China struggles with gas supply disruptions as prices rise

Disruption of liquefied natural gas (LNG) supplies from the Middle East will test the ability of major LNG buyers in the region, including Chinese importers, to withstand the consequences of a significant spike in spot gas prices, according to Chinese market experts and analysts.

According to Wu Xiao, Research Director for China Gas and LNG at S&P Global Commodity Insights, while Chinese buyers may view the short-term effects as manageable, partly due to lower seasonal demand and shipments already en route, a prolonged disruption could fundamentally reshape China's long-term energy security calculations. Spot LNG prices have risen notably since the United States and Israel launched joint strikes on Iran on February 28. Platts, part of S&P Global Commodity Insights, assessed the Asian gas price—a benchmark reflecting LNG prices exported to Northeast Asia—at $25.39 per million British thermal units on March 3, up from $10.70 per million Btu on February 27. According to S&P Global Commodity Insights data, China's LNG imports from Qatar and the UAE will account for about 30% of its total LNG imports in 2025. However, because China also has access to pipeline gas imports from Russia and Central Asia, as well as its domestic gas production, imports from Qatar and the UAE represent only about 6% of total gas supply. With an average shipping time of 19 days, LNG cargoes currently en route to China are expected to arrive in the first half of March, with the impact likely to be felt on cargoes scheduled for late March and April, according to Xiao. He said a complete halt would require six replacement cargoes for a one-week disruption, 26 cargoes for a month, and 78 cargoes for three months.