LNG at Risk: South Pars, the Strait of Hormuz, and the Global Energy Equation
- Timothy Beggans
- Jun 17
- 2 min read
Tensions in the Middle East are once again testing global energy stability. The Iran-Israel conflict has escalated into a new and dangerous phase, with unconfirmed reports of airstrikes targeting Iran’s South Pars gas field — the world’s largest natural gas reserve, shared with Qatar (North Dome).
While the offshore field remains intact, damage to onshore processing could significantly curtail Iran’s domestic gas supply. Iran relies on South Pars for over 70% of its natural gas production — a vital lifeline for power generation and residential use.
Now consider the wider risk: a potential closure of the Strait of Hormuz, through which 20% of global oil and nearly all Qatari LNG exports pass. This chokepoint is less than 30 miles wide. If disrupted, LNG cargoes from Qatar — one of the world’s top LNG exporters — would be stranded, and global gas markets would feel the shock instantly.
Qatar is ramping up its production from 77 million tonnes per annum (mtpa) to 126 mtpa by 2027, and ultimately 160 mtpa by 2030 (OilPrice). But spare global LNG capacity today is thin. Europe, heavily reliant on LNG since cutting ties with Russian gas, would scramble for alternatives. U.S. and Australian LNG exports are already near full capacity.
This unfolding situation underscores the fragility of energy security in a geopolitically volatile world. It also raises strategic questions:
Should Europe accelerate regasification and storage investments?
Will Asian buyers outcompete Europe for remaining cargoes?
How will insurance and shipping markets react to risk premiums in the Gulf?
A regional conflict with localized bombing has now created global ripple effects. For a fuel marketed as "reliable," LNG is entering a new era of geopolitical exposure.
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