LNG market under pressure: the Middle East crisis has spilled over from the security sphere into contracts, deliveries, and prices
The news that Shell has declared force majeure for some customers taking Qatari liquefied natural gas has further unsettled the global energy market and confirmed what analysts have been warning about since the start of the new Middle East escalation: in the world of gas, geopolitical shocks are now transmitted almost instantly, from military risk and attacks on infrastructure to commercial contracts, available cargoes, and final energy costs. When Qatar, one of the most important pillars of global LNG trade, is disrupted, the consequences do not remain limited to the Persian Gulf. They are felt by European importers, Asian utilities, industry, traders, shipowners, insurers, and governments trying to protect consumers from a new energy shock. That is precisely why Shell’s decision is not merely a legal formula from contractual clauses, but a signal that the crisis has entered an operational phase and that the market is no longer assessing only the possibility of disruptions, but also their real consequences.
How the crisis hit the centre of global LNG trade
Qatari state producer QatarEnergy announced on 4 March that it was declaring force majeure for affected customers following a previous suspension of production of liquefied natural gas and related products. This officially confirmed that the problem is not only one of heightened uncertainty or more difficult transport, but of the very ability to fulfil contractual obligations. A few days later, on 11 March, Reuters and Bloomberg reported that Shell too, the world’s largest LNG trader, had declared force majeure for some customers of Qatari LNG that it buys from QatarEnergy and resells around the world. The news increased nervousness because it shows how a disruption from a primary exporter quickly spreads through the trading chain, towards Asian and other buyers who may not even formally have a direct contract with the Qatari producer.
The problem is all the greater because Qatar is much more than just another large exporter. QatarEnergy LNG operates 14 liquefaction trains and an annual capacity of 77 million tonnes, while the U.S. EIA and several market analyses remind that Qatar is among the key pillars of global supply. According to estimates most frequently cited on the market today, around one fifth of global LNG trade is linked to Qatar and the route through the Strait of Hormuz. The U.S. EIA further states that in 2024 around 20 percent of global LNG trade passed through that strait, predominantly from Qatar. In other words, this is a point where production and transport risk meet, and that is the worst possible combination for a market that depends on reliability, the pace of loading, and precise delivery timing.
Why Shell’s decision matters, even when production does not stop equally everywhere
In the energy market, the concept of force majeure is not just a technical addition to a contract. When it is activated by such a large trader as Shell, the message to customers and competitors is that the disruption is serious enough to call into question deliveries that had already been included in supply, consumption, and possible resale plans. This particularly affects Asia, where Qatari LNG traditionally relies heavily on long-term contracts and where most Qatari shipments end up. Reuters’ reports that more than 80 percent of Qatari LNG buyers are in Asia explain why reactions there were so sensitive: Japan, South Korea, India, China, and Pakistan are watching not only exchange prices, but also the physical availability of cargoes in the coming weeks and months.
At the same time, Europe does not depend on Qatar to the same extent as parts of Asia, but because of the global nature of LNG trade, it too pays the price of such disruptions. European markets do not buy only Qatari gas, but buy gas on a market in which every lost Qatari cargo turns into new competition for American, African, Norwegian, and other sources. When Asia, which is often ready to pay a premium for secure delivery, increases purchases of alternative cargoes, Europe must respond with a higher price or risk slower storage filling and more expensive preparation for the next winter. In that sense, Shell’s decision is important not only because of the volumes that trader covers, but because of its psychological effect on the entire market: it confirms that there is no longer talk of hypothetical risk, but of the activation of protective mechanisms in contracts.
