IEA says Middle East conflict altering medium-term gas outlook

• The conflict has cut LNG supply by approximately 15%, with lost volumes primarily from Qatar and the United Arab Emirates
• Iranian attacks have disabled 17% of Qatar's LNG export capacity, impacting supplies ahead of the critical summer storage season
• EU gas storage is 30% below five-year averages, requiring an extra 10 bcm to reach the 90% target, while new liquefaction capacity is expected to partially offset losses

Summary

The International Energy Agency (IEA) reports that Middle East conflict has significantly impacted global natural gas markets, with Gergely Molnar announcing at the Budapest LNG Summit that the crisis will result in a loss of approximately 120 billion cubic metres (bcm) of global LNG supply between 2026 and 2030.

Key Figures:

• LNG supply has been reduced by around 15% due to the conflict
• Iranian attacks have eliminated 17% of Qatar's LNG export capacity, threatening supplies to Europe and Asia
• European Union storage levels are currently 30% below their five-year average
• An additional 10 bcm of gas will be required to meet the EU's 90% storage target

Market Implications:

The conflict is reshaping medium-term gas outlook, with tighter market conditions expected to persist longer than previously anticipated. The supply disruptions primarily affect Qatar and the United Arab Emirates, two major LNG exporters. The timing is particularly critical as the summer season typically allows markets to build storage ahead of winter demand.

However, the IEA notes that a strong increase in new liquefaction capacity is expected to help offset the lost volumes from the affected regions.

Regional Impact:

Europe faces immediate concerns with below-average storage levels heading into the crucial pre-winter filling season. The reduced Qatari export capacity threatens supply security for both European and Asian markets, potentially leading to increased competition for available LNG cargoes and upward pressure on prices.