On the eve of the Iran war, Energy Secretary Chris Wright traveled to Texas to celebrate the expansion of a liquefied natural gas terminal.
Gas will likely be “the fastest-growing energy source probably through the rest of my life,” Wright told a crowd gathered at Cheniere’s Corpus Christi plant.
Two weeks later, that outlook has become significantly more complicated. The U.S.-Israel war in Iran has resulted in shutting down the world’s largest LNG facility, in Qatar, and effectively closed the Strait of Hormuz, stranding about a fifth of global gas supplies. Escalating attacks by Iran on tankers and cargo vessels on Thursday have dimmed hopes of reopening the shipping route and led analysts to question the future growth of gas.
“The LNG industry has a problem,” said Alex Munton, an analyst who tracks the industry at Rapidan Energy Group.
The conflict presents a double-edged sword for the U.S. The shutdown of the Qatari plant, Ras Laffan, is an opportunity for American LNG developers, who can talk up the relative security of their supplies to potential customers. But whether those buyers will be willing to sign long-term contracts is an open question as fighting in the Persian Gulf diminishes the global supply of gas — and raises prices around the world. The conflict comes just four years after Europe shutoff gas pipeline import from Russia in retaliation for Moscow’s invasion of Ukraine.
“If you stack up the disruption in terms of what’s been cut off from the Gulf with bottlenecks on Hormuz on top of the structural decrease in Russian supply post-2022, the volumes are staggering,” Munton said. “I think every market will now, if they weren’t thinking already, have to think very seriously about how LNG fits into their energy mix from a security of supply standpoint.”
Gas seemed poised for a period of sustained growth prior to the Iran war. Now the conflict offers an obstacle to one of President Donald Trump’s top priorities — energy dominance. He made LNG a centerpiece of that strategy by issuing an executive order early in his second term that lifted a permitting pause on prospective LNG terminals.
Trump traveled to Corpus Christi with Wright on Feb. 27, hours before he launched the opening wave of attacks on Iran, to promote his administration’s efforts to boost LNG exports.
“We’re unleashing America’s potential, strengthening our security, increasing our prosperity,” Trump said as hulking vessels floated behind him.
His appearance came on the heels of a decision by the Department of Energy to approve an expansion of the Cheniere plant’s capacity by 12 percent.
LNG had been on a tear prior to the conflict with Iran. The global gas market grew by 60 percent between 2015 and 2024, according to the Energy Institute’s Statistical Review of World Energy. It expanded another 7 percent in 2025 and was set for future growth. LNG developers announced deals to finance 90 billion cubic meters of new supply capacity in 2025, the second-highest total ever, according to the International Energy Agency.
Asia was expected to drive much of the industry’s growth. Some countries, including India, use LNG as a feedstock for fertilizer and petrochemical production. Others, like China, use it for residential heating. Most of the growth has been underpinned by Asian countries that use gas to generate electricity.
But the Iran war has changed the long-term calculus, analysts said.
“We’re living in an entirely different world now,” said Ira Joseph, a gas analyst at Columbia University’s Center for Global Energy Policy. “Renewables and coal win here and LNG loses, strategically, longer term.”
QatarEnergy, the state owned gas giant, had marketed its LNG as a reliable and secure fuel that could power other nations’ growth. Many LNG buyers and analysts agreed. Shutting down the Strait of Hormuz was seen as an “outer stratosphere” scenario, Joseph said. Now gas buyers might think twice before inking long-term contracts.
“They’re like, OK, well, this clearly can happen, because it just did,” he said.
Ras Laffan, the Qatari LNG hub that supplies about a fifth of the world’s cargoes, was shut down after being struck by an Iranian drone early in the fighting. QatarEnergy declared a force majeure, saying it was unable to fulfill its shipment contracts. The facility is projected to be down at least a month. The company has also postponed the first phase of a massive expansion of its North Field facility from later this year to 2027, according to Bloomberg. Meanwhile, Reuters reported that Royal Dutch Shell had declared force majeure on LNG shipments it purchases from QatarEnergy, a move that frees it from liability for not delivering gas shipments to its customers.
Trump administration officials have sought to downplay the long-term impacts of the conflict, arguing that rising energy prices will be offset by removing Iran as a security threat to global markets. They have also pointed to the United States’ role as the world’s largest LNG exporter. U.S. shipments rose from 0.5 billion cubic feet a day in 2016 to 15 billion cubic feet a day last year.
“President Trump has been clear that these are short-term disruptions,” said White House spokesperson Taylor Rogers. “Ultimately, once the military objectives are completed and the Iranian terrorist regime is neutralized, oil and gas prices will drop rapidly again, potentially even lower than before the strikes begin [sic]. As a result, American families will benefit greatly in the long-term.”
DOE did not respond to a request for comment. But in an interview Thursday on CNBC, Wright said the conflict would “take weeks, not months” and argued that the U.S. was destroying Iran’s capacity to “threaten the United States’ troops in the region, to threaten their neighbors and, ultimately, threaten energy markets.”
Analysts said U.S. gas producers have limited ability to make up for the disruption in Qatar. American LNG terminals could increase production 5 to 10 percent over 2025 levels if they deferred spring maintenance, Rystad Energy said in an analysis. But, it added, “regardless of equipment performance, US LNG and other global LNG sources won’t be able to cover the loss of Qatari LNG if the conflict persists for multiple months.”
Evidence of the conflict’s impact was already apparent. South Korea, a larger buyer of Qatari LNG, is moving to speed up its plans to restart nuclear reactors that were taken down for seasonal maintenance. Analysts said countries in Asia are likely to turn to coal in the short term to make up for the loss of LNG. In Taiwan, officials have raised the idea of restarting a coal plant to makeup for lost LNG cargoes. Newcastle coal, the global price benchmark, has risen from $115 a ton on the eve of the conflict to roughly $133 this week, the highest price in more than two years.
Prior to the war, Wood Mackenzie expected South Asian LNG demand to increase 7 percent in 2026. That’s no longer the case.
“LNG demand across South Asian markets is now likely to remain flat at best,” wrote Akshay Gupta, a Wood Mackenzie analyst who tracks LNG markets.
The bigger question is whether the war will spook countries away from making vast investments in gas, or turn to other fuels, some analysts said. Importing LNG requires massive capital costs for infrastructure, said Munton of Rapidan. They need to build terminals capable of regasifying LNG cargos, and pipeline networks that can transport the gas after it is unloaded from tankers.
“Societies have to make a commitment to gas by investing in all that infrastructure,” Munton said. “Right now, as we stand here, that’s a big ask. Looking around, the big fear will be it’s the wrong bet to make.”
