China, Japan, and the European Union determined demand in the LNG market in the first half of 2026. China imported 35.3 million tons of LNG between January and July 2026, Japan unloaded 37.3 million tons at LNG terminals, and European Union countries imported 100.1 million tons, according to the latest report from Banchero Costa Research. The main beneficiaries are suppliers from the USA and Australia.

The European Union, China, and Japan were key drivers of the rapid growth in global maritime LNG transport in the January-December 2025 period. LNG carriers had to increase transport by 5.8% year-on-year to 431.9 million tons. Congestion in the Persian Gulf caused by the closure of transport through the Strait of Hormuz caused global LNG exports to decline by 1.6% year-on-year, from 245.9 million tons in January-July 2025 to 241.8 million tons in January-July 2026.

Following the attacks on Iran, the United States is now the largest beneficiary of the LNG trade, helping to maintain the global LNG supply balance. LNG facilities and terminals accounted for 30.6% of supplies in January-July 2026. Australia moved into second place with a 19.5% market share, followed by Southeast Asian suppliers with 9.7% and Russia with 7.8%. Following the attacks on LNG facilities and terminals and the blockade of maritime transport through the Strait of Hormuz, Qatar supplied only 7.1%.

According to Banchero Costa Research, 74.1 million tons of LNG were shipped to tankers from US terminals between January and July 2026, representing a 21.6% year-on-year increase compared to the 60.9 million tons shipped between January and July 2025.

Qatar exported only 17.2 million tons during this period, a 64.3% year-on-year decrease. Australia shipped 47.2 million tons between January and July 2026, a 2% year-on-year increase. From Southeast Asia, shipments increased by 4.1% year-on-year to 23.5 million tons. Russia shipped 18.9 million tons of LNG between January and July 2026, a 10.4% year-on-year increase.

The EU’s dependence on US LNG supplies is growing (Source: Institute for Energy Economics and Financial Analysis, IEEFA)

There’s no denying it. Europe has deepened its dependence on expensive liquefied natural gas flowing across the Atlantic. US gas facilities will account for two-thirds of Europe’s liquefied natural gas imports in 2026, according to new research from the Institute for Energy Economics and Financial Analysis (IEEFA).

Updated IEEFA reports on the European LNG Tracker and EU gas flows show that imports of US LNG to Europe more than tripled between 2021 and 2025. EU countries have reduced their reliance on Russian pipeline gas supplies.

Given the ongoing disruptions in Qatari LNG exports, the IEEFA forecasts that “the United States will overtake Norway as the largest gas supplier to Europe and the EU in 2026, and by 2028 could account for 80% of EU LNG imports.” The analysis emphasizes that “American LNG is, on average, the most expensive for European consumers.”

“Europe’s transition from pipeline gas to LNG was intended to ensure supply security and diversification. However, the disruptions caused by the war in the Middle East and excessive reliance on American LNG demonstrate that Europe’s plan has failed in both respects,” says Ana Maria Jaller-Makarewicz, lead energy analyst, Europe, IEEFA.

LNG Prices Rise

Importer activity and changes in supply on the demand side have had a significant impact on prices. The main players were the United States, Australia, and Russia. After temporary declines, TTF prices rose sharply in August of this year. The price spikes were caused by suppliers as global LNG supply decreased. Customers replenishing their storage facilities and meeting their current needs have generated an additional price spike.

Faults and periodic shutdowns (for maintenance) of liquefied natural gas production facilities have also impacted prices. Physical and cyberattacks on production facilities and LNG terminals, other critical situations, and disruptions in supply chain logistics also contribute to price spikes.

Outages, physical and cyberattacks on LNG facilities (Source: Greg Molnár, Gas Analyst, International Energy Agency, IEA)

“Increased gas demand in Europe and supply disruptions in Norway have put renewed upward pressure on the market. This increase comes as gas prices in Europe and Asia have reached their highest levels since the Strait of Hormuz crisis,” notes Greg Molnár, lead author of the IEA LNG Quarterly Report, Professor at Sciences Po Paris, and Advisor to the European Gas Conference.

In Europe, month-ahead TTF prices have increased by almost 90% year-on-year, averaging $21/MMBtu. This is the highest LNG price since December 2023. Global LNG supply remains down by more than 6% year-on-year, as the Strait of Hormuz does not guarantee LNG transport from Qatar and the Emirates.

Europe Increases Demand and Prices

Tightening supply conditions coincided with an increase in gas demand in Europe, which increased by 3% due to higher gas consumption in the energy sector. Heatwaves, low hydroelectric capacity, and a decline in nuclear power plant activity increased demand for gas-fired electricity generation in the EU by over 10% year-on-year. Photovoltaic and wind farms failed to provide stable supplies, further increasing pressure on gas-fired power plant production and increasing gas prices.

