Key Moments
- Woodside Energy CEO Liz Westcott stated that global gas markets are not fully reflecting the impact of lost LNG supply from the Middle East.
- Customers have been prioritizing short-term LNG procurement and looking to Woodside for contract reliability and potential additional volumes.
- Damage to Qatar’s Ras Laffan complex and forced majeure declarations of up to five years have contributed to expectations of a tighter LNG market in 2026 and 2027.
Woodside Flags Market Complacency on LNG Shock
The head of Woodside Energy, Australia’s largest LNG exporter, cautioned that global gas markets are significantly underpricing the fallout from the abrupt loss of liquefied natural gas supply from the Middle East.
“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.
According to Westcott, the current market response has focused heavily on immediate procurement needs rather than the longer-term structural implications of the disruption.
Customer Behavior Shifts Toward Short-Term Security
Westcott highlighted that buyers have been concentrating on near-term supply stability as LNG flows from the Middle East have been curtailed.
“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.
She added that counterparties are relying on Woodside to deliver contractual volumes and are actively seeking any incremental supply that could become available.
“Customers are looking for us to honor our contracts, and if there is any additional volumes, to keep them in mind,” the executive said.
Rising Interest in Woodside’s U.S. LNG Project
Beyond its existing portfolio, Woodside is working to lock in long-term offtake for its recently approved Louisiana LNG project in the United States.
Westcott noted that buyer interest in volumes from the Louisiana LNG plant has picked up in the current environment. Buyer interest in volumes from Louisiana LNG has recently increased, Woodside’s Westcott told Bloomberg.
Middle East Disruptions Tighten LNG Outlook
The conflict in the Middle East has significantly altered global LNG supply and demand dynamics. Earlier expectations for more balanced conditions have been replaced by forecasts of a tighter market in 2026 and 2027, driven by reduced output from Qatar and the UAE.
One of the key choke points has been the effective shutdown of the Strait of Hormuz, which has restricted about 20% of daily global LNG flows. This disruption has mainly affected cargoes that previously exited Qatar, along with part of the UAE’s LNG shipments.
Impact on Qatar’s Ras Laffan and Long-Term Contracts
Compounding the shipping constraints, Iranian drone and missile strikes on regional energy infrastructure have damaged Qatar’s Ras Laffan LNG liquefaction complex, described as the world’s single largest such facility.
As a result of the attacks, QatarEnergy has declared force majeure for up to five years on certain long-term LNG contracts and has indicated that restoring full capacity at Ras Laffan could also take up to five years, given the extent of the damage.
Disruption Overview
| Factor | Impact |
|---|---|
| Strait of Hormuz status | De facto closure has trapped about 20% of daily global LNG flows |
| Primary affected exporters | Qatar and part of the UAE’s LNG flows |
| Ras Laffan facility | Damaged by Iranian drone and missile strikes on regional energy infrastructure |
| QatarEnergy contract response | Force majeure declared for up to five years on some long-term LNG contracts |
| Capacity restoration timeline | Full capacity at Ras Laffan could take up to five years to restore |
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