Shell Faces Tight LNG Supplies as Strait of Hormuz Cuts Exports 6%
Closure of the Strait of Hormuz is forecast to reduce global LNG exports by at least 6% throughout 2026, constraining supplies for major importers. New liquefaction projects in the U.S., Qatar, Canada and Senegal scheduled from 2027 are expected to shift the market to surplus by 2028.
1. Impact of Strait of Hormuz Closure
Closure of the Strait of Hormuz has restricted volumes of LNG passing through the key Persian Gulf corridor, with global exports projected to fall at least 6% in 2026. As a leading LNG exporter, Shell faces tighter supply channels that could elevate delivery costs and limit sales opportunities.
2. Asian Market Response and Costs
Major Asian buyers have resorted to energy rationing, increased coal-fired generation and emergency spot-market purchases to plug the LNG shortfall, placing upward pressure on prices. Shell’s trading arm may incur higher procurement costs while customers react to constrained supplies.
3. Medium-Term Capacity Expansion
From 2027, global liquefaction capacity additions in the U.S., Qatar, Canada and Senegal are slated to ease market tightness, with potential surpluses by 2028. Shell’s involvement in several of these greenfield projects positions the company to capitalize on the medium-term supply expansion.