Shell Sees Global LNG Demand Rising 65% by 2050 Despite Challenges

Shell plc’s SHEL latest LNG Outlook 2026 reinforces the company's confidence in the long-term future of liquefied natural gas (LNG) despite the temporary market disruptions caused by the Strait of Hormuz crisis. While geopolitical tensions have slowed LNG trade growth in 2026, the company expects g…

Shell plc’s SHEL latest LNG Outlook 2026 reinforces the company's confidence in the long-term future of liquefied natural gas (LNG) despite the temporary market disruptions caused by the Strait of Hormuz crisis. While geopolitical tensions have slowed LNG trade growth in 2026, the company expects global demand to rebound from 2027 onward and increase by approximately 65% by 2050, driven by rising energy needs, particularly across Asia.

The report estimates that global LNG demand will approach 700 million tons annually by 2050, compared with 422 million tons traded in 2025. As countries continue to prioritize energy security while reducing emissions, LNG is expected to remain a vital part of the global energy mix.

Strait of Hormuz Crisis Creates Temporary Setback for SHEL

The disruption of shipping through the Strait of Hormuz has significantly affected the LNG market in 2026. Since the conflict began, approximately one-fifth of the world's monthly LNG supply has been impacted, resulting in higher spot market prices and slowing purchases from price-sensitive Asian buyers.

Although Shell had anticipated stronger LNG trade growth this year, the company now expects global LNG trade to remain broadly in line with 2025 levels if shipping conditions normalize during the summer. Should disruptions persist, supply could decline further. Nevertheless, Shell believes the market will regain momentum once logistical conditions improve.

Cederic Cremers, president of Integrated Gas at Shell, emphasized that despite the system-wide shock created by the conflict, the LNG industry has demonstrated remarkable resilience and adaptability. According to Shell, the crisis reinforces the importance of continued investment in LNG infrastructure while strengthening confidence in the fuel's long-term role in supporting global energy security.

LNG Market Demonstrates Greater Resilience

One of the key findings of Shell's outlook is the increasing resilience of the LNG industry. During the Middle East crisis, Asian spot LNG prices briefly exceeded $20 per million British thermal units (MMBtu). However, prices remained considerably below the extreme levels experienced during the 2022 energy crisis following Russia's invasion of Ukraine.

Shell attributes this improved resilience to several structural developments, including expansion of LNG liquefaction capacity in North America, improved performance at existing production facilities, growth in global regasification infrastructure and increased reliance on long-term supply contracts, which now account for roughly two-thirds of global LNG trade.

These developments have helped cushion the market against geopolitical shocks while providing greater stability for buyers and suppliers alike.

SHEL Anticipates Asia to Lead Future LNG Growth

Shell expects Asia to remain the primary driver of global LNG demand over the coming decades. South and Southeast Asia are projected to account for nearly 40% of global LNG imports by 2050, supported by growing populations, rapid industrialization and the transition away from coal-fired power generation.

As domestic gas production declines across many emerging Asian economies, LNG will play an increasingly important role in meeting future energy demand. The report also highlights the emergence of new demand sources, including electricity consumption from rapidly expanding data centers, particularly in developed Asian markets such as Japan.

Although LNG imports into China may moderate in the near term because of geopolitical uncertainty, Shell expects the country's overall natural gas demand to continue growing over the long term.

New Supply and Infrastructure Investments Remain Essential

To support rising global demand, Shell forecasts that approximately 180 million tons per year of new LNG supply will enter the market by 2030. However, the company notes that additional investments extending through the 2030s and 2040s will still be required, with around 200 million tons per year of further liquefaction capacity needed beyond projects already under construction.

Equally important is the expansion of downstream infrastructure. Shell emphasizes that importing nations — particularly in South and Southeast Asia — will need additional regasification terminals and pipeline networks to fully benefit from increasing LNG availability.

Without these investments, growing demand may outpace the infrastructure needed to deliver LNG efficiently to end users.

LNG's Expanding Role Beyond Power Generation

Beyond electricity generation, Shell expects LNG to gain further momentum in new applications. LNG bunkering is forecast to increase sevenfold to 27 million tons by 2035, reflecting the shipping industry's continued shift toward lower-emission marine fuels.

In Europe, LNG is expected to remain a critical component of energy security as domestic gas production declines and renewable energy sources require flexible backup generation.

These emerging applications reinforce LNG's expanding contribution across multiple sectors of the global economy.

A Decade of Remarkable Industry Growth

The 2026 edition marks the tenth anniversary of Shell's LNG Outlook. Since the inaugural report was published in 2017, the global LNG industry has experienced substantial growth. Global LNG trade has increased from 264 million tons to 422 million tons, China's LNG imports have expanded by approximately 250%, the number of LNG-importing countries has grown from 36 to 49 and LNG-fueled vessels have increased from 77 to more than 800 worldwide.

These milestones illustrate the industry's rapid evolution and growing importance within the global energy landscape.

Shell Remains Confident in LNG's Long-Term Growth

Shell believes that despite short-term geopolitical challenges, the long-term outlook for LNG remains exceptionally strong. Rising energy demand, increasing focus on energy security and the global transition toward lower-emission fuels are expected to sustain robust LNG growth well into the coming decades.

While the Strait of Hormuz crisis has temporarily disrupted market momentum, Shell expects the industry's growing resilience, expanding infrastructure and continued investment in supply capacity to support renewed growth beginning in 2027. As countries seek reliable, flexible and cleaner energy solutions, LNG is positioned to remain a cornerstone of the global energy system through 2050 and beyond.

SHEL’s Zacks Rank & Key Picks

London-based Shell is one of the primary oil supermajors — a group of U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL has a Zacks Rank #3 (Hold).

Investors interested in the energy sector may consider some top-ranked stocks like Global Partners LP GLP, ARKO Petroleum Corp. APC and Liberty Energy Inc. LBRT, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Global Partners is a Delaware limited partnership formed by affiliates of the Slifka family. It owns, controls or has access to one of the largest terminal networks of refined petroleum products in New England. The Zacks Consensus Estimate for GLP’s 2026 earnings indicates 113.1% year-over-year growth.

ARKO Petroleum is a fuel distributor in North America that operates through segments like Wholesale and Fleet Fueling. The Zacks Consensus Estimate for APC’s 2026 revenues indicates 41.5% year-over-year growth.

Liberty Energy is a leading North American oilfield services company, specializing in hydraulic fracturing and completion solutions. The company provides differentiated services through advanced technology integration and real-time data analytics. The Zacks Consensus Estimate for LBRT’s 2026 earnings indicates 66.7% year-over-year growth.

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