Qatar’s LNG halt exposes Asia’s energy vulnerability

Asia is bracing itself for another energy shock after a disruption to Qatar’s liquefied natural gas (LNG) output sent regional gas prices to their highest level in about three years, exposing what observers say is a dangerous reliance on Middle Eastern fuel supplies. The increase follows Iran’s drone strikes on Qatar in retaliation for Israeli and US attacks in a widening conflict, alongside a blockade of shipping through the Strait of Hormuz – a key artery for global oil and gas trade. Spot LNG prices in Asia were hovering around US$23.80 per million British thermal units on Friday, Bloomberg reported. Analysts say the turmoil highlights how Asia’s heavy dependence on imported fossil fuels leaves the region vulnerable to geopolitical shocks and underscores the need to accelerate the shift to renewable energy. Qatar – one of the world’s largest LNG exporters – halted production on Monday at its Ras Laffan plant. The halt has sent buyers across Asia searching for replacement cargoes, with some industries already cutting consumption as fuel costs surge. Cash-strapped Bangladesh bought two LNG cargoes on the spot market on Wednesday and is shutting down fertiliser production to conserve gas supplies. India is reportedly facing the prospect of a cooking gas shortage and is considering contingency plans. Qatar, however, is offering at least two LNG tankers – Al Thumama and Mesaieed, both of which are under long-term charter by state-owned QatarEnergy – that it controls for lease, according to traders with knowledge of the matter. The vessels are currently off the west coast of Africa, ship-tracking data compiled by Bloomberg shows. “The Strait of Hormuz closure has shaken global energy markets, threatening LNG-dependent countries like Bangladesh,” said Dr Mohammad Tamim, vice-chancellor of Independent University, Bangladesh. “Our main LNG suppliers are Qatar and Oman, so prolonged disruption would severely impact energy security and the economy. A crisis lasting beyond two weeks could destabilise gas supply.” The energy crisis could potentially disrupt the country’s industries and power plants, straining reserves and fiscal stability, Tamim said. The energy crisis comes at a sensitive time for the South Asian nation, which ushered in a new government under the Bangladesh Nationalist Party after February’s election, following months of turmoil when student-led protests toppled the previous government. The disruption in gas supply in Qatar has sent shock waves throughout Asia, which has been the primary destination for the Middle East nation’s natural gas exports. Singapore and Thailand have been among the two largest importers of LNG from Qatar. The extent of the halt in Qatar’s LNG output would depend on damage to the production facility, which was still being assessed, Rystad Energy said. Little to no infrastructure damage and a prompt end to hostilities could result in a 15-day production halt, while an extended disruption could be in line with US President Donald Trump’s prediction of the conflict lasting four to five weeks, the firm said. The closure of the Strait of Hormuz is adding to the energy crisis, with benchmark Brent oil prices set for the biggest weekly surge since 2022 following Russia’s invasion of Ukraine. Oil prices have risen 16 per cent this week, with prices easing slightly to US$84 a barrel after Trump signalled action to reduce pressure on prices. “This [situation] has clearly affected both the global and Thai energy markets,” said Dr Chalie Charoenlarpnopparut, an energy scholar at Thammasat University. “This crisis highlights the vulnerability of Thailand’s energy planning due to an excessive over-reliance on LNG and imported gas, without utilising the potential of domestic resources such as biomass, solar and wind.” Thailand’s lack of adequate energy reserves had exacerbated the situation, he added. According to Sarinee Achavanuntakul, director of Climate Finance Network Thailand, the country depends on natural gas for nearly 60 per cent of its electricity generation, with over a third of that gas imported as LNG. Qatar is the largest LNG supplier at 21 per cent of the total imports. “We saw this before: the Russia-Ukraine war drove Thai electricity tariffs above four baht per unit for the first time in 14 years. But the deeper problem is structural. Thailand continues to pour massive investments – over 84 billion baht in LNG infrastructure alone,” she said. Building energy resilience The latest supply disruption has exposed vulnerabilities even in the region’s largest economies. While China and India receive the largest volumes of oil and LNG through the Strait of Hormuz, Japan and South Korea are more vulnerable to supply shock due to their heavier reliance on imported fossil fuels, according to Amy Kong, energy transition researcher at Zero Carbon Analytics, citing her firm’s analysis in February. Energy experts say geopolitical tensions have magnified the risks of dependency on fossil fuels as renewable energy has become cheaper and more easily available. “The current crisis shows that Asia’s next generation of energy systems must be built to last, be flexible and prioritise security without compromising on climate goals, and clean energy can provide that,” Kong said. Sam Reynolds, gas research lead for Asia at the Institute for Energy Economics and Financial Analysis, said a prolonged Iran conflict could be severe for Asian markets, with many economies heavily reliant on oil and gas flows from the Middle East. “These low-cost clean energy technologies present a critical hedge against fossil insecurity, enabling countries to reduce long-term exposure to global commodity markets and chart energy pathways based on affordable, reliable resources,” he said. Additional reporting by Bloomberg

Qatar’s LNG halt exposes Asia’s energy vulnerability

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Analysts say the turmoil underscores Asia’s need to shift to renewable energy, as nations scramble for alternatives amid the disruption

Analysts say the turmoil underscores Asia’s need to shift to renewable energy, as nations scramble for alternatives amid the disruption