Rystad Energy: LNG Importers Face $39 Billion Cost Hike for Less Volume in 2026
Middle East disruptions will push global LNG portfolio costs to $256 billion, forcing buyers to secure 60.7 million tonnes less supply at higher prices, Rystad Energy forecasts.
Global LNG Costs Surge
Global liquefied natural gas (LNG) importers are set to spend an additional $39 billion in 2026, despite purchasing 60.7 million tonnes less supply, Rystad Energy forecasts. Total portfolio costs are projected to reach $256 billion, an 18% increase from a pre-conflict estimate of $217.8 billion.
Disruptions to Qatari and UAE exports through the Strait of Hormuz are compelling buyers to secure replacement volumes at elevated prices. Rystad Energy’s analysis assumes Qatari and UAE LNG deliveries will be unavailable from March through the end of 2026.
Europe's Higher Exposure, Asia's Resilience
Europe faces the most substantial cost increase, with its LNG bill rising by at least $12 billion, or 18%. This occurs even as European demand is expected to fall by 24 million tonnes. The region was already heavily reliant on spot market purchases before the current crisis, limiting its flexibility.
Europe is also expected to lose 20.6 million tonnes of the 24.7 million tonnes of Qatari LNG initially scheduled for 2026. In contrast, East Asia is better prepared for the supply disruption. Its broader portfolio of contracts outside the Middle East and lower LNG demand help mitigate exposure.
Contract Structures Drive Regional Divergence
East Asia's resilience stems from its contract pricing terms, Rystad Energy research shows. About 82% of the region's long-term LNG contracts are linked to oil prices, which have increased significantly less than spot LNG rates. These oil-linked contracts show a 28% price rise, compared with a 72% jump for contracts tied to hub and spot price benchmarks.
Europe's average LNG price has climbed 47%. The continent procures approximately 65% of its LNG on the spot market, with only about a quarter of its long-term agreements indexed to gas prices, making it more susceptible to market volatility.
Strategic Adjustments for Asian Importers
For Asian importers, Rystad Energy suggests assessing exposure to supply disruptions alongside price risk. Building contract portfolios around reliable delivery routes and demand that cannot easily be replaced is crucial. Diversifying pricing benchmarks can help manage costs, but it does not guarantee physical supply.
Expanding US liquefaction capacity offers opportunities for Henry Hub-indexed supply, but also links global LNG demand more closely to the US gas market. Importers should evaluate if the current cost advantage of Henry Hub-indexed contracts will persist over the full contract term.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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