War vs. Glut: The Great LNG Reckoning
War shut in one of the world’s most critical export arteries. The long-promised supply wave is finally arriving. Which force wins, when, and by how much?
The global LNG market has entered a phase of extreme uncertainty where lazy narratives go to die.
For years, the consensus trade was simple: a wall of new supply was coming. The United States, Canada and Qatar would flood the market, loosen balances and drag prices lower. Then war arrived, the Strait of Hormuz slammed shut, two Qatari trains were blown up, and that clean, comforting story of abundance collapsed under the weight of a destabilising global reality.
Now the market is being asked to price two opposing truths at once.
On one side sits an extraordinary wartime supply shock, with Gulf exports constrained and uncertainty hanging over every vessel movement, repair schedule and diplomatic headline. On the other sits a vast queue of LNG projects that still promises to reshape global gas balances, albeit on capital-intensive infrastructure timelines rather than cable-news timelines.
That tension is now the market. So we built a tool to measure it.
Today, Energy Flux launches the Hormuz Closure LNG Supply Impact Model: a premium scenario engine that allows readers to quantify the collision between lost Middle East supply and incoming global LNG capacity using their own assumptions, intelligence and market judgement.
The Base Case: ugly, slow, and structurally tight
Start with the default assumptions and the conclusions are stark.
Under the Energy Flux base case, Hormuz only partially reopens in September, damaged Qatari capacity remains offline for four years, and new projects continue to ramp at a realistic rather than miraculous pace.
Result: the supply hole is not repaired quickly.
The model indicates that lost export capacity linked to the closure is not replaced until January 2029. That is the point at which new non-Hormuz LNG capacity additions finally match the annualised capacity removed from the system.
That sounds reassuring until you look at cumulative volumes. Markets do not consume nameplate capacity; they consume molecules. And cumulative lost supply compounds every day the disruption persists.
Roughly six weeks into the conflict, the physical shortfall already runs to more than 10 million tonnes. If current conditions drag into winter, the missing volume becomes systemically meaningful: more than 55 mt, or more than 13% of total worldwide LNG trade in 2025.
If disruption endures, the cumulative deficit stretches deep into the 2030s. Without a swift resumption in Middle East LNG exports, it could take the best part of a decade for new projects to fully offset lost supply that’s been deepening since the US and Israel began their assault on Iran.
This is the part most commentary misses: even when replacement capacity starts arriving, it first has to dig the market out of the crater that is deepening every day the war and blockade drag on.
The optimistic take: a slow reversal of misfortune
But all this could change in an instant.
Geopolitical machinations are casting a deep pall of uncertainty over the market. The conclusions above are based on assumptions that could quickly be overtaken by events – which is why the Hormuz Closure LNG Supply Impact Model was designed to be adapted by users based on their reading of the highly fluid situation in the Middle East.
For example, if Hormuz transits are restored to 80% of pre-war averages by August 2026, the damaged Ras Laffan trains are repaired within three years, and the entire global LNG supply wave is accelerated by six months, then the picture changes dramatically.
New capacity additions would replace lost Hormuz-dependent liquefaction as early as March 2027…
… and the cumulative physical supply loss from Hormuz closure could be completely eliminated by May 2028.
Plaquemines has begun shipping the first of (hundreds of?) commissioning cargoes. LNG Canada is moving toward steadier utilisation after early technical friction. Golden Pass, Corpus Christi Stage 3 and others remain key pillars of the next growth cycle.
But none of that means the market is suddenly comfortable. Projects ramp in phases, trains can slip, utilisation rises slowly, feedgas constraints emerge. Commissioning cargoes make headlines but do not instantly rebalance the planet.
Meanwhile, the disruption side of the ledger is enormous.
Around 83 mtpa of nameplate capacity in Qatar and the UAE sits inside the Hormuz risk envelope. Included within that is 12.8 mtpa of Qatari liquefaction capacity damaged in the March strikes, with a multi-year repair timeline assumed in the base case.
So yes, new supply is arriving. But whether it will arrive fast enough to erase a war is, at best, highly debatable.