Gas prices reacted immediately, and volatility is spilling across continents
The price reaction was strong already after the Qatari production suspension at the beginning of March. On 2 March, Euronews reported that the benchmark European TTF at one point jumped by as much as 45 percent, to around 46 euros per megawatt-hour, which was one of the strongest daily moves in the more recent period. A few days later, the Wall Street Journal noted that European gas prices continued to rise and at the beginning of this week were moving above 60 euros per megawatt-hour, almost twice as much as before the outbreak of the latest war escalation. Although these levels are still far from the extreme peaks seen after the Russian invasion of Ukraine in 2022, the very speed of the change warns how sensitive the market has remained to geopolitical shocks even after years of adjustment.
In Asia, the pressure is even more direct because Qatari LNG has greater physical weight in supply there. Spot LNG prices in the Asian basin traditionally react to any doubt about the availability of Qatari cargoes, and now, in addition to production risk, there is also the problem of passage through the Strait of Hormuz, insurance, and ship schedules. In its 2025 reports, the IEA was already warning that any more serious disruption of Qatari and Emirati deliveries would intensify competition for spot volumes and create strong upward pressure on prices in Europe and Asia. This is exactly the scenario now unfolding before the market’s eyes: traders are building in a security premium, buyers are seeking alternative sources, and every new piece of news from the region triggers additional price corrections.
The Strait of Hormuz as a bottleneck of global energy trade
One of the reasons why the LNG market reacted so sharply is the fact that the crisis is not limited to a single plant. Alongside attacks and security threats to infrastructure, the market is also watching the situation in the Strait of Hormuz, one of the most important energy corridors in the world. The U.S. EIA states that in 2024 around one fifth of global LNG trade passed along that route. That means the problem may not only be whether Qatar produces enough gas, but also whether that gas can be safely loaded, insured, set sail, and arrive at the customer on time. When traffic slows down, when insurers raise war-risk premiums, or when shipping companies start avoiding the route, supply may formally not be completely interrupted, but it becomes more expensive, slower, and less predictable.
This is especially important for LNG because it is a market that functions on a precise schedule. Ships, terminals, and buyers depend on exact loading and unloading windows, and every delay can cause a chain effect. One cargo arriving late does not mean only a problem for one buyer, but also a disruption in the schedule of subsequent deliveries, less fleet flexibility, and a higher cost of rerouting ships. That is why the geopolitical crisis works not only through headline war news, but also through a series of market details that end consumers usually do not see: ship availability, insurance levels, terminal status, the amount of free gas on the spot market, and traders’ estimates of how long the disruption may last.
Europe is more resilient than in 2022, but not immune
The European Union entered this crisis better prepared than in the period after the outbreak of the war in Ukraine. In the meantime, the Commission and the member states have increased LNG reception capacities, diversified supply, introduced stricter storage filling rules, and reduced dependence on Russian gas. The European Commission and the Council of the EU continue to insist on the goal of storage facilities being 90 percent full before winter, and that framework has been extended in order to preserve resilience to market shocks. According to data from the Council of the EU, storage levels across the Union on 8 March 2026 were significantly lower than at the same time in previous years, which means that the upcoming filling season will be sensitive to every price spike and every shortage of available LNG cargoes.
This is the key point for European governments and industry. The market can survive a short-lived price spike if storage facilities are still relatively full and if calming of the situation is expected. But if elevated prices persist in the period when Europe must intensively buy gas for the winter of 2026/2027, then the problem becomes far greater than daily stock-exchange fluctuations. Then it enters into the cost of electricity, the competitiveness of industry, the budgetary room for household support, and the political debate about whether the market should be intervened in again. The Financial Times is already noting that Brussels is once again discussing options for limiting or mitigating the price shock on the gas market if the crisis drags on.
Asia is more directly exposed, and the consequences are felt outside energy as well
While Europe feels most of the blow through prices and competition for alternative cargoes, Asia is more exposed also because of the structure of its imports. Qatari LNG has long been the foundation of supply for a number of Asian economies, especially those that do not have their own larger gas sources or want long-term stable contracts at a relatively competitive price. That is why any restriction from Qatar does not mean only more expensive gas, but also more complex management of power systems, industrial consumption, and fiscal pressures. In countries that still heavily subsidise energy or are sensitive to import prices, such a shock can quickly turn into a broader inflation problem.