In Asia, JKM prices followed the TTF trend, rising by 90% year-on-year to an average of $22/MMBtu. Importantly, the spread between JKM and TTF narrowed from $2/MMBtu in previous months to just $1/MMBtu in August, demonstrating the increasingly fierce competition between Asia and Europe for flexible LNG cargoes, according to David Callanan of European Gas Hub.

LNG Suppliers to China in 2024-2026 (1-7) (Source: Banchero Costa Research)

China is Changing Suppliers

Even the fact that China imported 2.5% less gas year-on-year and Japan imported 2.6% less gas year-on-year between January and July 2026 has no impact on the price decline. South Korea also imported 4.0% less LNG year-on-year. The country’s terminals received 26.9 million tons of LNG between January and July 2026, while China imported 35.3 million tons of LNG (36.2 million tons between January and July 2025), and Japan imported 37.3 million tons of LNG by July 2026. India imported 14 million tons of LNG by the end of July 2026, an increase of 0.9% year-on-year.

China was the world’s largest LNG importer in 2021, with a demand-side share of 20.7%. However, in 2022, both China and Japan were overtaken by the European Union, whose LNG imports increased by 67.6% year-on-year to 100.1 million tons from 59.7 million tons in 2021.

This was a result of the suspension of the launch of Russian-German gas pipelines in the Baltic Sea. EU countries accelerated the replacement of pipeline gas supplies from Russia with LNG imports. LNG imports from Russia were not subject to sanctions. Therefore, Russian gas flowed uninterrupted via LNG tankers to LNG terminals and pipelines in Western Europe.

Monthly LNG imports by the PRC economy (Source: Banchero Costa Research)

In 2025, Chinese imports fell by 13.3% year-on-year to 68.2 million tons, while EU imports rebounded by 25.8% year-on-year to a record 104.5 million tons. However, China retained its second-largest import position, just ahead of Japan with 67.3 million tons. Price fluctuations were also influenced by changes in the logistics of LNG supplies to China, whose activity impacts the European market. In 2026, China focused on imports via the Pacific Ocean. This proved to be a key market for maritime gas transport. Tankers delivered 12.6 million tons of LNG from Australia to China, representing a 6.3% year-on-year increase compared to 11.8 million tons in the January-July 2025 period.

Australia maintains its position as the largest supplier of liquefied natural gas to China, with a 35.6% share in 2026. Imports to China from ASEAN countries (Malaysia, Indonesia, Brunei, and Singapore) increased by 6.9% year-on-year to 7.1 million tons in the January-July period of this year. This makes ASEAN the second-largest supply market, with a share of approximately 20%. The Pacific Ocean became China’s primary gas supply source, with shipments from Qatar to China falling 57.6% year-on-year in January-July 2026.

Supply volumes from Russia to China increased 31.3% year-on-year to 4.3 million tons in January-July 2026 from 3.3 million tons in January-July 2025, increasing Russia’s share to 12.3%. Canada became a new supplier. However, LNG carriers from this direction delivered 1.4 million tons by July 2026.

American shipments to China are practically negligible. They declined by 71.7% year-on-year to just 0.1 million tons in January-July 2026.

LNG the Achilles’ heel of EU energy security

“LNG has become the Achilles’ heel of the European energy security strategy, exposing the continent to high gas prices and new forms of supply disruptions,” Ana Maria Jaller-Makarewicz, Chief Energy Analyst for Europe, categorically states in the IEEFA study “Europe to source two-thirds of its LNG imports from the US in 2026 as dependence deepens.”

The EU’s policy to reduce gas demand has so far been ineffective. The long-standing energy crisis has galvanized the EU to reduce its dependence on imported gas. The effects of the EU’s AccelerateEU ​​strategy remain to be seen. Despite this, the IEEFA optimistically forecasts that “European gas consumption could continue to decline this year and fall by 14% between 2025 and 2030, meaning LNG demand could fall by around 23% over the same period.”

Therefore, the organization notes with surprise that “European countries are still planning to build additional LNG terminals, which may be unused. IEEFA forecasts that European LNG import capacity in 2030 could exceed total gas demand and be three times higher than LNG demand,” according to Jules Scully in an IEEFA press release from May of this year.

“Europe may not have control over LNG supply disruptions, but it can increase energy efficiency and accelerate the installation of renewable energy sources and heat pumps to reduce its dependence on imports,” said Jaller-Makarewicz.

Changes in LNG supply flows and demand bottlenecks have caused economies that have relied on gas to suffer costly consequences. Gas suppliers are ruthlessly exploiting their partners. Extraordinary profits from gas and oil trade mean the conflict in the Persian Gulf could be prolonged indefinitely. It can be assumed that winter demand for energy resources will trigger new price movements. However, with the installation of renewable energy sources and energy storage facilities, according to the IEEFA, new LNG terminals may prove unprofitable, or even useless, in the long term.