A disruption of nearly 80 million tonne per annum (mtpa) of Gulf LNG exports, alongside a 20 billion cubic metre (bcm) drop in global gas output and a 4% fall in Asia’s LNG imports to a seven-year low, has triggered one of the sharpest shocks to global gas markets in recent years, hitting supply, trade and demand simultaneously.
Asia has borne the brunt of the disruption. LNG imports declined 4% year-on-year to 21.1 million tonnes (Mt) in March 2026, marking the lowest level for the month since 2019, reflecting the region’s heavy reliance on Gulf supplies routed through the Strait of Hormuz.
According to the Gas Exporting Countries’ Forum’s (GCEF) April 2026 gas market report, global LNG trade has contracted under pressure, with imports falling 1.7% year-on-year to 36.3 Mt — the first decline since January 2025, while exports dropped a sharper 6.8%.
Sharp fall in production drives supply shock
The supply shock has been driven by a sharp fall in production. Global gas output declined by around 20 bcm in March due to LNG export halts in Qatar and the UAE, reduced associated gas output from oil field shutdowns in Saudi Arabia, Iraq and Kuwait, and infrastructure damage in Iran.
On the demand side, consumption has weakened, particularly in Asia. “Global gas consumption is estimated to have decreased in March 2026, driven by weaker demand across Asia where LNG supply disruptions and surging spot LNG prices triggered a shift toward other energy sources, in particular coal and renewables,” the GCEF report said.
Despite the scale of disruption, price escalation has remained relatively contained compared to past crises. Month-ahead gas prices peaked at $19/MMBtu in April 2026, significantly lower than the nearly $70/MMBtu recorded during the 2022 Ukraine crisis, indicating improved resilience in global markets.
Volatility remains elevated
However, volatility remains elevated. “Regional spot prices surged amid the escalating conflict in the Middle East,” the report noted, with European TTF prices rising 58% month-on-month to $17.8/MMBtu, while North East Asia spot LNG prices jumped 94% to $20.9/MMBtu, reflecting tighter supply-demand balances.
The report also highlighted the role of inventories in cushioning the shock. “Storage withdrawals and the arrival of LNG cargoes loaded in February helped cushion the immediate shortfall,” it said, even as European storage levels dropped to 30 bcm (29% of capacity) and US storage stood at 53 bcm (39% of capacity).
Separately, Wood Mackenzie analysis shows that the disruption matches the scale of the 2022 Russia gas curtailment into Europe, but its price impact has been moderated by structural shifts in power markets and supply additions.
Wholesale power prices across Europe’s five major markets averaged just over €90/MWh in March 2026, largely unchanged year-on-year and well below the €280/MWh recorded during the initial phase of the Ukraine crisis, reflecting reduced dependence on gas.
“The Ukraine war illustrated for Europe the benefits of diversifying away from volatile fossil fuels,” said Peter Osbaldstone, Research Director, Europe Power at Wood Mackenzie. “Battery storage and renewables set prices with increasing frequency, reducing the influence of gas.”
With supply disruptions, falling trade and shifting demand patterns converging, the LNG shock underscores both the vulnerability of global energy systems to geopolitical risks and the growing role of diversification in cushioning price shocks.