US at full capacity as Hormuz crisis squeezes global LNG, prices surge
Dubai: The closure of the Strait of Hormuz is rippling through global energy markets, choking off a critical supply of liquefied natural gas (LNG) and exposing a hard limit: Even the world’s top exporter, the United States, cannot step in to plug the gap, The New York Times reported.
A two-month halt in LNG shipments from Qatar — one of the world’s largest suppliers — has triggered a sharp surge in prices across Europe and Asia, intensifying pressure on economies heavily reliant on imported gas for power, heating and industry, according to the report.
The disruption marks the second major shock to global gas markets in less than five years, after Russia curtailed pipeline supplies to Europe following its war in Ukraine in 2022. While US exports helped cushion that blow, analysts say this crisis is different — and potentially more severe.
“All of the LNG exported from the US is already at full capacity,” Massimo Di Odoardo of Wood Mackenzie was quoted as saying.
Since the Iran war began in late February, LNG prices in Europe and Asia have surged to as much as six times US domestic gas prices, highlighting a tightening market with limited alternatives.
Hormuz choke — LNG flows & shortage
About 20% of global LNG trade passes through the Strait of Hormuz
Qatar halt: Shipments paused for ~2 months
Ras Laffan damage: ~17% capacity hit
US exports: About 18 billion cubic feet/day (near full capacity)
Price surge: Up to 6x US gas prices in Europe/Asia
Supply gap: No immediate replacement for lost Qatari LNG
Bottom line: Global LNG supply is tight, with limited spare capacity to offset disruptions.
Situation worsens
At the centre of the crisis is the Strait of Hormuz, a key maritime chokepoint through which roughly 20 per cent of global LNG supplies pass. With shipping disrupted and vessels stalled, the flow of energy from the Gulf has slowed sharply.
The situation worsened after Qatar halted production at its Ras Laffan facility, one of the world’s most important LNG hubs, with missile strikes damaging about 17 per cent of its capacity, the report said.
Even as US energy firms expand export capacity, new LNG terminals — mainly along the Gulf Coast — take years and billions of dollars to build. Several projects are underway, but analysts warn they will not come online fast enough to offset prolonged disruption.
That leaves major importers — from Italy to Taiwan and South Korea — scrambling to secure supplies or switch to alternative fuels. Some may be forced to ration energy, while others are accelerating investments in renewables and storage.
Natural gas accounts for roughly a quarter of global energy consumption and remains critical for electricity generation and industrial use, especially as countries transition away from coal.
The United States exported nearly 18 billion cubic feet of LNG per day in March, close to record levels, with output expected to grow further. However, analysts caution that even rising US exports will not be enough if the Hormuz disruption persists.
The broader concern is structural. Damage to Qatar’s export capacity and delays to new projects could push back global supply growth by years, keeping prices elevated.
For energy-importing regions like Europe and much of Asia, the message is stark: the global LNG safety net is stretched thin — and the current crisis is forcing countries to rethink their dependence on the fuel.
