In the rapidly evolving energy landscape, small business owners must stay alert to global trends affecting supply chains and market dynamics. A newly released analysis from the U.S. Energy Information Administration (EIA) highlights the crucial role the Strait of Hormuz plays in the liquefied natural gas (LNG) trade—a fact that increasingly impacts small businesses, especially those reliant on energy.
In 2024, roughly 20% of global LNG trade passed through the strategically vital Strait of Hormuz, predominantly shipping exports from Qatar. With Qatar exporting about 9.3 billion cubic feet per day (Bcf/d) of LNG, along with the United Arab Emirates (UAE) contributing 0.7 Bcf/d, this region has become a linchpin for energy markets, particularly for Asian economies. This transportation route is not merely a transit point; it is integral to energy supply chains that affect prices and availability of energy resources worldwide, including in local markets.
According to the EIA analysis, a significant 83% of the LNG passing through the strait in 2024 was directed from Gulf countries to Asian markets, namely China, India, and South Korea. These three nations accounted for 52% of LNG flows through Hormuz, highlighting a shift in trade patterns driven partly by U.S. LNG exports to Europe. Disruptions in the Bab al-Mandeb Strait, which impacts routes connecting the Red Sea to the Gulf of Aden, have further compounded this shift, resulting in heightened competition for Asian markets.
For small business owners, understanding these dynamics is critical. The global energy supply can significantly influence operating costs, given that energy often constitutes a substantial portion of overall expenditures. A stable or increasing demand for LNG in Asia could lead to higher prices domestically as suppliers prioritize exports to more lucrative markets. This scenario is particularly relevant for businesses reliant on natural gas for heating, manufacturing, or logistics.
A noteworthy development is Kuwait and the UAE’s increased imports of LNG from outside the Persian Gulf, including shipments from the United States and West Africa. Furthermore, the arrival of Bahrain’s new LNG import terminal in April 2025 marks a notable expansion of the region’s LNG infrastructure. This diversification strategy may help stabilize supply in the Gulf while enhancing energy security for neighboring countries.
However, while these developments promise a more robust supply chain, they also pose challenges. The complex interplay of geopolitical factors, such as tensions in the region or international sanctions, can lead to sudden disruptions in LNG flows. If a major market such as Asia tightens its grip on LNG supplies, small businesses in the U.S. could face barrel price hikes and supply shortages.
Energy market expert Candace Dunn emphasized the crucial need for vigilance among small business owners. “Understanding the global LNG trade routes and how they impact local markets can provide small business owners with a competitive edge,” she stated.
For practical application, small business owners should consider strategies to mitigate the risks associated with fluctuating energy prices. Investing in energy efficiency measures, exploring alternative energy sources, or even negotiating long-term contracts with local energy providers can be viable solutions.
Moreover, keeping an eye on international developments and trends in the LNG market will allow businesses to make informed decisions. Engaging with local chambers of commerce or energy-focused business groups can provide insights and support in navigating these complexities.
Overall, the unfolding narrative of LNG trade through the Strait of Hormuz underscores the interconnectedness of global markets. For small business owners, awareness and adaptability in the face of these changes could be the difference between sustainable growth and unforeseen challenges in an ever-evolving energy landscape.
For those looking for in-depth insights, the original EIA analysis can be accessed here.
Image Via Envato: wirestock
