China's liquefied natural gas demand is unlikely to recover from Middle East turmoil, despite the recent ceasefire. Chinese LNG imports fell 11% last year to 68.4 million tons, marking the first decline in nearly two decades. BloombergNEF forecasts another drop to 62.3 million tons in 2026, while Rystad Energy predicts a slight rise to 70 million tons.

Before US and Israeli strikes on Iran disrupted Persian Gulf supplies, China's gas demand was already weakening as the economy slowed. Apparent consumption declined 0.9% in the first two months of the year, extending weakness through 2025. The destruction of two Qatari LNG trains at the world's largest export facility could remove 12.5 million tons of annual capacity over the next three to five years, according to BNEF.

Faced with supply constraints, China is likely to reduce exposure to the Persian Gulf market. The country may increase reliance on domestic production and overland gas pipelines from Russia and Central Asia. Asian benchmark spot LNG futures nearly doubled in March to about $20 per million British thermal units, while China's equivalent market rose only 44% to about $15 mmbtu. Industries have scaled back operations, coastal power plants are limiting gas usage, and importers are capping retail prices, putting pricier LNG at a bigger disadvantage.