.

So what happens to prices? They do not fall. They rise, stabilize at new elevated levels, and stay there. LNG buyers in Europe, Asia, and emerging markets are now locked into a multi-year period of expensive gas. That feeds into heating costs, electricity prices, industrial competitiveness, and fertilizer production (which is energy-intensive). A shortage of affordable LNG is not just an energy problem—it is an economic and food security problem.

For nations that planned on lower energy costs to fund development and manufacturing competitiveness, the calculus has changed. Higher costs mean lower margins, lower investment, slower growth. The Hormuz crisis is a long-tail event for energy markets.