Category: Quantitative
Source: Wood Mackenzie Horizons Report (Massimo Di Odoardo, VP Gas & LNG Research), via gCaptain, May 21, 2026
Description
The liquefied natural gas (LNG) dimension of the Hormuz crisis — a supply gap that persists even in the best-case diplomatic scenario and has structural implications for global energy transition.
Key Numbers
| Metric | Value |
|---|---|
| LNG supply inaccessible | 80+ mt/yr (~20% of global) |
| Gulf existing LNG capacity | 85 mt/yr |
| Projects under construction at risk | 75 mt/yr |
| Tightness duration (quick peace) | Through summer 2027 |
The LNG Gap
Unlike crude oil, where reopening Hormuz would quickly restore flows, LNG infrastructure requires time to restart. Even in the "Quick Peace" scenario:
- LNG markets remain tight through summer 2027
- Gulf export facilities need time to recover
- New supply projects face delays
Permanent Capacity Loss Scenario
In the extended disruption scenario:
- Some of Gulf's 85 mt/yr existing LNG capacity could be permanently lost
- ~75 mt/yr of projects under construction could face multi-year delays
- This would fundamentally reshape global LNG trade flows
Structural Implications
- Accelerates diversification away from imported LNG
- Supports coal resilience (coal-to-chemicals workaround in China)
- Faster growth in renewables/electrification as energy security strategy
Significance
No other source has quantified the 80 mt/yr LNG gap and its structural implications for global energy transition. This is unique to WoodMac's analysis and represents a long-term structural shift beyond the immediate crisis.
Relationship to Other Concepts
- Extends "Hormuz Scenario Tree" (same source) with the gas-specific dimension
- Complements "Demand Destruction Dual Risk" (Goldman Sachs) — the LNG gap affects petrochemical production, which Goldman flags as a demand destruction channel
- The "permanently lost" LNG capacity is a structural long-term claim unique to this source