Following the energy crisis caused by the war in Ukraine, European countries made a shift from using Russian oil to purchases of liquefied natural gas (LNG), especially from Norway and Qatar. Now, with the interruption of part of shipments from the Middle East due to the closure of the Strait of Hormuz, this strategy has become a new risk.
In an article for the European Council on Foreign Relations (ECFR), senior public policy researcher Agathe Demarais highlights that LNG now accounts for almost half of EU gas imports, compared to just 20% in 2021.
But there are now doubts about the continuity of this process. Before the war in Iran began, the EU’s expectation was that new LNG supplies, coming in this year and in 2027, would help the bloc finally completely wean itself off Russian hydrocarbons. But the damage from Iranian attacks on the Ras Laffan complex in Qatar, the largest in the world, brought a strong degree of uncertainty.
Situated on the north coast of Qatar, Ras Laffan took three decades to build and covers an area approximately three times the size of Paris. The site routinely ships about a fifth of global LNG supply.
Also read:
In mid-March, says the researcher, Iranian missiles destroyed two of its 14 liquefaction trains and one of its two gas-to-liquid conversion units — eliminating 17% of the complex’s production capacity and 3% of global LNG production. She explains that there is no quick solution to resuming shipments. Liquefaction requires cryogenic treatment at -162°C, in an infrastructure that will take years to rebuild.
Continues after advertising
According to Demarais, the consequences of Ras Laffan will be enormous for Europe. QatarEnergy, which operates the facility, declared force majeure to suspend some deliveries. Added to disruptions among other Gulf LNG producers, global LNG supplies are now about 20% below where they were a year ago.
“As European, South Korean and Japanese companies compete to secure limited shipments, spot prices have reached their highest level since the 2022–2023 energy crisis. The economic pain will be uneven within the bloc, with Italy and Germany hardest hit,” he details.
Italian Edison is among the companies whose contracts with QatarEnergy have been suspended. Germany does not depend on Qatari LNG, but is exposed to the price shock because gas accounts for almost 30% of its energy mix.
The expert says the long-term outlook is even bleaker. Before the war, a wave of new projects — especially in Qatar and the U.S. — appeared poised to boost global LNG supply by 20% in 2026 and 2027. There were so many projects coming online simultaneously that industry experts feared an oversupply.
“Today, such an excess appears highly unlikely. The International Energy Agency projects that global LNG supply between 2026 and 2030 will be about 15% below pre-war forecasts, with most of this gap concentrated in 2026–2027,” it reports.
The ECFR researcher also says that, in addition to the impact on Qatar, limited US engineering capacity and tariffs are additional bottlenecks. Few companies — Bechtel (USA), Chiyoda (Japan), JGC (Japan) and Technip Energies (France) — bring together the technical know-how, track record and balance sheet strength needed to deliver projects that can cost tens of billions of dollars.
Continues after advertising
QatarEnergy estimates that repairs at Ras Laffan will take three to five years, taking up already scarce engineering capacity and delaying greenfield projects around the world. Meanwhile, U.S. projects face a self-imposed hurdle: U.S. tariffs on imports of specialized equipment, such as cryogenic-grade 9% nickel steel, are driving up the costs of new LNG plants. Taken together, these pressures point to a slower and more expensive delivery of the LNG supplies that Europe has been banking on.
Options for the EU
Demarais predicts that dependence on American LNG will deepen, as only US companies can fill the gap left by Qatar at the speed Europe needs — and they already supply almost 60% of the EU’s LNG imports. “Optimists may see this as an opportunity to smooth relations with the White House by committing to buy more LNG from the US, something that would probably happen anyway. A more sober reading is that US President Donald Trump will use Europe’s dependence on American LNG to extract concessions from the bloc”, he warns.
On the other hand, as the gas market tightens, calls for the EU to ease sanctions on Russian hydrocarbons could grow. Under RePowerEU, imports of Russian LNG should be gradually phased out; a ban on short-term LNG contracts came into force on April 25, and deliveries under long-term contracts will be prohibited from January 2027.
Continues after advertising
“The conflict in Iran could complicate this plan. Slovakia has long been pushing for a postponement of this schedule, and pressure from the industrial sector could push the governments of Italy and Germany in the same direction. The risks of fragmentation in the EU are high, as other large member states, such as France (thanks to nuclear energy) and Spain (thanks to renewables), are largely protected from rising gas prices.”
The third possibility mentioned has to do with the prospects of European industry. A 2024 report by former European Central Bank President Mario Draghi named high energy costs as a central challenge for the continent’s industry. “Two pieces of data help to size up this challenge. First, European industrial companies pay four to five times more than their American competitors for gas. Second: electricity prices for energy-intensive industries are, on average, double those charged in the USA and 50% higher than in China and India”, he compares.
“The LNG shock is likely to widen this gap, particularly for highly energy-intensive sectors such as chemicals, fertilizers and steel. This will leave EU industry at an even greater disadvantage compared to American and Chinese rivals.”
Continues after advertising
In the researcher’s assessment, when the Strait of Hormuz reopens, the headlines will change focus. Europe’s problem with LNG is not. In other words, the strategy that Brussels designed in 2022 to escape Russian gas is now stuck in the Ras Laffan repair queue.
“This will give Washington and Moscow new room for maneuver over Europe, while further darkening an already bleak industrial outlook. In the medium and long term, the obvious option for the bloc will be to redouble its bets on reducing demand, expanding renewables and accelerating the integration of electricity grids. But in the short term, the Europeans have no easy way out of the LNG chokehold.”
