Aytaj Shiraliyeva
Economics Journalist Read more
BAKU, Azerbaijan, October 26. Global importers of liquefied natural gas (LNG) will spend at least $39 billion more on purchases in 2026 than had been expected before the conflict in the Middle East began, despite a 60.7-million-metric-ton decline in import volumes.
This was reported in a statement by Rystad Energy.
According to the company’s forecast, total spending on LNG purchases under long-term contracts and on the spot market will reach $256.3 billion, compared to the $217.8 billion expected before the conflict began. It is noted that, as a result, costs will increase by approximately 18%.
"Disruptions to LNG supplies from Qatar and the UAE via the Strait of Hormuz are forcing buyers to seek alternative fuel sources and purchase additional volumes at higher prices. Rystad Energy’s model assumes that LNG supplies from Qatar and the UAE will be unavailable from March through the end of 2026. Europe will face the most significant increase in costs among the regions under consideration. The region’s LNG import costs will rise by at least $12 billion, or 18%, despite a 24-million-metric-ton decline in demand.
“Even before the conflict began, Europe was already heavily reliant on spot market purchases, which limits the potential for a further increase in their share. Taking into account the decline in demand, Rystad Energy forecasts that the share of spot purchases in the region’s LNG imports will increase by only 5.49% compared to pre-conflict estimates,” the company reports.
In addition, it is emphasized that Europe may fall short of receiving 20.6 million metric tons out of the 24.7 million metric tons of LNG from Qatar that had been scheduled for delivery in 2026 prior to the start of the conflict.
"In East Asia, the impact of disruptions will be less pronounced in relative terms. Spot purchases account for only 14.5% of the region’s LNG imports. A more diversified mix of contracts with suppliers outside the Middle East and a decline in demand will help limit the impact of disruptions.
Despite having the highest nominal dependence on contracted supplies from Gulf countries, among regions outside the Middle East, East Asia will face the smallest relative increase in LNG costs—9.7%. South Asian countries are adapting to the situation primarily by reducing imports. According to Rystad Energy’s assessment, Pakistan is cutting its purchases more significantly than India,” Rystad Energy reports.
According to the company, in Africa and South America, Egypt and Brazil, respectively, are the main drivers of growth in prices and import volumes. Middle Eastern countries, in turn, are adapting to supply disruptions by reducing demand.
"This conflict has affected all participants in the natural gas market to one degree or another, but not all economies have the same capacity to mitigate the consequences. Some importers are better prepared for rising costs, while others have no choice but to cut back on purchases and accept the economic consequences,” the senior analyst for gas market and LNG research at Rystad Energy Christoph Halser said.
According to him, the crisis is exposing vulnerabilities in gas security. Diversifying price benchmarks helps manage costs but does not guarantee the physical availability of fuel.
Halser noted that importers need to assess not only price risks but also their dependence on specific supply sources and transportation routes. When building contract portfolios, one should take into account the reliability of delivery and the existence of demand that is difficult to reduce or replace with other energy sources.
According to the analyst’s assessment, in a situation where supplies may suddenly cease, the reliability of supply is no less important than the price of the gas being purchased.