America is the world's largest producer and exporter of LNG, after a decade of rapid expansion. Its export terminals run close to maximum capacity, and the country lacks sufficient pipeline infrastructure to quickly ramp up shipments.
In 2025 President Trump pressed allies including the European Union, India, the Philippines, Japan, South Korea and Taiwan to increase purchases of American LNG as a way to reduce their trade surpluses with America. Scott Bessent, his treasury secretary, sought to persuade Japan, South Korea and Taiwan to invest in a vast LNG project in Alaska. Yet Trump's tariffs simultaneously hobbled the industry, sending the cost of steel and other inputs for new LNG projects soaring and weakening demand in many trading-partner economies.
Europe has grappled with a gas shortfall since Russia cut back exports after the invasion of Ukraine. European LNG imports were expected to rise by a quarter in 2025, according to the International Energy Agency. Yet European buyers have been reluctant to sign long-term contracts for American LNG, fearing climate regulations could one day ban gas use or that a glut in global supply would cause prices to collapse. The prospect of Russian gas resuming after a peace deal in Ukraine further clouds the outlook.
China halted all LNG imports from America in early 2025 as part of the trade war. Chinese energy firms announced big LNG deals with ADNOC, an Emirati hydrocarbon giant, instead.
Key American LNG companies include Venture Global and EQT. ADNOC in the UAE is a major non-American supplier. Golden Pass in Texas is the biggest new American LNG facility under construction.
Natural gas must be cooled to 160°C below freezing to turn into a liquid. Because of this, LNG producers can economically stockpile no more than about five days of production. Tankers and liquefaction gear are designed for constant and high utilisation. After being switched off, they must be cooled back down and restarted one by one rather than simultaneously; it typically takes a fortnight to liquefy and load the first cargoes and between four and six weeks to reach full capacity.
Unlike oil, there are no strategic reserves for natural gas. Some jurisdictions, such as the European Union, mandate minimum storage levels, but most countries have limited inventories. As of early 2026, South Korea had about 52 days' worth of gas inventory; Japan roughly 20 days; Taiwan just 11 days; and India about 5-6 days.
As of early 2026 the world's LNG export capacity is virtually tapped out. Australian producers run at about 90% of capacity. America's LNG facilities operate at 95% capacity. QatarEnergy, which produces about a fifth of the world's LNG, is the single largest source. The EU gets 13% of its LNG imports from Qatar.
The last cargoes of LNG from the Gulf set sail about a month before the start of April 2026, before America and Israel attacked Iran. The Gulf is the source of a fifth of global LNG production. As these reached their destinations, energy importers reliant on LNG scrambled for alternatives. Rich ones forked out more for whatever LNG they could get; some poor ones shut schools or urged businesses to cut short their work week. LNG prices nearly doubled. Japan and South Korea lifted restrictions on older coal-fired power plants; Bangladesh imported more coal from Indonesia and South Africa and more coal-generated electricity from India.
A third of global seaborne crude and a fifth of LNG transit the Strait of Hormuz daily. Some 14m barrels per day of crude and 4m b/d of refined products usually pass through. Only about a quarter of the crude can be rerouted via Saudi and UAE pipelines that bypass the strait. Qatar's Ras Laffan complex, which accounts for 17% of global LNG exports, lies on the strait's western shore.
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