LNG supply bottleneck, in full effect.

The supply crunch that's shaping the future of global energy.

As the global energy landscape rapidly evolves, demand for LNG is rising sharply, driven by nations seeking energy security, economic stability, and a switch from pipeline gas (in Europe) to LNG imports. However, this surge in demand comes with significant challenges, chiefly, limited export capacity.

As we look ahead to 2025, the global LNG market is grappling with the harsh reality of existing supply commitments, dwindling available capacity, and the need to navigate geopolitical and environmental uncertainties.

Combined, these factors are creating a bottleneck that will take many years to resolve.?

In 2024, global LNG trade reached a new high of 416 million tonnes (Mt), a notable milestone. However, the increase was marginal, only about 1Mt more than the record set in 2023. The reasoning is simple: supply is constrained due to limited export capacity.??

Collectively, the major LNG importers - China, Japan, South Korea, Taiwan, India, France and Spain - these countries have built 640Mt of LNG import capacity. Yet exporters, including the United States, Australia, and Qatar, which account for 60% of global LNG supply, are operating at near full capacity. In 2024, these top three exporters were running at 96% of their nameplate capacity, which resulted in total exports of 346Mt from the eight major LNG exporting nations, against a combined capacity of 385Mt.?

Tight supply is already leading us to higher prices and increased volatility. With Russia facing significant export challenges and other unpredictable factors, such as the hurricane season in the Gulf of America, scheduled maintenance, and unforeseen shutdowns, the margin for maintaining this supply/demand balance is razor thin, with wider energy prices being impacted.??

Furthermore, a large portion of the capacity from LNG export terminals has already been committed through long-term contracts, which are necessary to meet final investment decisions (FID). What remains is sold on the spot market, where prices can fluctuate wildly, adding another layer of uncertainty to the global supply chain.?

In short, the LNG market is under strain. While 2024’s trade numbers highlight continued demand, the supply chain struggles to keep up with the insatiable need for energy, leaving little flexibility for disruption.??

As we move into 2025, new capacity addressing this bottleneck will be required to ramp up quickly and help meet demand.??

You can stay ahead of the complexities of the global LNG market by partnering with Commodity Insights. We offer expert consulting and access to our powerful data platform.