LNG demand in Asia — the most important market for Gulf producers — is on track to fall for the second year in a row, according to Wood Mackenzie. Around 83% of the Gulf’s LNG exports head to Asia, but the Iran war is changing the market dynamics, prompting importers to cut demand, switch to other suppliers, or turn to other fuels such as coal and nuclear. Overall LNG demand in Asia is expected to be 8% lower this year than its 2024 peak.
A recovery in demand depends in part on how long supplies remain disrupted, but some Gulf producers are betting on a rebound. Abu Dhabi’s ADNOC Logistics and Services last week placed a $900 million order for four LNG carriers from a Chinese shipyard, with its CEO citing the “strong fundamentals” of the LNG market.