IEA Warns Global Gas Crunch Could Last Into 2027

The International Energy Agency said on November 3 that the global natural gas market could remain tight well into 2027, after the Strait of Hormuz crisis drove the steepest annual drop in liquefied natural gas supply on record. The warning, published in the IEA’s Global Gas Security Review 2026, lands as Europe enters the winter heating season with its lowest gas storage levels in more than a decade.

Gulf LNG losses only partly offset elsewhere

The IEA said LNG loadings from Qatar and the United Arab Emirates fell by more than 60 billion cubic meters (bcm) between March and October 2026, as the standoff around the Strait of Hormuz disrupted shipping out of the Persian Gulf. Higher output from newer liquefaction plants in North America and Africa, plus additional feedgas from established producers in Africa, Asia and Russia, made up only part of the shortfall: non-Gulf LNG production rose 14%, or more than 40 bcm, year-on-year over the same period, covering roughly two-thirds of the lost Gulf volumes. Global LNG production still fell by about 6%, or 20 bcm, from a year earlier.

On that basis, the IEA expects global LNG supply to contract by 3% over the full year, which it says would be the steepest annual decline since it began tracking the market. The agency’s base case assumes Hormuz shipping stays largely disrupted through the end of 2026. QatarEnergy, the Gulf’s largest LNG exporter, has separately extended force majeure notices on deliveries to most of its customers through December.

Europe’s storage gap heading into winter

The supply loss has hit Europe at a difficult moment. The continent built up LNG import capacity after it cut most pipeline gas from Russia, leaving it more exposed to swings in the global spot market than in past decades. The IEA said Europe’s gas storage is now at its lowest level for this point in the season in more than ten years, which it warned “could substantially increase the need for injections to replenish inventories through summer 2027” — implying that the squeeze may not ease once the coldest months pass, but instead carry over into next year’s refilling season.

That dynamic has already shown up in trading. Stronger linkage between European and Asian gas markets has not stopped the Hormuz disruption from pushing prices higher in both regions, as buyers compete for the same marginal cargoes. The IEA said competition for spot LNG between Asia and Europe, combined with the approach of winter, has pushed regional gas and LNG benchmarks to their highest levels since the 2022-2023 supply crisis that followed Russia’s cuts to pipeline exports.

A crisis still centered on Hormuz

The IEA was explicit about the source of the shock: “The current Middle East crisis has dealt a major shock to global gas and LNG markets,” the agency said in the report. Oil markets have shown similar strain; Brent crude settled at a six-month high after a tanker attack near Hormuz in late October, before swinging sharply in both directions in recent days on alternating reports of US strikes on Iranian targets and diplomatic overtures between Washington and Tehran. Gas markets have tracked a similar, if less headline-grabbing, pattern of disruption without the same day-to-day volatility, since Gulf LNG cargoes move on fixed loading schedules rather than spot trading desks.

Buyers have been adjusting where they can. QatarEnergy itself has moved to lock in long-term US supply even as it curtails near-term deliveries from the Gulf, and European importers have leaned harder on US and West African cargoes to fill the gap left by Qatari and Emirati volumes. Commodity traders have also stepped up direct supply contracts with European utilities to manage the volatility; Geneva-based Trafigura, for instance, agreed in late October to a $1.5 billion gas supply arrangement with Germany’s SEFE, one of several deals aimed at shoring up European winter supply outside the traditional Gulf routes.

Why the squeeze could outlast the war

The IEA’s warning is notable less for the scale of the current shortfall than for its timeline. Even if the Strait of Hormuz dispute were resolved relatively quickly, the agency’s language suggests Europe would still need an unusually strong injection season next year just to rebuild storage to normal levels — a process that typically takes from spring through autumn. A prolonged Hormuz disruption, by contrast, would mean Gulf LNG volumes stay curtailed through a second winter, compounding the storage deficit rather than allowing it to be worked off. Rystad Energy, an energy consultancy, said separately this week that it does not expect Hormuz shipping to return to pre-war levels before mid-2027 even under an optimistic settlement scenario, a timeline roughly consistent with the IEA’s own base case.

For now, the agency’s message to European and Asian buyers is effectively one of patience rather than panic: supply is tighter than at any point since the 2022-2023 crisis, but new liquefaction capacity coming online in North America and Africa is covering a growing share of the gap. Whether that is enough depends largely on how long the Hormuz standoff — and the wider US-Iran confrontation behind it — continues.

Sources

• International Energy Agency, Global Gas Security Review 2026, November 3, 2026 — storage levels, LNG supply/production figures and winter outlook.
• OilPrice.com, “IEA Warns Global Gas Crunch Could Last Well Into 2027,” November 3, 2026 — report summary and direct IEA quote.
• OilPrice.com, “Hormuz Oil Flows Unlikely to Return to Pre-War Levels, Rystad Says,” November 3, 2026 — Rystad Energy timeline for Hormuz shipping recovery.
• OilPrice.com, “U.S. LNG Exports Near Record High as Europe Scrambles for Winter Supply,” November 3, 2026 — context on US cargoes filling part of the Gulf shortfall.

Illustrative image. Photo: Arne Müseler, CC BY-SA 3.0 de, via Wikimedia Commons — source