(Oil Price) – The global gas markets are seriously underestimating how the shock loss of LNG supply from the Middle East will affect the world and economies in the coming months and years, the head of Australia’s top LNG exporter, Woodside, said on Wednesday.
“I don’t think markets and consumers and society are yet fully appreciating it, and there’s a belief that things will return to normal at some soon point,” Liz Westcott, chief executive officer at Woodside Energy, told Bloomberg Television in an interview on the sidelines of the Australian Energy Producers Conference.
“The immediate activity for customers is securing short-term supply as a result of having so much supply held back from the Middle East,” Westcott said.
“Customers are looking for us to honor our contracts, and if there is any additional volumes, to keep them in mind,” the executive said.
Woodside is also looking to secure firm long-term commitments for its newly-approved Louisiana LNG plant in the United States.
Buyer interest in volumes from Louisiana LNG has recently increased, Woodside’s Westcott told Bloomberg.
The Middle East conflict upended global LNG supply and demand balances. Contrary to earlier forecasts, the market is now expected to be tight in 2026 and 2027, amid curtailed output from Qatar and the UAE.
The de facto closure of the Strait of Hormuz has trapped about 20% of daily global LNG flows, mostly those previously shipping out of Qatar and part of the UAE’s LNG flows.
In addition, Iranian drone and missile strikes on energy infrastructure in the region has damaged Qatar’s key LNG liquefaction complex Ras Laffan, the world’s single largest such facility. Due to the attacks, QatarEnergy has been forced to declare force majeure for up to five years on some long-term LNG contracts and has advised that full capacity could take up to five years to restore following extensive damage from the strikes.
By Tsvetana Paraskova for Oilprice.com
