Global LNG Markets to Remain Constrained into 2027

Dow Jones
Oct 07

1321 GMT - LNG markets are likely to remain tight into next year, with restricted Strait of Hormuz transit expected to constrain Qatar's exports until at least the first quarter, ANZ analysts say. Asia is bearing most of the demand adjustment, with higher LNG prices encouraging switching to coal in power generation and fuel substitution in industry, particularly in India and China. Europe, meanwhile, is relying more heavily on storage drawdowns and reduced industrial consumption to balance the market amid higher prices. A colder winter, weaker wind generation or stronger Chinese buying could intensify competition for LNG cargoes. "While the LNG market can absorb the loss of Qatari supply, the adjustment will be achieved through demand destruction, lower inventories and sustained high prices rather than a material increase in available supply," the analysts say.

 

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