Shell says Hormuz reopening will not restore pre-war LNG as Qatari trains need three to five years
Shell’s Cederic Cremers told Gastech in Bangkok on Monday that 36 million tonnes of Qatari and Emirati LNG is missing year to date versus 2025, and that an open strait would not restore pre-war flows overnight, with 12.8 million tonnes a year of Qatari capacity on a three-to-five-year repair clock.
Reopening the Strait of Hormuz would not put liquefied natural gas trade back where it stood before the war, Shell’s president of integrated gas told the industry’s main gathering on Monday, splitting a political event from a physical one.
“First of all, you have reopening, and then you have restoration. Those are still two very different things,” Cederic Cremers said at Gastech in Bangkok. “Even if we would see a normalisation or reopening of the Strait of Hormuz, I don’t think you would immediately go back to the type of flows that we saw before the war started.”
The comparison behind that warning is 36 million tonnes of Qatari and Emirati LNG that Cremers said has been absent year to date against 2025. About 20 million tonnes of that gap has been filled by new U.S. and Canadian volumes, according to his remarks as reported by The National. The rest was absorbed by demand destruction and storage withdrawals, the two cushions that kept the lights on and that are now thinner heading into winter.
Damaged trains, not just a closed strait
About one-fifth of global LNG trade moved through Hormuz in 2024, almost all of it from Qatar and the UAE, and the strait is those countries’ only route to international buyers. Iranian strikes earlier in the seven-month conflict knocked out two of Qatar’s 14 export trains, about 17% of national capacity, or 12.8 million tonnes a year. QatarEnergy has said repairs will take three to five years.
That is why Cremers refused to treat an open waterway as a restored market. Shell’s Pearl gas-to-liquids plant in Qatar, damaged early in the war, is expected back toward the end of the first quarter of 2027. “It’s not just restoration of production capacity itself,” he said. “It is also restoration of the actual marine flows, which will not be overnight either.”
The demand that was destroyed to close the gap can return faster than the supply. Deepak Gupta, chairman of GAIL, which imports LNG for India, told the same conference that prices have “hit through the roof” and are “definitely impacting” Indian demand because “a lot of sectors which are price sensitive.” China’s and India’s imports have fallen to multi-year lows as buyers burned coal and oil instead. Asian spot LNG was near $30 per million British thermal units this week, against a pre-war range around $10.
Gupta is hoping the squeeze is short-lived: he said 150 million to 200 million tonnes of new LNG may come online in the next four to five years, enough, in his view, to cool prices. That is new plants, not QatarEnergy’s repairs. A rebound in those cargoes, if prices ease, would hit a system that still has trains offline and shipping that has to be rebuilt. Cremers runs the book at the world’s largest listed LNG trader; he is not a bystander in the market he is describing.
U.S. gas is not that market. Henry Hub was at $2.90 per million British thermal units as of 11:53 a.m. Eastern Wednesday, a reminder that the shortage Cremers is describing sits in seaborne LNG, not in domestic U.S. pipeline gas.
Oil tanks have already done the heavy lifting
The oil side of the same shock has been running down the same class of buffer. In its September 11 Oil Market Report, the International Energy Agency cut its 2026 supply outlook to 100.7 million barrels a day, down 5.7 million barrels a day from 2025, and deferred a full recovery of Middle East supplies until 2027. It now sees 2026 demand falling 2.5 million barrels a day, concentrated in middle distillates and petrochemical feedstocks.
Inventories have been plugging the difference. Global observed stocks have fallen 507 million barrels since February, the IEA said: the tank buffer that absorbed the first phase of shut-ins, and that will not be sitting there for a second winter. The U.S. Energy Information Administration, in a Short-Term Energy Outlook finished on September 3, still had 6.7 million barrels a day of crude shut in as of August. That oil is not back, and the forecast does not include market events after September 3, so it does not capture the East-West pipeline shutdown that followed drone strikes from Iraq on September 10.
The EIA still has Brent averaging around $90 a barrel in the second half of 2026 and falling to $77 by the second quarter of 2027 as shut-in production restarts. Cremers is arguing that the shipping and plant work sitting under that restart will not happen on a switch.
European gas storage was 68% full as of September 12, the inventory that has to face winter with two Qatari trains still broken and North American LNG already counted in Cremers’ 20 million tonne offset. Equinor chief executive Anders Opedal warned in July that Europe may not fill storage to 80% before winter, because LNG that had been coming into Europe was going to Asia instead.
The funds that hold this, and the ones that do not
A holder of S&P 500 energy stocks does not own Shell. The $42 billion Energy Select Sector SPDR XLE is Exxon Mobil at 20.3% and Chevron at 15.3%, with the rest in U.S. producers, refiners and midstream names. It was at $64.59, down 2.0% as of 12:20 p.m. Eastern Wednesday.
The fund that actually holds Shell in size is the iShares Global Energy ETF IXC, where Shell is 7.3%, the third-largest position after Exxon and Chevron. It was at $59.39, down 2.0%. Direct crude sits in futures wrappers that roll near-month contracts and issue a K-1: the United States Oil Fund USO at $156.23, down 3.5%, and the United States Brent Oil Fund BNO at $61.57, down 3.1%.
Oil futures doubled this year; energy stock ETFs did not
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Brent crude was at $105.18 a barrel and West Texas Intermediate at $101.92 as of 11:53 a.m. Eastern, giving back part of Tuesday’s jump after Saudi Arabia’s East-West pipeline was shut. Shell plc shares were at $96.51, down 2.5%.
Spare liquefaction, tanks, and ships that could be sent somewhere else have already been used. If the buyers Gupta describes come back when prices ease, they will be bidding against a Europe that has to heat homes from storage already short of its fill target. Cremers has already named who pays: when shortages drive spot prices higher, he said, customers with the least ability to pay face the heaviest burden.
Frequently asked
What did Shell say about reopening the Strait of Hormuz?
Cederic Cremers, Shell’s president of integrated gas, told Gastech in Bangkok on Monday that reopening and restoration are different things, and that even a normalised strait would not immediately bring back pre-war LNG flows.
How much Qatari and Emirati LNG is missing?
Cremers said 36 million tonnes has been absent year to date compared with 2025. About 20 million tonnes of that gap has been filled by new U.S. and Canadian volumes; the rest was absorbed by demand destruction and storage withdrawals.
How long will Qatar’s damaged LNG trains take to repair?
Iranian strikes knocked out two of Qatar’s 14 export trains, or 12.8 million tonnes a year. QatarEnergy has said repairs will take three to five years. Shell’s Pearl gas-to-liquids plant in Qatar is expected back toward the end of the first quarter of 2027.
Which ETFs hold this exposure?
The Energy Select Sector SPDR XLE holds S&P 500 oil and gas stocks and no Shell. The iShares Global Energy ETF IXC holds Shell at 7.3%. Direct crude sits in the United States Oil Fund USO and the United States Brent Oil Fund BNO, which roll near-month futures and issue a K-1.