Europe is increasingly being squeezed out of the global liquefied natural gas (LNG) market as Asian buyers outbid the region for limited supplies, following escalating tensions in the Middle East that have disrupted key energy routes and production facilities.
Countries including Italy, Poland, and Belgium are scrambling to secure alternative supplies in an increasingly competitive market, as ship-tracking data shows several LNG tankers changing course mid-voyage. Nearly a dozen shipments originally bound for Europe have already been redirected.
The situation has worsened due to instability around the Strait of Hormuz, a critical global energy chokepoint responsible for about 20% of LNG trade. The route remains under pressure amid retaliatory actions by Iranian authorities following missile strikes by the United States and Israel nearly a month ago.
Further strain on supply emerged after attacks on Qatar’s Ras Laffan industrial city, the world’s largest LNG export facility. The disruption forced Qatar to declare force majeure on contracts with several European countries, including Belgium, Italy, and Poland.
While Europe relies less heavily on supplies passing through Hormuz, the region is now grappling with rising prices and tightening supply. In contrast, Asian countries source up to 80% of their LNG through the strait, making them more vulnerable but also more aggressive in securing cargoes. Taiwan, a major semiconductor producer, warned it has only about 11 days of gas supply remaining.
Since the outbreak of the Middle East conflict on February 28, the number of diverted LNG shipments has steadily increased. According to energy intelligence firm Kpler, at least 11 cargoes have been rerouted from Europe to Asia, alongside additional diversions to Egypt and Turkey.
The supply crunch comes at a critical time for Europe, which is entering its gas storage refill season ahead of winter. Analysts warn that insufficient stockpiling could pose serious risks later in the year.
“While demand is expected to ease as Europe exits the winter heating season, the current crisis could significantly impact storage levels and create challenges for next winter,” said Laura Page, Insight Manager for LNG and Natural Gas at Kpler.
Market prices reflect the growing tension. Europe’s benchmark Dutch TTF gas price settled around €53–€54 per megawatt-hour on Tuesday, after briefly surging above €60 earlier in the day—well above pre-conflict levels.
Meanwhile, Asian buyers are offering a premium of $1–$3 per MMBtu over European prices, based on the JKM benchmark. Though relatively small, this price difference is proving decisive in redirecting cargo flows eastward.
With traders prioritizing higher returns and more favorable shipping economics in Asia, Europe now faces mounting pressure to secure sufficient LNG supplies in an increasingly constrained global market.
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