The consequences do not stop with gas. Higher energy costs spill over into fertilisers, petrochemicals, transport, shipping, and the production cost of a range of industrial products. The costs of ship insurance and transport prices are also rising, which further increases the total bill for imported energy. For countries such as Japan and South Korea, which have developed LNG systems and high exposure to maritime routes, the security of passage becomes just as important as the price of the molecule itself. In India and Pakistan, an additional problem is that more expensive spot gas can quickly collide with the sensitivity of consumers and distributors to price, so some demand may be destroyed or postponed.
What the market now expects from producers, traders, and governments
In such a situation, the market is not looking only for new production, but above all for reliability and information. Buyers want to know how long the disruption will last, when Qatari facilities might normalise operations, how much of the traffic through Hormuz can be safely restored, and how much additional LNG other producers, above all the United States, will offer to the market. In its medium-term estimates, the IEA reminds that the second half of the decade should bring a new wave of LNG capacity, but that structural growth does not solve the immediate problem if the geopolitical shock is happening now, in the middle of a period when the market still depends on existing supply routes and a limited number of flexible cargoes.
For governments, that means a dual task. The first is short-term: to ensure that the market has enough physical supply, that storage facilities follow the filling plan, and that any price shock does not grow into a social and industrial problem. The second is long-term: to reduce the system’s vulnerability through diversification, efficiency, renewables, grids, storage, and better demand management. This crisis is a reminder that energy security is not only a question of the quantity of gas, but also of where the gas comes from, which routes it passes through, under which contractual conditions, and how quickly the economy can adapt when one major supply route becomes unstable.
Signal for the rest of the year: energy remains a top-tier geopolitical story
The most important message of the developments surrounding Qatari LNG and Shell’s force majeure is that the energy market, even four years after the European gas crisis, has not entered a period of real comfort. The system is more robust, more diverse, and institutionally better prepared than in 2022, but it still remains exposed to shocks at points that are too large for the market simply to bypass. Qatar, Ras Laffan, and the Strait of Hormuz are precisely such points. When a problem arises there, the price of gas does not rise only because one shipment is missing, but because part of the confidence in the predictability of the entire supply chain disappears.
That is precisely why Europe and Asia are now carefully following every new signal from the region, from the security situation and plant operations to the decisions of traders and insurers. If the disruptions prove short-lived, the market could gradually recover some of the lost calm, although with more expensive gas than had been expected at the beginning of the year. If, however, the crisis drags on or spreads to traffic through Hormuz and other export points in the Persian Gulf, the energy bill for the rest of 2026 could become one of the key economic issues for both Europe and Asia. Shell’s force majeure is therefore more than a single corporate notice: it is a reminder that on the global LNG market, the boundary between a military crisis and a household energy bill can be crossed in just a few days.
Sources:- QatarEnergy – official announcement on the declaration of force majeure after the suspension of LNG production and related products (link)- Reuters / Yahoo Finance – report that Shell on 11 March 2026 declared force majeure for some customers of Qatari LNG (link)- U.S. Energy Information Administration – overview of Qatar’s gas sector and LNG export capacity (link)- U.S. Energy Information Administration – data that around 20 percent of global LNG trade in 2024 passed through the Strait of Hormuz (link)- Euronews – report on the jump in European gas prices after the Qatari production suspension on 2 March 2026 (link)- Wall Street Journal – report on the further rise in European gas prices above 60 euros per megawatt-hour at the beginning of the week (link)- European Commission – EU rules and target on 90 percent gas storage filling before winter (link)- Council of the European Union – overview of EU gas storage filling levels as of 8 March 2026 (link)- IEA – medium-term gas market analysis and estimates on stronger competition between Europe and Asia for LNG and the impact of possible disruptions in the Gulf (link)
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