The LNG Security Myth: How the Strait of Hormuz Exposes LNG’s Vulnerabilities

National Interest  |  Anne-Sophie Corbeau

The ongoing conflict in the Middle East, particularly the closure of the Strait of Hormuz, is challenging the long-held perception of Liquefied natural gas (LNG) as a flexible and secure energy source. Unlike oil, which has developed mitigation strategies and alternative pipelines, LNG systems are structurally captive to maritime chokepoints like Hormuz, the Panama Canal, and the Bab el Mandeb Strait, lacking comparable rerouting options or strategic reserves. Global LNG supply is increasingly concentrated, with the United States, Qatar, and Australia projected to account for over 50 percent of exports by the early 2030s, exacerbating vulnerabilities alongside a lack of spare production capacity as facilities operate near maximum levels. LNG's celebrated flexibility often translates to price-driven allocation, where cargoes are redirected to the highest bidder, as seen when European Union countries attracted an incremental 50 bcm of LNG supply at the expense of Southeast Asian nations. This dynamic risks market fragmentation and undermines the promise of broad energy security.

Read Full Article →