March 26, 2026 [Oil Price]- The war in the Middle East and the halt of about 20% of global LNG trade flows are strengthening the case for increased LNG exports out of Western Canada.

The political stability and the proximity to Asian markets make Canada’s Pacific Coast the perfect source of additional LNG supply to ease the strain on gas markets, which suddenly flipped from an expected glut for the rest of the decade to a major supply shortage that would take years to overcome.

Canada would have been ideally positioned to fill in the gap. If only it had more than one LNG export plant, which, by the way, started commercial operations less than a year ago.

Other LNG export projects, as well as an expansion of LNG Canada, the only operational facility, have been proposed in recent years.

As the war slashes global LNG supply, developers of Western Canadian projects feel more confident in reaching final investment decisions soon.

Yet, Canadian supply cannot help ease the current supply disruption. It would only add LNG volumes on the market at the end of this decade or even later.

So Canada has the chance to approve more LNG projects now, but will not materially help with additional LNG supply in the near term, when the market needs it the most.

Qatar’s state firm QatarEnergy last week said it expects the damage from Iranian missile strikes at the Ras Laffan LNG complex, the world’s single largest LNG-producing facility, to cost it about $20 billion per year in lost revenue and to take up to five years to repair.

The damage has removed a large part of the global LNG supply for months, if not years, while the de facto closure of the Strait of Hormuz has curtailed all Middle Eastern LNG exports transiting the chokepoint, including from Qatar and the United Arab Emirates (UAE).

North Asian buyers such as South Korea, Taiwan, and Singapore are the most vulnerable to the Qatari LNG outage, according to estimates by Vortexa.

Asian LNG importers are now scrambling for spot LNG supply.

Many will be pushed to seek and contract LNG supply from producers outside the Middle East, such as the U.S. and Canada, if a prolonged war continues to choke supply from the Gulf region, a senior executive at Japan’s biggest LNG buyer, Jera, told Reuters last week.

LNG Canada has been boosting its exports to Asia in recent months, even before the war erupted and trapped 20% of global supply in the Middle East.

South Korea has been the primary destination for Canadian LNG to date, RBC Capital Markets said in a note earlier this week.

Canadian oil and gas are expanding their export base, but remain U.S. centric, the RBC analysts wrote, but noted that “Over the long term, Canada could likely serve a more meaningful role in de-risking Asian supply.”

Canada has several LNG projects in the works, but none of them has reach FID yet. The war in the Middle East and the Asian market’s need for security of supply could fast-track investment decisions.

It remains to be seen if Canada’s federal and provincial governments will move to seize the opportunity by accelerating permitting processes.

LNG Canada Phase 2 is actually the first on the list of five major projects of national importance, which Canadian Prime Minister Mark Carney proposed last autumn to diversify Canada’s energy exports from the United States and make it an energy superpower.

The Middle East war makes the LNG Canada expansion more likely, TC Energy chief executive François Poirier said at CERAWeek in Houston earlier this week, although he noted he wasn’t privy to the thinking of Shell and the other shareholders in the project.

“Canada should aspire to being the largest exporter of LNG to Asia,” Poirier said.

There is sufficient demand for Canadian LNG to underpin the LNG Canada expansion as well as the investment and construction of Ksi Lisims LNG, a proposed floating LNG export facility on a site owned by the Nisga’a Nation in British Columbia, the executive said.

“There is a need for them to partner with somebody, and my view is that the odds of that project getting permitted are getting better by the day, given the overall tone in the marketplace,” Poirier told the Financial Post last week, referring to the Ksi Lisims LNG project.