Gas markets have never been immune to geopolitics. The Russian invasion of Ukraine, triggering the worst energy crisis since the 1970s, is only the latest reminder. Until recently, LNG served as the flexible component of global gas supply, able to reach any market with an LNG import terminal and thus enhancing supply diversity.
The rise of spot LNG trading reinforced this flexibility. However, recent developments have turned LNG into a key instrument in the global geopolitical arena, sometimes overlapping with or even undermining market fundamentals.
Europe’s new energy dependence
As Russian pipeline supplies to EU countries dwindle, and are expected to stop entirely by January 2028, the EU is relying more heavily on LNG, especially from the US. In 2025, EU LNG imports are expected to exceed 140bcm, roughly matching the volume imported from Russia by pipeline in 2021. Around 60% of that LNG will originate from the US.
However, this growing relationship is not without friction. The EU is seeking to impose regulations that many LNG suppliers dislike, notably the EU Methane Regulation and the Corporate Sustainability Due Diligence Directive (CS3D). The Trump administration is pushing Europe to reconsider its methane rules, while Qatari energy minister Saad al-Kaabi warned that no Qatari LNG will be delivered to Europe unless the CS3D rules are softened.
LNG diplomacy
The major geopolitical shift in LNG history has been brought this year by the new Trump administration, which has begun wielding LNG as a bargaining tool in trade discussions, pressuring allies to sign US LNG contracts.
In Southeast Asia, Malaysia and Thailand have also pledged to purchase US LNG as part of broader trade agreements. Japan and South Korea, meanwhile, have built up on earlier commitments. For example, the White House’s October 2025 announcement that Kogas had bought an additional 3.3mt/yr of US LNG actually referred to agreements concluded during the summer. Still, both countries are also being pressured to commit to supplies from the Alaska LNG project, despite its weak economic attractiveness.
The so-called Turnberry deal foresees EU countries importing the equivalent of $750b worth of US energy over three years. However, the agreement raises more uncertainty than clarity: in 2024, EU countries imported only $88b of US energy, including $18b of LNG. Even a doubling of US LNG imports would hardly move the dial.
Ironically, by pushing countries to absorb defined volumes of US LNG, Washington may be undermining one of its key advantages: flexibility.
One key player, however, is pursuing its own course: China. Ongoing trade tensions have resulted in a complete halt of US LNG exports to China since 6 February 2025, due to Chinese tariffs on US LNG. Those shipments are now diverted to other markets. It is unclear whether the recent US-China agreement will usher a more stable period between the world’s largest LNG importer and exporter. Still, by maintaining the option of importing Russian pipeline gas via the planned Power of Siberia 2 pipeline, China is signalling to Washington that its LNG may not be indispensable.
Russia’s sanctioned gas finds a way
Since late August 2025, Russian LNG from the Arctic LNG 2 plant has been arriving at China’s Beihai import terminal, despite ongoing US sanctions on the Russian project. China has effectively made this terminal sanction-proof: owned by PipeChina, which has limited exposure to the dollar-based finance, it is dedicated exclusively to receiving LNG from this sanctioned Russian project. Whether other countries will dare to follow suit is questionable, as few can replicate what China has done. Still, the absence of US reaction could encourage them.
Beyond Arctic LNG 2, Yamal LNG will also need to secure new markets by January 2027, when additional EU sanctions take effect. Together, these developments could contribute to the emergence of a two-tier global LNG market, with one tier where Russian cargoes are discounted and distressed due to the bans and sanctions, and another that is driven by unsanctioned LNG trade.
The new LNG superpowers
By the early 2030s, the US and Qatar will account for roughly half of global LNG export capacity, and potentially an even larger share of actual LNG exports, as some older liquefaction plants become underutilised. This represents an unprecedented concentration of LNG supply, surpassing even OPEC’s share in global crude oil exports.
While Qatari LNG exports remain exposed to regional instability that could disrupt shipping through the Strait of Hormuz, US LNG operations face risks from hurricanes and flows to Asia due to congestion at the Panama Canal (though alternative routes are available). The key difference between the two exporters is that US LNG comes from various independently owned facilities, yet the interference from the new administration has been increasing beyond mere regulatory oversight.
As LNG trade becomes a tool of diplomacy, LNG markets once driven by efficiency and flexibility are being reshaped by politics. The next decade may reveal that LNG flows depend on trade and political agreements as much as on prices and fundamentals—a potentially challenging outlook at a time when LNG faces an unprecedented expansion.
Anne-Sophie Corbeau is global research scholar at the Center on Global Energy Policy at Columbia University SIPA. This article is taken from our Outlook 2026 report. To read Outlook in full, click here.
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