Hormuz blockade and Qatar attacks delay LNG glut to 2028
Iranian attacks on Qatari infrastructure and the closure of the Strait of Hormuz have removed nearly a fifth of global LNG supply from the market, delaying an anticipated oversupply by a year and reshaping global energy trade.
An anticipated glut of liquefied natural gas has been pushed back to 2028, a full year later than previously expected. The delay follows Iranian drone and missile strikes on Qatar’s Ras Laffan Industrial Complex and the closure of the Strait of Hormuz to LNG tankers. Together, these disruptions have effectively locked out roughly 20% of global supply.
The Ras Laffan facility, the world’s largest LNG plant with a capacity of 77 million tonnes per year (tpy), suffered significant damage in March. Ballistic missiles destroyed liquefaction trains 4 and 6, alongside a gas-to-liquids processing unit. The loss of 12.8 million tpy of capacity—representing 17% of Qatar’s output—is expected to drain $20 billion in annual revenue from the Gulf exporter, with repair costs estimated as high as $26 billion.
The physical damage has been compounded by a maritime blockade. Iran has closed the Strait of Hormuz to LNG vessels, with an Islamic Revolutionary Guard Corps commander declaring that passage will be governed solely by Tehran. Traffic through the critical chokepoint has virtually ceased, with only three commodity tankers crossing on July 16.
QatarEnergy declared force majeure in early March and has since abandoned plans to resume normal operations. Despite a ceasefire framework and hopes to lift the clause by mid-July, a recent attack on a Qatari LNG tanker has forced the company to maintain minimal operations. Force majeure notices for August have now been issued to Asian customers.
The crisis has also frozen Qatar’s growth trajectory. The North Field East and South expansions, which were slated to bring six new liquefaction trains online, have already been pushed back to 2027 and now face the risk of further delays.
With Qatar—the world’s second-largest LNG exporter behind the United States—sidelined, the market rebalancing is accelerating. Global oversupply is now forecast to peak between 2031 and 2032, potentially exceeding 100 million tonnes. In the interim, US exporters are positioned to capture the market share vacated by the Gulf. Analysts expect American LNG supply to grow by roughly 146 million tpy through 2035.
This supply shock is unfolding against a backdrop of surging demand. Industry projections estimate a 65% increase in global LNG demand by 2050, reaching nearly 700 million tpy, with about 180 million tpy of new supply expected by 2030. For investors and industrial buyers, the extended tightness underscores the strategic premium of secure, non-Gulf supply chains.
