Why does Shell expect LNG supply to be flat in 2026, and what specific event triggered this forecast?

Shell expects global liquefied natural gas (LNG) supply to be flat year-on-year in 2026 — ending over a decade of growth — due to supply disruptions caused by the Middle East conflict, particularly the closure of the Strait of Hormuz. The forecast, published in Shell’s LNG Outlook 2026, assumes the strait will reopen this summer; however, even then, LNG facilities — including Qatar’s Ras Laffan complex, where Shell holds an equity stake and which was struck by Iranian missiles in March — will require six to eight weeks to ramp up operations after restart. The missile strikes damaged multiple production units at Ras Laffan and also affected Shell’s Pearl gas-to-liquids facility in Qatar, both of which remain offline, contributing directly to the projected supply stagnation.

What is Shell’s outlook for LNG supply beyond 2026, and how does it differ from other major energy analysts?

Shell forecasts LNG supply will return to growth in 2027, marking a clear inflection point after the flat performance expected in 2026. This outlook contrasts with those of Vitol Group and the International Energy Agency, which anticipate LNG supply constraints will persist for approximately two more years — implying tightness extending into 2027 or beyond. Shell’s more optimistic 2027 recovery projection hinges on the assumption that the Strait of Hormuz reopens this summer and that damaged infrastructure, especially in Qatar, can be restored and brought back online within the estimated six- to eight-week ramp-up window following restart authorization.

Shell Sees LNG Trade Flat in 2026 as Hormuz Chokes Supply

Jun 30, 2026

Shell forecasts global LNG supply will remain flat in 2026 due to Middle East tensions impacting the Strait of Hormuz, with potential contraction if closures persist. Recovery to growth is expected by 2027 following damage to Qatar's production facilities.

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