Strikes that knocked out nearly a fifth of Qatar’s liquefied natural gas export capacity are rippling across Asia, raising fears of higher power costs, fuel rationing and a renewed shift to coal in some of the world’s most import-dependent economies.
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State-owned QatarEnergy said Iranian attacks damaged two liquefied natural gas (LNG) trains and a gas-to-liquids facility at Ras Laffan, cutting 12.8 million metric tonnes per year of export capacity – about 17 per cent of Qatar’s LNG total – for an estimated three to five years. The company has declared force majeure on some long-term contracts, with major buyers including South Korea and China affected.
Asia’s heavy reliance on Qatari LNG – accounting for more than 80 per cent of exports – means the disruption is being felt most acutely in the region, where utilities and governments are scrambling to secure replacement cargoes in an already tight market. Buyers in South Korea, India, Taiwan, Bangladesh and Thailand have been seeking spot LNG, though high prices and limited supply have constrained purchases.
“The most recent attacks on gas and LNG infrastructure in the Gulf highlight the inherent risks of fossil fuel dependency,” said Li Shuo, director of the China Climate Hub at Asia Society. “East Asian countries most reliant on imported LNG will soon face an immeasurable economic shock, despite their distance from the conflict.”
Seb Kennedy, global gas and LNG analyst and founder of EnergyFlux.news, said the disruption represents a longer-term shock that markets have yet to fully price in.
“The loss of a large chunk of Qatari LNG supply until perhaps 2030 is a structural supply shock that energy markets have barely begun to price,” he said. “There will be cascading consequences not only for Asian countries that rely upon Qatari LNG but also European natural gas, power, condensate, and refined products the world over.”
Asian governments have sought to reassure markets while preparing contingency measures. South Korea said on Friday it did not expect immediate supply disruptions, noting that Qatari LNG accounts for about 14 per cent of its gas imports and that inventories remain above required levels. However, Seoul said it could increase coal and nuclear generation and reduce reliance on gas-fired power if needed.
Japan’s biggest LNG buyer, JERA, said a prolonged crisis would push utilities to seek alternative supply from outside the Middle East, including the United States and Canada. A senior executive warned that if the conflict persists and shipping routes such as the Strait of Hormuz are disrupted, authorities may need to urge power conservation.
The strain is already most visible in emerging Asian economies, which are less able to absorb volatile fuel costs. The Institute for Energy Economics and Financial Analysis (IEEFA) said in a March 12 briefing that such countries face the highest risks from price swings despite being among the fastest-growing fossil fuel markets.
In 2025, Pakistan, India and Bangladesh sourced the largest shares of their LNG from Qatar and the United Arab Emirates, underscoring their exposure. Separate IEEFA analysis showed Qatar and the UAE supplied 99 per cent of Pakistan’s LNG imports, 72 per cent of Bangladesh’s and 53 per cent of India’s.
That vulnerability is already translating into real-world disruptions. India has rationed gas supply to industry, Bangladesh has turned to the spot market, and Pakistan has implemented emergency gas management measures.
Spot prices have surged. IEEFA said the Japan-Korea Marker, Asia’s LNG benchmark, jumped 50 per cent between 27 February and 9 March, while Bangladesh bought a cargo at US$28.28 per million British thermal units, roughly triple levels seen a month earlier. Some South Asian buyers have paid more than US$20 per mmBtu for replacement cargoes.
Analysts say the crisis is no longer just a supply disruption but a broader geopolitical shock to energy markets.
“The latest series of strikes on gas and LNG infrastructure in the Persian Gulf has shifted the paradigm from a regional escalation to a systemic global energy crisis, where the primary driver is now energy geopolitics rather than market fundamentals,” said Francesco Sassi, professor of energy geopolitics at the University of Oslo.
“With Iran explicitly threatening all major regional energy infrastructure, and in the total absence of Qatari LNG exports, Asian and European governments and energy stakeholders will be forced to make unprecedented, high-stakes choices in the coming months.”
Those choices may include greater reliance on coal in the short term, as LNG becomes more expensive and less secure.
Still, analysts say the crisis could accelerate the shift toward renewable energy. IEEFA said reducing exposure to volatile global fuel markets through faster deployment of renewables offers the most sustainable long-term solution, estimating that every 1 gigawatt of solar capacity could avoid about US$3 billion in LNG import costs over 25 years.
Li said developing Asian economies should draw lessons from the shock.
“They would be wise to invest heavily in clean energy and transport, as we’ve seen in Pakistan, in order to shield themselves from such geopolitical shocks in the future.”
