Asian and European buyers of liquefied natural gas (LNG) are preparing to seek lower prices and stronger supply guarantees from Qatar and the United Arab Emirates after disruptions caused by the U.S.-Iran conflict exposed the risks of relying on Gulf exports.
The war has interrupted oil and gas flows through the Strait of Hormuz, forcing QatarEnergy to suspend exports, declare force majeure on some deliveries and temporarily shut liquefaction trains, while renewed attacks on tankers have increased shipping and insurance costs.
Industry executives and traders told Reuters that the higher risk profile is shifting bargaining power toward buyers, who are expected to push for more flexible contract terms and compensation mechanisms in future negotiations.
Long-term LNG contracts that were previously priced at around 12.6%–12.7% of Brent crude have recently been agreed at closer to 12.3%, reflecting growing concerns over supply security and transport risks.
Italian utility Edison, whose Qatari LNG deliveries have been disrupted for months, said future Gulf contracts must account for rising insurance costs and the possibility of repeated disruptions in the Strait of Hormuz.
Asian buyers are also expected to request replacement cargo guarantees, potentially from overseas projects such as Qatar’s Golden Pass LNG terminal in the United States, if Gulf exports are interrupted again.
Despite the increased risks, Qatar remains one of the world’s lowest-cost LNG producers, while the UAE continues to offer relatively flexible supply terms, although both may face greater pressure to offer more competitive deals.
Growing LNG production from the United States, Canada and Mozambique is also strengthening buyers’ negotiating position by providing alternative sources of supply.
Qatar and the UAE account for about one-fifth of global LNG export capacity and are planning further production expansion, giving importers additional leverage during future contract negotiations.
The evolving geopolitical risks in the Gulf are reshaping the global LNG market, prompting buyers to prioritise affordability, supply security and contractual flexibility alongside competitive pricing.