IEA Warns of Tight Global Gas Supplies for Winter Due to Strait of Hormuz Disruptions

Global natural gas supplies are expected to face tightening conditions during the 2026–27 winter heating season, according to a recent report by the International Energy Agency (IEA). The supply constraint is driven by trade flow disruptions through the Strait of Hormuz, creating an unprecedented supply shock in the global liquefied natural gas (LNG) market.

Data from the report indicates that LNG loadings from Qatar and the United Arab Emirates dropped by 60 billion cubic metres (bcm) year-on-year between March and October 2026. This decline resulted in a 5 per cent, or 20 bcm, drop in global LNG output. Although new projects provided some additional supplies, they only partially compensated for the reduced deliveries from the Persian Gulf.

Transit through the Strait of Hormuz remained severely restricted in late October, prompting warnings from the IEA that the disruption will continue to impact global gas supplies through the winter months. Depending on how quickly shipments through the Strait recover, global LNG supply could decline by 10 to 25 bcm year-on-year between November and March.

The report highlighted that the scope for increasing pipeline gas supplies is limited. Long-distance pipelines generally operate close to their designed capacity, which restricts their ability to offset shortages in the LNG market. Consequently, North American exporters are anticipated to drive LNG supply growth during the winter, supported by expanding energy projects in the United States, Canada, and Mexico.

Additional supply contributions are expected from new facilities in West Africa and Australia. New LNG projects globally are projected to add approximately 18 bcm of supply during the winter, while existing facilities could contribute another 3 bcm. This brings the total incremental supply from outside the Persian Gulf to over 20 bcm.

Despite this growth, the IEA noted that extra supplies from outside the region remain insufficient to fully compensate for the lost volumes from Qatar and the United Arab Emirates.

The IEA outlined two potential scenarios for the winter period. If the Strait of Hormuz begins progressively reopening in January 2027, global LNG supply could decline by around 9 bcm, or 3 per cent, year-on-year. However, if the Strait remains closed until the end of March 2027, the global LNG supply could see a sharper decline of approximately 20 bcm, or 7 per cent, year-on-year.

Furthermore, the report cautioned that unplanned outages and delays in production ramps at new LNG projects pose additional downside risks to global supplies amid the ongoing Middle East supply disruptions.

"Energy supply disruptions of this scale have a direct ripple effect on global operating costs, logistics, and manufacturing supply chains. For businesses and industrial consumers worldwide, tighter gas markets during the winter months mean heightened volatility in energy pricing. Enterprises must closely evaluate their energy procurement strategies, build operational efficiencies, and factor in potential cost escalations as the global energy landscape navigates these regional supply constraints." — Dr. Shishir Gupta, Founder & CEO, StartupLanes