Qatar halts production + Hormuz blockade, is this natural gas crisis repeating 2022?

Qatar’s liquefied natural gas (LNG) production suddenly halted, the Strait of Hormuz is nearly at a standstill, and global energy markets face a rare double shock. Asia’s LNG price benchmark JKM surged more than 50% in a single day, European natural gas prices rose in tandem, and concerns about whether this crisis will replay the 2022 Russia-Ukraine energy shock have sharply increased.

WallstreetCN previously mentioned that after Iran launched an attack on Qatar’s Ras Laffan core production facilities, QatarEnergy officially announced the suspension of LNG production. At the same time, oil tanker traffic in the Strait of Hormuz was widely obstructed, impacting the transport of oil, refined products, and LNG. JKM prices then soared to about $16–$17 per million BTU. According to WindChasing Trading Desk, Morgan Stanley's Devin McDermott team released a report on March 2nd, stating that the price rise is in line with market expectations of a brief 1-2 week disruption, and the current level is slightly higher than the peak during the June 2025 "Twelve-Day War."

In terms of supply loss, the potential scale of this shock may exceed 2022. According to calculations by the Financial Times, Russia cut about 80 billion cubic meters per year of supply to Europe in 2022, but this time, the actual blockade of the Strait of Hormuz, combined with the shutdown of two Israeli gas fields, means a potential shortfall of about 120 billion cubic meters per year. However, price-wise, it’s still far from 2022—Europe’s natural gas benchmark price recently is about 48 euros per megawatt-hour, while the peak in 2022 was over 343 euros per megawatt-hour.

The duration will be the key variable determining the ultimate severity of this crisis. Argus Media analyst Natasha Fielding said if the interruption lasts a long time, its impact could rival 2022; but “if this is just a one-week temporary shock, it’s incomparable to the historic turning point in 2022.”

Qatar: Sudden Halting of 20% Global LNG Supply

Qatar is the world’s second-largest LNG exporter, exporting about 80 million tons annually, around 20% of global supply, mostly to Asian markets. After Ras Laffan facilities were attacked, all production was halted.

Qatar’s LNG exports are highly reliant on sea transport; pipeline exports are minimal. Only Oman on the Arabian Peninsula also has export facilities, and its terminals are on the opposite side of the Strait of Hormuz, meaning shipments can proceed even if the Gulf passage is blocked.

Although LNG accounts for only 7-8% of global natural gas supply, it is a key marginal supply for many countries and has a decisive impact on prices. Andreas Schroeder, Head of Energy Analytics at ICIS Commodity Research Group, said:

"Any event impacting the global LNG market will often affect natural gas prices in markets like Europe and Asia."

Hormuz: A Throat for 20% of Global LNG Flow

According to Morgan Stanley citing Vortexa data, about 20% of global LNG flows pass through the Strait of Hormuz, with about 70% heading to Asia and about 10% to Europe. If the strait is continuously blocked, its impact will far exceed the interruption from Qatar alone.

Oxford Institute for Energy Studies modeling shows long-term blockade of the Strait of Hormuz would cause a net loss of about 86 billion cubic meters of LNG globally, about 15% of global supply in 2024.

The economies most directly impacted are those highly dependent on LNG. According to Kpler Insight tanker tracking data, 99% of Pakistan’s LNG imports in 2025 are from Qatar and UAE; India and Bangladesh rely on these two countries for over 50%. In Europe, about one-third of Italy’s LNG comes from Qatar—Italy’s cabinet ministers convened an emergency meeting with major corporate groups this Monday. EU spokeswoman Anna-Kaisa Itkonen said, there is "no shortage and no emergency" at present.

In the UK, since the Russia-Ukraine conflict, imports have shifted rapidly to the US; only 1.9% of natural gas imports in 2024 come from Qatar, so the crisis’s direct impact is relatively limited there.

Short-Term Supply Gap Hard to Replace

Global LNG liquefaction facilities are now operating at full capacity, with almost no flexibility. According to Morgan Stanley data, global liquefaction utilization reached 94% in February 2026, up from 89% a year ago and the five-year average of 88%.

Anne-Sophie Corbeau, Global Research Scholar at Columbia University’s Center on Global Energy Policy, pointed out that no new capacity can quickly fill the gap short-term: "Any new capacity coming online will be a gradual process." The US Golden Pass project (jointly supported by QatarEnergy and ExxonMobil) is expected to start this year, but it will take time for capacity to ramp up, so its short-term impact is limited.

For pipeline gas, Russia’s ability to supply via existing pipelines is close to its limit. Whether Europe delays its remaining Russian gas exit plan is still undecided—regulations allow for exceptions to postpone exits in case of a serious energy security threat. S&P Global Energy's Director of Asia Gas Research, Chong Zhi Xin, warned that if gas prices stay high, some markets may shift to coal-fired power.

Beneficiaries: US Exporters Take Profits from High Prices

In this crisis, US LNG exporters are the most direct beneficiaries. The US is the largest LNG exporter in the world, with most contracts on a "FOB" basis—cargoes are not tied to fixed destinations, allowing traders to flexibly redirect supply to higher-priced markets.

Schroeder said: "US exporters are clearly benefiting—they are now making big profits. They are eating into Qatar’s market share, which is a main competitor in LNG." According to Argus Media’s Natasha Fielding, Norway, Algeria, Azerbaijan and other exporters will also benefit.

At the same time, as competition for available LNG heats up, sellers’ motivation for default/arbitrage grows—the potential gains could far exceed penalties for default.

Three Scenarios: Crisis Path Depends on Duration

Morgan Stanley outlines three price scenarios in its report.

Base scenario (Quick De-escalation): Morgan Stanley believes the disruption will be brief. As tensions ease, JKM will fall back to $10–11 per million BTU, then drop further below $10 over the coming months, consistent with previous forecasts. Fundamentals are loose—peak winter demand has passed, March weather forecasts are mild, and the first Golden Pass LNG cargoes are about to launch.Extended scenario (2–4 weeks): If disruptions last longer than expected, prices could quickly surge to the $20–$30 per million BTU range.Extreme scenario (Several Months): If Qatari supply is halted long-term, the impact would rival the Russia-Ukraine crisis of 2022—annual average LNG prices in 2022 were about $34 per million BTU, with peaks near $70. Notably, current JKM is near diesel parity—this price level usually triggers demand contraction among price-sensitive markets, somewhat limiting further price increases.

Historical experience shows that similar short-term shocks usually quickly reverse after supply resumes. During the labor dispute at Australia’s Gorgon and North West Shelf facilities in August 2023, JKM rose about 27%, but quickly gave it all back; in the June 2025 “Twelve-Day War”, JKM rebounded about 30% from the lows, and then quickly corrected. Morgan Stanley notes that the Trump administration’s current stance favors rapid de-escalation of the conflict, which is a key basis for maintaining the base scenario judgment.

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The above highlights are from WindChasing Trading Desk.

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