QatarEnergy halves LNG deliveries to Bangladesh as Hormuz disruption persists

QatarEnergy's decision to halve LNG deliveries to Bangladesh shows the Iran war's energy shockwaves are still reshaping Asian gas markets.

QatarEnergy has halved its scheduled liquefied natural gas deliveries to Bangladesh this year, Petrobangla's acting chairman said, as the Iran war's disruption of Strait of Hormuz shipping continues to constrain supplies four months after the conflict began.

"All these problems stem from the war," Abdul Mannan, acting chairman of state-run Petrobangla, said in an interview Monday.

Qatar supplied about 4.15 million metric tons of the nearly 7 million tons Bangladesh imported last year, making it the South Asian nation's largest LNG supplier. Petrobangla holds two long-term contracts with QatarEnergy totaling 4.3 million tons per annum — one for 2.5 mtpa and another for 1.8 mtpa — both now subject to reduced deliveries.

The supply squeeze threatens Bangladesh's energy security and underscores how the Feb. 28 US-Israeli strikes on Iran and Tehran's retaliation continue to ripple through global gas markets even after a ceasefire and the resumption of maritime traffic through the Strait of Hormuz. Bangladesh is now exploring alternative sourcing including higher spot-market purchases and government-to-government deals with other suppliers, Mannan said.

LNG Market Still Reeling From Hormuz Disruption

Qatar was the world's second-largest LNG producing country after the United States, and the Strait of Hormuz — through which the majority of Gulf energy exports transit — remains a bottleneck. India, the world's third-largest crude importer, relies on West Asia for about 65 percent of its LNG supplies and withdrew emergency gas supply regulations only after the ceasefire allowed maritime traffic to resume, according to a July 5 notification from the Ministry of Petroleum and Natural Gas.

The emergency measures, imposed March 9 under the Essential Commodities Act, had empowered the government to centrally allocate domestic natural gas and imported LNG to priority consumers including households, transport fuel and fertilizer plants. India's ability to diversify crude oil purchases during the crisis proved easier than replacing LNG cargoes, since most Qatari shipments must pass through Hormuz.

Global Glut Risk Emerges as Trapped Barrels Flow

The supply picture is shifting rapidly. Brent crude futures have erased all their wartime gains, tumbling 43 percent from an April high near $126 a barrel to trade at $71.88 Monday, as more than 60 million barrels of oil trapped in the Gulf since February re-enter global markets. Saudi Arabia and the United Arab Emirates have restored exports to near pre-war levels, aided by US military protection and pipeline bypass routes, while OPEC+ agreed July 5 to further increase output targets from August.

The flood of supply has pushed Brent into contango — a structure that incentivizes storage — and prompted warnings from Morgan Stanley and Goldman Sachs of a potential glut heading into next year. Yet for LNG-dependent importers like Bangladesh, the recovery in crude markets offers little relief. Gas cargoes remain constrained by infrastructure bottlenecks and the lingering effects of force majeure declarations by some suppliers during the conflict.

"We will pursue whichever option offers the most favorable commercial terms while ensuring the country's energy security," Mannan said, as Petrobangla weighs spot purchases against bilateral deals with alternative suppliers.

This article is for informational purposes only and does not constitute investment advice.