Will the Middle East War Impact LNG After Oil? "Supply Shortage Likely if Qatar's Production Disruptions Continue"

by Ryu Hyunseok

Published 09 Mar.2026 16:34(KST)

Updated 09 Mar.2026 16:37(KST)

There are forecasts that the Middle East war, triggered by the U.S. and Israeli airstrikes on Iran, could shift this year’s liquefied natural gas (LNG) market from an oversupply situation to a supply shortage.

Reuters Yonhap News

Morgan Stanley stated in a report on March 8 (local time) that if Qatar's LNG production disruptions persist for more than a month, the market could quickly enter a supply deficit. The bank further predicted that if uncertainty continues regarding the timing of the resumption of operations at Ras Laffan, the world's largest LNG facility owned by Qatar, global LNG prices could surge to around $30 per million BTU.

As a result of the Middle East war, Qatar’s Ras Laffan LNG facility has been shut down. This has caused buyers to seek alternative sources, leading to a sharp spike in natural gas prices. For example, the JKM (Japan Korea Marker), the Asian LNG spot price benchmark, has exceeded $15 per million BTU. Reports indicate that it could take anywhere from several weeks to several months for the facility to restart operations and resume supply.

The main reason a supply shortage is expected is the potential reduction in Qatar's export volumes. Last year, the United States, Qatar, and Australia together supplied more than 60% of the world’s LNG production.

Before the outbreak of the Middle East war, the market had expected the global LNG market to enter a phase of oversupply. This was because several large-scale LNG facilities were scheduled to begin operations this year, and a combination of storage saturation and increased energy self-sufficiency in Europe and China was expected to slow LNG demand. According to data analytics firm Kpler, global LNG exports last year reached a record high of about 429 million tons.

The increase in supply also put downward pressure on LNG prices. In January, the JKM price fell to around $9 per million BTU. Before the Iran war began, Morgan Stanley had projected that there could be an LNG oversupply of up to 6 million tons this year.