LNG Contracts: Hormuz Crisis May Permanently Change Long-Term LNG Agreements
The LNG Contracts market could witness one of its biggest structural shifts after the Hormuz crisis exposed weaknesses in long-term supply agreements. A June 2026 study by the Oxford Institute for Energy Studies suggests future LNG Contracts will increasingly focus on supply security, cargo allocation and disruption management rather than only pricing flexibility. This Indian Petroplus analysis shows that while LNG prices may normalise over time, contractual frameworks are likely to evolve permanently.
For years, LNG agreements were negotiated during a period of abundant supply and growing market liquidity. The disruption affecting nearly 20% of global LNG supply shifted industry attention toward scarcity, forcing buyers and sellers to reassess force majeure provisions, shipping risks and cargo allocation mechanisms. The report notes that existing contracts often fail to clearly define obligations when deliveries are delayed, partially reduced or affected by wider portfolio constraints.
The study also identifies allocation of available LNG as one of the weakest areas in current contracts. Future agreements may include clearer rules for sharing limited supplies, restoring undelivered cargoes and managing take-or-pay obligations after disruptions end. Shipping clauses could also expand to cover war-risk insurance, alternate routes and operational feasibility.
According to Indian Petroplus analysis, the Hormuz crisis may leave its biggest impact on LNG Contracts rather than LNG prices. Future agreements are expected to prioritise resilience, recovery planning and supply continuity as geopolitical risks become a permanent feature of the global LNG market.
