Global LNG crunch deepens as Qatar outage persists, threatening winter supply

A sixth of the world's liquefied natural gas supply has vanished. Qatar's plants remain offline, and no one knows when they will restart. The price of LNG has climbed, but not to the catastrophic levels of 2022—when it hit $70 per unit—because Asia has managed to redirect supply from America, Australia, Malaysia, and Nigeria to fill much of the gap. So far this year, Asian imports stand at 193 million tonnes, only 7 million below last year's pace at the same point. On the surface, the market is holding. Beneath it, the ground is shifting.

The real pressure will come in the next few months. Europe normally uses summer to stockpile gas for winter—what traders call "building fat"—but this year, Asian buyers have claimed most of the Atlantic cargoes that would typically flow west. European utilities are gambling on two things: that winter will be mild, thanks to El Niño weather patterns, and that forecasters know what they are talking about. The numbers suggest they should worry. Europe's gas storage is only 72 percent full, the lowest level on record for this time of year. In 2022 through 2025, storage averaged 90 percent. Germany's reserves sit at just 57 percent. When Six One Commodities, an energy merchant, ran the past decade of winter weather through its computer models, three of those ten scenarios left Europe's storage so depleted by spring that emergency measures would have been necessary.

On September 30th, Germany's government ordered a state-owned importer to secure eight additional terawatt-hours of gas capacity—the equivalent of eight LNG cargoes—by mid-December. But the European Commission has not reinstated its pre-war requirement that utilities fill storage to 90 percent by November. The reason is blunt: if governments flooded the market all at once, they would drive prices up. Spot prices for immediate delivery are already higher than futures prices, which means most importers have little reason to buy now and store for later. They are waiting, hoping prices fall.

If the weather cooperates and Qatar's plants come back online by December, Europe will muddle through and prices will decline. Both conditions carry risk. Analysts estimate that an unexpectedly cold November could send prices to $30 to $40 per million British thermal units as European buyers scramble for cargoes. If that cold persisted into winter, competition with Asia would intensify. A former Singaporean energy official warned plainly: in a truly severe winter, "there may be no ceiling to the price." Any other shock—empty hydroelectric reservoirs, a surprise nuclear shutdown, a Russian strike on European infrastructure—could send prices soaring.

Qatar has given no signal that it plans to restart soon. The company's silence suggests it does not believe peace is imminent. If Qatari supply does not return quickly, Europe will need an extra 20 million tonnes of LNG to rebuild reserves before next winter. That hunt would push prices higher throughout 2027.

Yet the crisis contains the seeds of its opposite. Before the war, most analysts expected the global LNG market to tip into surplus by 2026. New projects in development were supposed to flood the market with cheap gas. The war has delayed that reckoning, but the projects are still moving forward. The more acute the shortage now, the more severe the glut could be later. At Gastech, an industry conference in Bangkok last month, exporters and developers showcased new liquefaction plants using flat-screen displays and tanker models. Traders locked in future cargoes. Equipment makers filled their order books. The message was clear: everyone is betting on abundance. The watchword was diversification—breaking free from dependence on any single supplier. What no one was discussing was what happens when all those new projects come online at once and the market swings from scarcity to surplus. That reckoning is still years away, but it is coming.