The thick fog of an unwinnable war
After the failure of Friday’s peace talks, the shaky ceasefire between the US, Israel and Iran looks set to collapse at any moment. Yesterday, the Trump administration imposed its own embargo on vessels transiting the Strait of Hormuz to access Iranian ports, in an attempt to starve Tehran of oil revenue.
Highly provocative towards China, this new blockade raises myriad questions around enforceability and credibility. Will US warships really open fire on China-bound oil tankers laden with Iranian crude? Having started this maddening and unwinnable war, will the US finally acknowledge the untenability of its position with a grand capitulation? Or is there another move yet to be made to allow Washington to maintain pressure and save face against an adversary that has proven surprisingly tenacious in the face of unprecedented aerial bombardment?
This wild game of brinkmanship is throwing into stark relief the many ‘known unknowns’ circling Hormuz and the future of Gulf energy exports. In this fog-of-war market, the only certainty is low information, high stakes, and constant narrative whiplash.
Until 1 March 2026, it seemed that the long-anticipated global LNG supply wave was finally about to break, only for a poorly-planned geopolitical war of choice to scupper that outlook. Overnight, the dominant narrative flipped from ‘LNG glut incoming’ to ‘unprecedented LNG supply shock’, leaving many observers dizzy and confused.
Faced with diametrically opposed ‘structural supply glut’ and ‘worst-case scenario supply shock’ realities, the number one question that Energy Flux readers have been asking is: how far, and how soon, can new global supply additions offset lost Hormuz volumes?
The Hormuz Closure LNG Supply Impact Model aims to answer that question by giving readers a disciplined framework for testing scenarios. Change the assumptions, watch the supply path retrace, and understand which variables actually matter.
What the tool lets you model
The engine comes pre-loaded with an Energy Flux base case, but it is built to be challenged.
Users can adjust Middle East disruption variables:
- Hormuz restoration date
- Percentage of flows restored after reopening
- Inclusion or exclusion of Oman in the disruption baseline
- Repair timing for damaged Ras Laffan Trains 4 and 6
- Qatar North Field East first LNG timing
- The interaction between reopening logistics and stranded Qatari capacity
Users can also rework core global LNG supply wave variables:
- Project-by-project edits
- Nameplate capacity changes
- First LNG dates
- COD timelines
- Full-capacity ramp dates
- Utilisation assumptions
- Risk classifications
- Ramp profiles
- Global acceleration or delay factors applied across the queue
In short: you can model your own market, not ours.
⚙️ If you believe diplomacy restores 80% of flows by August, test it.
⚙️ If you think construction bottlenecks delay half the US Gulf queue, test it.
⚙️ If you think Qatar recovers faster than advertised, test it.
⚙️ If you think everything slips and everyone is frankly lying, test that too.
Why this matters now
The geopolitical backdrop remains absurdly unstable.
Ceasefires are partial at best, second-order threats are multiplying, and Washington is improvising coercive measures with unclear credibility. Tehran remains damaged but far from broken. China’s role looms over maritime enforcement. Every actor is posturing, none is fully in control, and energy markets are forced to price a situation that nobody fully understands.
The old narrative of ‘LNG glut incoming’ has not vanished. It has collided with ‘historic supply shock’.
Both forces are live. Neither can be understood in isolation. That is precisely why this tool matters.
A clarion-call for clarity
The delta of uncertainty is so great that it creates space for motivated reasoning. Anyone with an opinion or agenda can influence how people think about what’s happening in the LNG space based on shaky assumptions, or worse.
The LNG market does not need louder opinions. It needs better frameworks.
The Hormuz Closure LNG Supply Impact Model is designed to do exactly that: turn chaos into scenarios, convert narratives into numbers, and help serious market participants think more clearly at the moment clarity is in shortest supply.
The base case is provocative. Your own assumptions may be better. There is one way to find out.
Subscribers can access the model right now on the Energy Flux platform. Just click here, log in, stress-test your view of the market, and see when, where and how the market balances.
Seb Kennedy | Energy Flux | 14 April 2026
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