Australian LNG: Between Opportunity and Risk – How the Iran War Changes the Gas Market

The global liquefied natural gas market is under considerable pressure. While the Iran war disrupts supply routes in the Middle East, a weeks-long outage at an Australian LNG facility exacerbates an already tense situation. Price movements show the drama: LNG has increased by 68 percent since the start of the war, according to a recent analysis by management consultancy Roland Berger. For comparison: oil prices have risen by 47 percent over the same period.

Key Findings

• LNG prices rose 68 percent since the start of the Iran war, according to Roland Berger analysis
• Australian LNG facility accounting for 2.4 percent of global trade volume was out for weeks in March 2026
• UBS warns in worst-case scenario of oil prices remaining at 110 dollars per barrel long-term
• Blockade of the Strait of Hormuz and halt of Qatari LNG supplies worsen supply situation
• The three largest LNG exporters – USA, Qatar, and Australia – control 60 percent of the world market
• Japan's Kashiwazaki-Kariwa nuclear power plant has saved 1 million tons of LNG annually since February 2026

Australia's Outage Hits the Market at an Inopportune Time

An Australian LNG facility accounting for 2.4 percent of global liquefied gas trade shut down for several weeks in late March 2026. The production outage exacerbates the global gas shortage at a time when markets are already burdened by geopolitical tensions. Along with the USA and Qatar, Australia ranks among the three dominant LNG exporters worldwide – together these countries control 60 percent of the global market, according to World Energy Council data.

The outage presents a major problem for Asian buyers, who rank among the largest LNG importers. China and Japan lead this list, followed by South Korea and Taiwan. For these economies in particular, any disruption to supply chains means immediate supply risks.

Middle East: Blockades and Attacks Strain Supply

The blockade of the Strait of Hormuz – one of the world's most important energy transport routes – and the halt of Qatari LNG supplies have driven oil and gas prices higher. A rocket attack on an LNG facility in Qatar triggered additional market turmoil. Damage extent remains partially unclear, while insurance covers only part of the losses.

Iranian oil sales, which go primarily to China, are expected to cease according to Amundi. Planned OPEC+ production increases and volumes supplied via pipelines from the region are insufficient to compensate for supply shortfalls. This applies to both oil and LNG supplies from the Middle East.

Risk Scenarios: UBS Warns of High Oil Prices Long-Term

UBS has run three possible scenarios in its analysis. In the worst case, oil prices could remain around 110 dollars per barrel long-term. Such a scenario would significantly burden global economic growth and push entire economies to the brink of economic bottlenecks, as analyses by Tagesschau suggest.

Geopolitical tensions in supply regions bear further escalation risks. Additional attacks on critical infrastructure could further disrupt supply chains and reveal the dependence on Middle East assets as particularly vulnerable.

Mitigating Factors in the Asian Market

Not all developments worsen the situation. The startup of Japan's Kashiwazaki-Kariwa nuclear power plant in February 2026 enables the country to save approximately 1 million tons of LNG annually. This represents a dampening factor for demand, even though the yen has already reacted to the strained energy situation with currency losses.

Nevertheless, the overall situation remains tense. The combination of Australian production outages, blocked transport routes in the Middle East, and rising prices poses significant challenges to the global LNG market. For buyers in Asia and Europe, this means higher costs and uncertainty about future supply security.

Market Concentration as a Structural Problem

Strong concentration of LNG exports in three countries – USA, Qatar, and Australia – makes the market vulnerable to regional disruptions. Every outage in one of these countries has immediate global impact. Growing competition in the LNG sector could provide more diversification in the medium term, but in the short term supply situation remains fragile.

The dependence of Asian importers on a few major exporters reveals the system's structural vulnerabilities. While Europe massively expanded its LNG import capacity following Russia's invasion of Ukraine, more buyers now compete for limited supply – in crisis times an additional price driver.