Strait of Hormuz Disruptions Tighten Global LNG Market

Recent geopolitical tensions and disruptions to key shipping lanes are impacting the global liquefied natural gas (LNG) market, with the Strait of Hormuz emerging as a critical chokepoint. Approximately 20% of global LNG trade transited the Strait in 2024, primarily originating from Qatar, making it a vital artery for energy supply, particularly to Asian markets.

The Strait of Hormuz: A Critical Chokepoint

The Strait of Hormuz, a narrow sea passage between the Arabian Peninsula and Iran, is one of the world’s most strategically important oil and gas transit routes. In 2025, an average of 20 million barrels per day of crude oil and oil products were shipped through the Strait [IEA]. Any disruption to this waterway has significant consequences for global energy markets.

LNG Flows and Key Exporters

In 2024, Qatar exported approximately 9.3 billion cubic feet per day (Bcf/d) of LNG through the Strait of Hormuz, while the United Arab Emirates (UAE) exported around 0.7 Bcf/d [EIA]. These two nations account for nearly all LNG flows from the Persian Gulf through the Strait. Approximately 83% of LNG moving through the Strait in 2024 was destined for Asian markets, with China, India and South Korea as the top destinations, collectively receiving 52% of all LNG flows.

Recent Market Shifts

Disruptions to LNG flows through the Bab al-Mandeb Strait, coupled with increased U.S. LNG exports to Europe, have shifted Qatari LNG exports towards Asia. Kuwait, the UAE, and Bahrain have begun importing LNG from sources outside the Persian Gulf, including the United States and West Africa. Bahrain initiated operations at an LNG import terminal in April 2025 and has since received cargoes that transited the Strait of Hormuz from these alternative sources [EIA].

Global LNG Trade Dependence

The Strait of Hormuz is crucial for both Qatar and the UAE, with approximately 93% of Qatar’s and 96% of the UAE’s LNG exports transiting the waterway, representing 19% of global LNG trade [IEA]. A closure of the Strait would strand these exports, significantly impacting global gas supply.

Geopolitical Risks and Market Response

Recent events, including US and Israeli strikes on Iran and subsequent retaliatory actions, have heightened concerns about potential disruptions to the Strait of Hormuz and have led to adjustments in global gas markets [OilPrice.com]. While a complete closure remains unlikely, even a short-lived disruption could have a substantial impact on oil and gas prices.

Key Takeaways

• The Strait of Hormuz is a vital chokepoint for global LNG trade, with Qatar and the UAE being key exporters.
• Approximately 20% of global LNG trade transited the Strait in 2024.
• Geopolitical tensions and disruptions to shipping lanes are increasing market volatility.
• Asian markets are the primary destination for LNG flows through the Strait of Hormuz.