LNG has no pipeline out
Crude has partial bypass capacity. Liquefied gas does not, which makes it the cargo most completely tied to the strait.
The asymmetry
Discussion of the strait usually focuses on oil, because oil is what moves prices at the pump. But the pipelines that bypass the strait were built for crude, and liquefied gas cannot use them.
That leaves LNG in a different position: not partially covered, but wholly dependent on a single waterway.
Why gas cannot simply reroute
LNG logistics are far less flexible than crude. Cargo needs liquefaction plants at one end and regasification terminals at the other, and the specialised carriers that link them are a small fleet by comparison with tankers.
You cannot substitute a different supplier at short notice the way a refiner can switch crude grades. Much LNG moves under long-term contracts to specific terminals, so a disruption is not just a price event but a delivery failure against contracts.
Who feels it
Asian buyers take the largest share of Gulf LNG, and European demand for seaborne gas has grown substantially in recent years, which links the two markets more tightly than they once were. A supply interruption at the strait therefore propagates into gas prices well beyond the region.
The effect on general inflation can be sharper than for oil in economies where gas sets the marginal price of electricity.
Common questions
- How much LNG passes through the Strait of Hormuz?
- A large share of global seaborne LNG, dominated by Qatari exports. For the current figure use the EIA chokepoint brief or the International Gas Union, since the share moves with new supply coming online elsewhere.
- Can Qatar export gas without using the strait?
- Not in any meaningful volume. There is no pipeline route out that avoids it, which is why Qatari LNG is often described as the cargo most exposed to the chokepoint.