LNG supply via Hormuz may not fully recover until April 2027

BAKU, Azerbaijan, October 20. Full restoration of liquefied natural gas (LNG) supplies through the Strait of Hormuz may not occur until April 2027, according to the baseline scenario in an updated analysis of LNG supplies from the Persian Gulf published by the Oxford Institute for Energy Studies (OIES).

The assessment is outlined in OIES’ report, What Next for Hormuz LNG? Alternative Scenarios.

According to the report, diplomatic efforts to agree on terms for the safe and reliable resumption of shipping through the strait have stalled as the US midterm elections scheduled for early November approach. The report notes that the White House rejected Iran’s proposed seven-day peace plan in late September.

The report states that the United States has established an effective embargo on Iranian oil exports from the Persian Gulf but has been unable to eliminate the threat Iran poses to shipping without an agreement. “Both sides have attacked commercial vessels attempting to transit the strait, disabling them and, in some cases, sinking them,” the report says.

Attempts to organize a regional conference between Iran and neighboring members of the Gulf Cooperation Council (GCC) also failed in mid-September, according to the report. The failure stemmed from a lack of agreement on Iran’s proposal to introduce transit fees and establish control over energy exports passing through the strait.

“There are no signs of an imminent breakthrough in the political deadlock. The longer the energy market price shock persists, the greater the risk of higher prices and LNG supply disruptions for importing countries as winter approaches in the Northern Hemisphere,” the report says.

In an earlier study published in late March, OIES analyst Mike Fulwood examined three scenarios for the recovery of LNG supplies. The most optimistic envisaged deliveries resuming by early summer 2026. A second scenario projected a resumption after the summer, with supply volumes approaching normal levels by mid-November 2026, except for Qatar’s damaged liquefaction trains. The most adverse scenario envisaged a year-long shutdown, with undamaged trains returning to service by April 2027.

According to OIES’ earlier analysis, if the Strait of Hormuz remained effectively closed until around mid-November 2026, prices at the European Title Transfer Facility (TTF) gas hub could average more than $25 per million British thermal units (MMBtu) for the rest of the year. If the disruption continued until April 2027, prices could rise significantly above $30 per MMBtu.

Before the crisis, in February 2026, TTF futures prices stood at $10–$11 per MMBtu. At the time the updated report was prepared, futures prices were around $28, according to the report.

The updated OIES analysis examines three additional scenarios alongside the baseline case, which assumes that LNG supplies will fully recover in April 2027.

The first scenario envisages a recovery in October 2027, six months later than in the baseline case. It assumes a gradual increase in supplies over the summer, followed by the full resumption of operations at undamaged liquefaction trains in October.

The second scenario assumes that restrictions persist, with LNG supplies from Qatar and the United Arab Emirates (UAE) remaining at their current level throughout 2028. The report puts this level at just under 2 billion cubic meters per month. These volumes would primarily serve consumers within the Persian Gulf region, including Kuwait. Under this scenario, shipping through the Strait of Hormuz would not fully resume.

The third scenario projects that LNG supplies from Persian Gulf countries will recover to 50% of pre-crisis levels starting in January 2027. It models a situation in which LNG exporters in Qatar and the UAE encounter difficulties negotiating transit terms or are unable to fully adapt to security risks associated with transporting cargoes, OIES reports.