The situation in the Middle East has escalated, leading to a disruption in the supply of about 20% of the world's liquefied natural gas (LNG), and the Asian spot LNG price has surged by 70%, reaching a three-year high. Faced with a natural gas supply crisis, Asian countries such as China, India, and South Korea have resorted to using coal to supplement the energy gap and ensure the stability of supply through fuel switching, highlighting the critical role of energy structure diversification in addressing geopolitical risks.

The direct trigger of this energy supply shock is Qatar's suspension of LNG production. As the core LNG supplier in Asia, Qatar has shut down the production facilities of the world's largest LNG complex, Ras Laffan, and issued force majeure notifications to its customers. At the same time, the navigation of the Strait of Hormuz has been blocked, leading to a stagnation in the transportation of energy relying on this channel. The Asian region absorbed 85% of Qatar's LNG exports, and the supply disruption has a direct impact on its energy system, with South Asian countries being the most affected.

Data shows that in 2025, LNG from Qatar and the UAE accounted for 53% of India's LNG imports, 72% of Bangladesh's, and 99% of Pakistan's. Due to the spot LNG price soaring to an unaffordable level, Pakistan and Bangladesh have basically withdrawn from the spot market.

Compared with the 70% surge in LNG prices, coal prices have only increased by about 14%, creating a significant cost advantage. China and India, as the world's largest consumers and importers of coal, have strong fuel switching capabilities. Their thermal power systems can partially offset the impact of insufficient natural gas supply by increasing coal utilization. Dileep Bhardwaj, head of research for Asia-Pacific at ING, pointed out that the coal reserves in China and India can, to some extent, mitigate the impact of fluctuations in oil and gas prices.

The ability of different countries to respond to the crisis is differentiated. China's dependence on Qatar LNG is low, at only 6%, and its resilience in energy security is relatively strong; while South Korea and Singapore both have a high proportion of gas power in their power structure, not less than 1/4, and are highly dependent on spot LNG, facing greater supply pressure. Pakistan is alleviating its energy dilemma through demand management, fuel switching, and expansion of renewable energy, while Bangladesh has launched a natural gas quantitative supply mechanism.

Industry experts say the energy crisis has proven the strategic rationality of Asian countries' adherence to a diversified energy mix. Although coal cannot fully replace natural gas, it has effectively alleviated the impact of supply disruptions and won time for the adjustment of the energy system. With the global geopolitical situation complex and changeable, balancing energy security and decarbonization goals has become an important issue facing countries, and establishing a diversified and resilient energy supply system will be the core of energy development in Asian countries in the future.

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