Global energy market insights

Key takeaways

• Global Liquified Natural Gas (LNG) markets remain highly exposed to disruption, with Middle East instability tightening supply and increasing price volatility.  
• Competition for limited LNG supply has intensified, particularly across Asia, supporting higher prices and short-term revenue opportunities for exporters such as Australia.  
• Higher energy and transport costs are flowing on to Queensland businesses, adding to cost pressures across non‑energy sectors.  
• The Federal Government has proposed a domestic gas reservation scheme to improve domestic supply and price stability for Australian use. 

Opportunities in a volatile market 

LNG markets rely on a relatively small number of producers to meet global demand and therefore are sensitive to geopolitical disruption.  

Energy markets have historically been influenced by major shocks that impact supply, pricing, and trade flows. Past energy disruptions include the 1970s oil shock, and the recent Russia-Ukraine 2022 conflict that constrained available supply and sent prices surging.  

LNG markets remain exposed to geopolitical disruption, price volatility and shifting supply routes. The Middle East conflict has tightened short-term LNG availability resulting in increased competition among global LNG consumers to secure alternative supply sources, particularly across Asia. 

The closure of the Strait of Hormuz, a critical LNG shipping route, has removed an estimated 1.5 million tonnes of LNG per week from global markets (19% of global LNG exports). Market pressures are further impacted by the damage of the world’s largest LNG export complex (Qatar Ras Laffan), which accounts for approximately 80 million tonnes of LNG production annually (20% of global supply).

With disruptions impacting both LNG production and transport, global buyers are beginning to seek alternative suppliers to secure energy needs, particularly across Asia. As a result, LNG prices have risen above USD$20 per Million British Thermal Units.  

Australia remains one of the world’s major LNG exporters, with Queensland playing a significant role through its three purpose-built LNG export facilities on Curtis Island. Approximately 90% of Australian LNG exports go to Japan, China, South Korea and Taiwan. In 2024–25, Queensland supplied more than 24 million tonnes of LNG globally.  

The current shortage of LNG, supporting higher global prices and creating opportunities for energy producers and related supply chains (favourable contracts and new markets). However, existing facilities are currently operating at capacity and additional resources require investment and development to increase production. Meanwhile, higher energy prices and fuel costs are flowing through to electricity, retail gas and transport costs, impacting production and logistics costings for exporters in energy intensive sectors such as manufacturing, agriculture, and mining. 

What it mean for Queensland exporters 

• Elevated LNG prices support exports for Queensland LNG producers by increasing revenue per shipment, strengthening the value of contracts and improving margins of LNG. Related supply chains also benefit from the increased production activity, engineering, maintenance, logistics and specialist services linked to production and export operations.
• Disruptions tomajorMiddle East suppliersareincreasing demand for alternative LNG suppliers, including Australia.

As higher global LNG prices flow through to domestic energy consumers, this will likely increase input costs for businesses across all sectors. 

• To support energy consumers, the Federal Government has proposed a domestic gas reservation scheme requiring LNG exporters to supply gas to the Australian market(equivalent to 20% of their export volume)from 1 July 2027.
• For LNG producers, this scheme may impact future export flexibility by introducing domestic supply obligations, limiting the ability to redirect volumes to higher-value international markets and influence long-term contract arrangements. 
• For other non-LNG businesses, this scheme aims to improve domestic gas availability and reduce exposure to global LNG price spikes(subject to final policy and market response).

The practical impact for Queensland exporters will depend on domestic gas pricing, the availability and structure of supply contracts and production capacity constraints, as well as the timing and extent to which global wholesale energy prices being passed through to domestic supply chains.