The LNG revolution should continue, despite the setback due to the Strait of Hormuz blockades. The setback in 2026 should be temporary, and followed by a boom in global LNG markets through 2050, according to a new report by Oil and Gas Journal. This picture buttresses the current growth in LNG investment in the U.S. at a time when competitive suppliers like Qatar have been hit by missiles and drones from Iran.
Global Market in LNG.
The global market in LNG climbed to a record 437 million tonnes in 2025. This was a 6.3% growth year-over-year and the most rapid growth since 2022.
Global investment in LNG liquefaction terminals kept up with the market, with the largest growth in capacity being on the U.S. Gulf Coast. But the Iran war has taken Qatar and UAE out of the market for a time, and this represents 16% of worldwide liquefaction. War damage at the Ras Laffan site in Qatar will reduce supply by almost 13 million tpy (tonnes per year) over the next 3-5 years. This is serious damage.
Shell PLC have suggested if the Strait of Hormuz blockade continues, global LNG trade might contract for both 2026 and 2027, which has not happened in the past strong decade of growth. How has the Asia-Pacific region, which has been hurt the most by the Iran war, responded? They have drawn down gas storage, switched to other fuels like coal, and installed curtailment measures. Meanwhile LNG tankers have been rerouted from Europe to the Asia-Pacific region to fill the need.
Long-Term Picture.
The volatility in LNG is hopefully short-term, says the Oil and Gas Journal. They quote Shell arguing that LNG demand will remain strong through 2050, as consumption of LNG will rise by 65% to 700 million tpy. As expected, the main driver for this will be economic growth in South Asia and Southeast Asia.
The international Gas Union (IGU) is even more aggressive in its growth prediction. They expect LNG supply capacity to shoot up to 700 million tpy by 2030, not 2050.
Laying these forecasts side by side, the future looks secure for LNG, which is currently adding to its capacity along the U.S. Gulf Coast. The LNG revolution in the past decade has been remarkable for the U.S., given it was unlawful to export LNG before 2016. But how long can this quasi-exponential acceleration continue? And will funding entities keep on investing in U.S. LNG?
LNG exports to 43 different countries are projected to reach 120 million tpy in 2026. What about export revenue? Annual export revenues exceed $60 billion based on recent pricing conditions. Government entities at all levels benefit from $8.2 billion in annual tax receipts.
The China Threat.
But two insightful analyses might temper the accelerated growth of LNG. First, a Reuters report discusses electricity suppliers needed to cover new global data centers (which has created its own revolution). They find solar and battery storage renewables will command a dominant position over natural gas, as judged by energy executives across the world.
Second, an Ember report states that a hybrid of solar PV and batteries is right now cheaper than LNG in three-quarters of Asian districts which are/were planning on gas-fired electricity power. By 2030, Ember predicts such hybrids will win over LNG across all of Asia.
This may give pause to further expansion of LNG terminals in the U.S. Such terminals cost more than a billion dollars each, with a large-scale terminal requiring $15- $25 billion in total construction costs. The market life is expected to be 10-20 years.
If Asian countries decide to accelerate using cheaper Chinese renewables, their demand for U.S. LNG may slump. This could be a harbinger of a new age of renewable power in Asia, one which might reduce imports of LNG by those countries.
