China LNG Imports Drop 18% Amid US-Iran Conflict

China's liquefied natural gas imports fell to an estimated 5.2 million tons in August, marking an 18% decrease compared to the same month last year. The Government of China is facing significant supply disruptions and price spikes resulting from the ongoing conflict between the United States and Iran.

Conflict in the region has essentially halted LNG traffic through the Strait of Hormuz, a critical transit point that typically handles one-fifth of global shipments and one-third of China's supply. This disruption, combined with a post-summer inventory refilling period, drove Asian LNG prices to an average of $21 per million British thermal units this month, up from $12 in August of the previous year.

High costs have caused demand destruction among price-sensitive industrial users. To mitigate the shortage, China is seeking alternative LNG volumes from Russia and Malaysia. Total imports for 2026 are now projected at 61.3 million tons, a decline from the 68.4 million tons recorded in the previous year.