BAKU, Azerbaijan, June 24. Liquefied natural gas (LNG) markets face mounting uncertainty as Iran’s threat to blockade the Strait of Hormuz intensifies concerns over global energy supply chains. With 20% of global LNG exports transiting the vital waterway—most originating from Qatar and the UAE—any disruption could send spot LNG prices soaring and strain the ability of key Asian economies to meet near-term demand.
“Should there be a disruption in supply, major buyers will have to turn to the spot market, which will inevitably drive up prices,” warned Lu Ming Pang, Senior Analyst for Gas & LNG Research at Rystad Energy, Trend reports.
Countries with high reliance on Qatari and UAE LNG are particularly exposed:
Bangladesh – 69.2%
India – 66%
China – 34%
Thailand – 21%
South Korea – 16%
Japan – 5.61%
Although long-term contracts from Qatar typically offer little flexibility, most buyers are preparing for delays rather than complete supply loss, unless the blockade becomes total or triggers a force majeure.
The Iranian parliament recently approved a motion to block the Strait of Hormuz in response to U.S. airstrikes on its nuclear infrastructure. However, the move still awaits authorization from the Supreme National Security Council, and Iran’s ability to enforce a full closure is complicated by the heavy U.S. military presence in the region.
“While Iran may signal intent to close the strait, executing such a move would likely provoke a proportionate military response from the U.S., limiting Iran’s options,” Pang noted. “Still, the perceived risk to vessels transiting the Strait is enough to drive higher insurance costs and risk premiums in LNG markets.”
Even a brief disruption would have disproportionate effects on Asia, which receives nearly 80% of all LNG passing through the strait. In response, importers are increasingly seeking “unchokeable” supply routes—LNG sources that avoid geopolitical hotspots and strategic maritime chokepoints.
As tensions escalate, market participants are closely monitoring whether Qatar and the UAE—both maintaining relatively stable ties with Iran—can continue shipments uninterrupted. Meanwhile, governments and utilities are reassessing energy security strategies, including diversification of supply and long-term resilience planning.
The unfolding crisis highlights a stark reality: LNG markets may be entering a new era of geopolitically driven volatility, where logistics risk becomes as crucial as supply and demand fundamentals.