Sizing up the LNG glut (part 2)
DEEP DIVE: The future of energy ain’t what it used to be
In the depths of the 2025 winter, the notion of an LNG ‘glut’ might feel like a fantasy; a bedtime story to help panicked buyers and politicians sleep at night, as a tsunami of geopolitical and fundamental forces whips European natural gas prices back to the destructive highs of 2023.
Yet here lies the paradox: today’s scarcity and tomorrow’s surplus are not opposing forces, but two chambers of the same hourglass — one depletes only to fill the other, like an unbroken cycle of inevitability.
The market is caught in a hall of mirrors. Every tremor — a sudden cold snap in Beijing, a wind lull in the North Sea, a Russian gas valve tightened ‘off’, an outrageous speech designed to inflame Middle East tensions further — distorts the view of what comes next.
The long-anticipated LNG glut is both a mirage and a mathematical certainty, a future so inevitable that shellshocked policymakers and impossibly bullish speculators dare not contemplate it — even as the world’s next wave of LNG megaprojects creeps toward completion like glaciers sliding into the rapidly warming sea.
This is a story of time horizons colliding. The present is governed by the raw physics of winter and the blinding psychology of war, where the profit from each LNG cargo is spiralling above $35 million, and import-dependent nations hoard these precious molecules as if they were sovereignty incarnate.
But the future hums with a different calculus: more than 200 million tonnes of new LNG capacity, now under construction, could flood the market before 2030. The same ships steaming across the Atlantic to feed shivering European cities may soon idle laden in northern hemisphere seaports, waiting for a murmur of a contango.
The pendulum will swing from famine to feast — but how fast, how far, and with what consequences?
To trace LNG’s arc from 2025’s fever dream to 2030’s reckoning is to confront more than supply-demand curves. It is to ask which version of the 21st century is starting to prevail at this precarious moment in history.
Will Asia’s booming billions embrace liquefied natural gas to fuel their industrialisation and aspirational middle classes, or double down on domestic coal and renewables?
Will Europe’s green dogma survive a neopopulist backlash after almost a decade of energy poverty?
Can Qatar and Texas coexist in a market where margins dissolve?
For how long will the pocked dam of Western sanctions hold against the developing world’s clamour for forbidden Eurasian and Persian resources?
The LNG glut is diminishing in our minds even as it looms into view. But before internalising this inexorable phase shift in reality, we must first survive the squeeze.
This mini-series started as an attempt to gauge the likely length and depth of oversupply, and what might follow. It quickly ran into impossibly complex questions at the heart of the energy transition.
Part one set the scene by applying an historical lens to how the transition to looser market conditions might unfold.
Part two (this post) grapples with conflicting visions of the future — the narratives that will define role of LNG in a fracturing world where every choice is a gamble with compounding stakes and fractal outcomes.
This is the most complete and nuanced take on the long-term future of LNG in the global energy matrix that you are likely to read all year. It is the product of long conversations with leading energy thinkers and commercial analysts, and countless hours of rumination over how to reconcile myriad countervailing economic, commercial and geopolitical forces at play.
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