economy
March 9, 2026
There's another energy market that may get hit harder than oil by Strait of Hormuz closure
Roughly 20% of global liquefied natural gas flows through the Strait.
TL;DR
- Traffic in the Strait of Hormuz has nearly come to a standstill, impacting oil prices and significantly affecting the liquefied natural gas (LNG) market.
- Approximately 20% of global LNG flows through the Strait, with the majority exported from Qatar.
- Qatar has halted LNG output following an Iranian drone attack, causing global gas prices to surge, especially in Europe and Asia.
- Unlike crude oil, LNG transport requires ships, and gas production is highly concentrated in Qatar's Ras Laffan industrial complex, making it more vulnerable.
- Restarting Qatar's LNG production is a complex industrial process that will take weeks, not days, and operations cannot be easily ramped up or down.
- The U.S. is the world's largest LNG exporter but is operating at maximum capacity, and demand destruction may be necessary to balance the market.
- Further escalation of hostilities could lead to larger long-term ramifications, as Iran could potentially inflict major damage on Qatar's LNG capacity.
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