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Following Russia's invasion of Ukraine in 2022, the sharp reduction in supplies to Western Europe sent gas prices soaring. In early 2026, when tensions in the Middle East constrained supplies through the Strait of Hormuz, the rise in LNG spot prices adversely affected some countries. Yet the market reaction was comparatively muted. Why?
One key reason is the flexibility and availability of global liquefied natural gas (LNG). Significant new supplies have entered the market since 2022, particularly from North America. US LNG exports have risen by more than half in the past four years, while Canada has begun bulk exports of LNG from its Pacific Coast.
“The closure of the Strait of Hormuz was a good reminder that in a world of increasing volatility, only additional capacity and diversity of supply can enhance security,” says Massimo Di Odoardo, Vice President of Gas and LNG Research at global consultancy group Wood Mackenzie. “The industry has done very well to invest in new capacity over the last five years, especially when there were concerns about potential oversupply.”
LNG can be shipped to any country with the right import infrastructure. Gas consumers such as India and Japan are therefore able to secure imports from a range of producers, which allows those countries to mitigate regional disruption.
The closure of the Strait of Hormuz was a good reminder that in a world of increasing volatility, only additional capacity and diversity of supply can enhance security.
What is LNG?
LNG is natural gas that has been super-cooled into liquid form, making it easier and more economical than gas to store and transport.
Why LNG is critical
LNG is playing a prominent role in both energy security and the global energy transition. When turned back into gas, it can be used to generate power—with LNG emitting 40% fewer emissions than coal in electricity generation—providing a lower-carbon partner for intermittent renewable generation. It can also replace coal as fuel—with 25% fewer emissions—in buildings and industries such as steelmaking, for which renewables cannot viably generate sufficient heat. And it is increasingly used as fuel for shipping, enabled by companies such as Shell, which operates the world’s largest LNG bunkering network.
Around
fewer emissions than coal in electricity generation
This accounts for all emissions from gas extraction to use. Source: Assessing emissions from LNG supply and abatement options, IEA
Around
fewer emissions than coal to produce heat for buildings and industries
Average across energy use cases
To deliver the full benefits of LNG, methane emissions must be kept close to zero. This can be achieved using technologies to identify and fix methane emission sources. Shell achieved 0.04% methane emissions intensity from its operated oil and gas assets in 2025, reflecting strong methane performance across its operations.
It is the versatility and emissions benefits of gas compared to coal that are making LNG part of the energy plans of leading Asian economies. India, for example, aims to double its share of total energy supplied by gas to 15% by 2030. The challenge is to source enough of the fuel. Many Asian countries do not produce enough gas to meet domestic demand, leaving them looking for ways to fill the gap at a time of heightened concern about energy security.
Addressing this concern requires an increased supply of LNG from a variety of locations. Years of sustained investments in LNG liquefaction and export infrastructure have helped. But more investment is needed to meet rising demand.
Growing flexibility
In recent years, gas producers from Qatar to the US and Canada have developed liquefaction terminals that enable gas to be shipped in liquid form around the world (see below). In 2025, the LNG Canada project, in which Shell holds the largest working interest (40%), began exports from Canada’s West Coast, most notably to Asia. In 2026, Shell announced a final investment decision on LNG Canada Phase 2, which is expected to double production capacity at the facility.
Many gas-consuming countries have been investing in infrastructure to receive LNG, creating an option to import gas from different locations. India’s experience this year shows how the system works under pressure.
Adapting to challenges
When Qatari exports were halted by the closure of the Strait of Hormuz, the world lost around 20% of LNG supply. India, which imported half of its gas through long-term contracts with Qatar, was badly affected due to the supply disruption and higher market prices. Gas imports fell sharply and the government introduced emergency regulations to curb gas consumption.
This led to concerns that fertiliser production, for which gas is an essential element, would be disrupted ahead of the summer rice-planting season. But, because new LNG supplies have entered the global market in recent years, Indian energy companies were able to replace Qatari shipments. By June, officials were reassuring farmers of ample fertiliser supply.
With disruptions in the Middle East impacting India’s regular supply of LNG, Shell drew on its global portfolio to help provide more gas into the country. We significantly increased the number of LNG cargoes we delivered, helping the government to stabilise the country’s energy system and ensure feedstock availability for fertiliser production, vital for food security.
Ensuring supply continuity
Shell has been a pioneer in the LNG industry for more than 60 years, and its portfolio of projects and capacity is the largest among its peers. The company already has LNG supply projects across 10 countries, interests in regasification facilities in India, the UK and Gibraltar, and long-term access to capacity across Europe, the Middle East and North America.
Looking ahead, exports from the Manatee field off Trinidad and Tobago are expected to start in 2027, providing more gas for the Atlantic LNG facility. In the same year, a seventh LNG train—the name for a facility in which gas is converted to liquid—is expected to come online at Nigeria LNG, in which Shell is a joint-venture partner.
Production is also expected at the Crux natural gas field, which will provide gas for the Prelude floating LNG facility off the north-west coast of Australia. In Asia, Shell’s Rosmari-Marjoram gasfields off Malaysia’s coast are expected to begin production later this year. This will boost the country’s LNG exports and help to diversify Asia’s energy mix.
By offering lower carbon emissions and less local air pollution compared to coal, gas can play a pivotal role in the energy transition as a back-up to renewables in power generation, heavy industries and shipping. The closures of the Strait of Hormuz have shown that investments in LNG supply and export infrastructure by Shell and other energy companies have given the market greater resilience to withstand disruption.
