Middle East maritime conflict and LNG supply disruption

Escalation of conflicts in the Middle East led to the halt of transit through the Gulf of Hormuz.

Following an escalation of conflicts in the Middle East on February 28, 2026, transit through the Gulf of Hormuz was halted. As this waterway serves as the only maritime exit for LNG exports from Qatar and the United Arab Emirates, the disruption brought these exports to a standstill.

The disruption resulted in approximately 160 LNG vessels being stranded in the Gulf or forced to anchor and wait in the Oman Gulf. This reduction in available vessels narrowed spot market capacity and led to the highest LNG vessel charter rates since the 2022 energy crisis.

Additionally, war risk premiums for vessels transiting the area increased from approximately 0.25% of vessel value to between 5% and 10%. For a single transit of a $250 million LNG vessel, war risk insurance costs reached up to $25 million.

LNG transport costs surge following Gulf of Hormuz disruption