Shell sees flat LNG trade in 2026 as Hormuz recovery remains uncertain

(Bloomberg) – Shell Plc expects global liquefied natural gas flows to be little changed this year—after more than a decade of growth—if shipping through the Strait of Hormuz returns to normal this summer.

However, under an alternative scenario, published in Shell’s LNG Outlook 2026 released on Tuesday, LNG supply could see a rare annual contraction if Hormuz remains shut for weeks to come. The conflict in the Middle East has choked off about a fifth of global exports over the past four months.

When the strait is eventually deemed safe to pass, LNG facilities could require around six to eight weeks to ramp up, Shell said. The oil major is an equity stakeholder at Qatar’s massive Ras Laffan complex, where production units were damaged by Iranian missiles in March.

London-based Shell, the world’s biggest LNG trader, sees supply of the super-chilled fuel returning to growth in 2027. That contrasts with Vitol Group and the International Energy Agency, which expect supplies could be tight for around two more years.

Shell shares were little changed in London trading on Tuesday.

Even as new export facilities—mainly in the U.S.—come online, Qatar has said that about 17% of its capacity would need years of repairs after the Iranian attacks. Some experts also predict delays to new projects in the Middle East.

While shipping traffic is recovering after the U.S. and Iran signed a deal to reopen Hormuz, tensions in the Persian Gulf remain high with renewed attacks on cargo vessels in recent days pushing benchmark gas contracts higher. 

Qatar is yet to resume normal operations after it shut its LNG production in March following the Iranian strikes. Shell also operates Qatar’s Pearl gas-to-liquids facility, which also remains offline after being hit during the conflict.

Global demand for LNG is expected to climb to nearly 700 million tons a year by 2050, an increase of around 65% from 2025 levels, according to Shell.