The closure of the Strait of Hormuz on February 28, 2026, and the subsequent QatarEnergy force majeure declaration on March 4 have produced one of the most violent price dislocations in the history of Asian LNG markets. The Japan Korea Marker — the benchmark for spot LNG deliveries to Northeast Asia — has more than doubled from pre-crisis levels, with the forward curve now implying structurally elevated pricing for years to come. (FACT: EIA, April 28, 2026; Reuters, March 4, 2026)
The price trajectory. On February 27, the day before the US-Israeli strikes on Iran and Iran's retaliatory closure of the strait, JKM front-month futures stood at just $10.73/MMBtu. (FACT: Seoul Economic Daily, citing KEPCO data, March 21, 2026) Within days of the crisis unfolding, spot JKM for April delivery had spiked nearly 60% to $25.40/MMBtu — the highest level since 2023 — as QatarEnergy declared force majeure on LNG deliveries and the full scale of the supply disruption became apparent. (FACT: Gas Outlook, March 2026; Wikipedia, Economic Impact of the 2026 Iran War)
By the week ending April 24, the EIA reported that JKM front-month futures had risen 51% to $16.02/MMBtu relative to pre-closure levels, as over 10 Bcf/d of global LNG supply — approximately 20% of the global total — remained locked behind the blockade. (FACT: EIA Today in Energy, April 28, 2026) JKM then oscillated between the high-USD 16s and low-USD 18s throughout early May, before settling into the $18–19/MMBtu range by mid-to-late May. (FACT: Global LNG Hub, May 7 and May 18, 2026) The CFD proxy for LNG JKM traded at $18.92/MMBtu on May 21, 2026, up roughly 17% over the prior month and 53% year-on-year. (FACT: TradingEconomics, May 21, 2026)
Why JKM is outpacing TTF. A key feature of the current crisis is the persistent JKM premium over TTF. Asian buyers currently pay approximately $1–$3/MMBtu more than their European counterparts for spot LNG cargoes. (FACT: Euronews, March 25, 2026) This premium widened further in May: Goldman Sachs reported that the JKM premium over TTF rose to $1.87/MMBtu in May from $1.59/MMBtu in April, signalling firmer Asian appetite for spot cargoes. (FACT: Goldman Sachs via Reuters Economic Times, May 15, 2026)
There are structural reasons for this divergence. Asian buyers imported over 80% of Qatari LNG before the crisis — an estimated 59% of all LNG transiting the Strait of Hormuz was destined for China, India, Japan, and South Korea. (FACT: Wikipedia, 2026 Iran War Fuel Crisis; EIA, April 28, 2026) When QatarEnergy declared force majeure, these buyers lost contracted term volumes that cannot be easily replaced on the spot market. Asian natural gas storage capacity is also substantially less than Europe's, leaving the region with a thinner buffer against supply shocks. (FACT: EIA, April 28, 2026) The higher returns available in Asia are prompting traders to divert flexible Atlantic basin cargoes eastward, further tightening the European market and creating a feedback loop of competitive bidding. (FACT: Euronews, March 25, 2026)
KEPCO and the utility squeeze. The impact on Asian end-users is already acute. Korea Electric Power Corporation (KEPCO) posted a first-quarter operating profit of 3.8 trillion won in 2026 — but that was before the full force of the LNG price surge hit its fuel procurement costs. (FACT: Seoul Economic Daily, May 13, 2026) JKM stood at $10.73/MMBtu on February 27 but surged to $22.35 by March 19. KEPCO's management has warned that the utility could swing back to a deficit by year-end if JKM remains elevated, as LNG accounts for nearly 30% of Korea's total power generation. (FACT: Seoul Economic Daily, May 13, 2026)
Forward curve signals multi-year repricing. The JKM forward curve has not followed prompt prices lower — a classic signal that the market expects structural tightness to persist. The IEA projects a cumulative loss of roughly 120 billion cubic metres of LNG supply between 2026 and 2030. (FACT: IEA, April 2026) Consultancies S&P Global, ICIS, Kpler, and Rystad Energy have collectively cut global LNG supply outlooks by up to 35 million tonnes through 2028. (FACT: Reuters, March 26, 2026) The key question for Asian buyers is not whether JKM will come back down — it is at what level the new structural floor will settle.
Asian LNG buyers should assume a structural JKM floor of $16–$20/MMBtu for at least the next 18–24 months, with significant upside risk from summer cooling demand and any further Middle East escalation. The JKM premium over TTF is likely to persist as Asian buyers compete for every marginal cargo. Key actions: (1) Lock in forward volumes at current levels — the curve implies further upside, not mean reversion; (2) Diversify supply sources toward US, Australian, and African LNG — but note that US export terminals are running near full utilisation; (3) Monitor KEPCO and Japanese utility hedging activity as a signal of institutional positioning; (4) Prepare for potential demand rationing in price-sensitive Asian markets such as Pakistan, Bangladesh, and India, which will be squeezed out of the spot market by wealthier Northeast Asian buyers.