Market Summary: Japanese LNG imports were 8.26 MMt across 140 cargoes from 12 suppliers in April-May 2026, down 20pct on the prior period and 13pct year on year. Part of the sequential fall is seasonal, Feb-Mar being the winter heating peak, but the year-on-year decline strips that out and points to genuine demand softening. Australia led with 3.24 MMt (39.2pct), followed by Malaysia at 1.34 MMt and the United States at 0.94 MMt.
Supply Concentration
The HHI stood at 2,132 for the period, in the moderate band, down 350 points on the prior period and 303 below the year-earlier 2,435. Concentration eased on both pooled comparisons as Australia's period share contracted and mid-tier origins gained. The monthly path was less smooth: at Japan's cargo count single-month readings are volatile, and a soft April (1,813) gave way to a May reading of 2,625 in the concentrated band as Qatar stayed absent and volume bunched into Australia and the US. The six-month average, near 2,190 and flat-to-down, remains the reliable signal and is consistent with the period easing rather than the monthly endpoint.
Price Context
There was no physical shortage; cargoes kept arriving and supply security held. The spot market repriced hard, but much of Japan's volume does not price off spot, so the disruption reached the country by two slower channels rather than the headline marker: a lagged pass-through via oil-indexed contracts, and a drawdown of stored gas across the period itself.
Northeast Asian spot prices climbed steeply. The EIA put the front-month Japan-Korea Marker up 51pct from its late-February level to USD 16.02/MMBtu in the week to 24 April, while European TTF rose 35pct and US Henry Hub fell 9pct, the loss of Gulf supply lifting the two import basins while ample domestic wellhead gas supply held the US benchmark down. The marker firmed into the low USD 18s by end-April and traded near USD 18.9/MMBtu in early June, around 52pct above a year earlier, holding in the high teens through May, a path echoed at the SHPGX landed marker in China.
Japan's shielding from that spike was only partial. Much of the legacy long-term book still prices off the Japan Crude Cocktail rather than JKM, and the newer US volume off Henry Hub, so the spot move largely bypassed both. That is insulation from the spot market, not from the crisis: the cocktail is itself overwhelmingly Middle Eastern crude and has climbed with it, reaching USD 101.2/bbl in April on Ministry of Finance data, a record in yen terms given the weak currency. That landed crude cost feeds into the oil-indexed portion of the book with a further contract lag, while the growing Henry Hub-linked share is exposed instead to a US benchmark that fell during the episode, so the oil-channel increase reaches Japan's bill later and across a shrinking part of the portfolio. A separate, immediate factor lifted household bills from the start of April, independent of wholesale pricing: the government's January-to-March electricity and gas subsidy lapsed.
Through the period the adjustment showed up in inventory rather than in arrivals. Cargo deliveries fell about as much as in a normal spring, the second-steepest drop of the past four years but within the seasonal range, so the disruption barely registers in the cargo count. It registers in the stock path. Spring is when utilities normally rebuild ahead of summer; in 2026 they drew down instead. On METI's weekly monitoring, weekend power-sector LNG stocks fell from 2.28 MMt in mid-April to 1.90 MMt at end-May and 1.80 MMt by 7 June, slipping from above both the prior-year and five-year-average benchmarks to roughly 0.27 MMt below the 2021-to-2025 average and 0.42 MMt below a year earlier, when stocks had been building. Ongoing nuclear restarts and probably additional coal-fired output, after METI suspended the utilisation cap on inefficient coal plants for FY2026, lowered baseload LNG demand; our read is that the same substitution also widened the room to draw stocks down rather than chase cargoes at the elevated marker. Declining to restock, and deferring or trimming flexible scheduled volume where contracts allowed, are not separable in the arrivals data, but their combined footprint is a buffer run down rather than replenished. The period's distinctive cost is therefore a thinner cushion carried toward summer.
Market Highlights
What the year-on-year decline reflects is largely a single development. TEPCO's Kashiwazaki-Kariwa Unit 6 in Niigata reached commercial operation in April, with government estimates putting its displacement at roughly 1.3 MMt of LNG a year once fully online, and the restart sits within Prime Minister Takaichi's stated push to lean on nuclear and coal to cut LNG dependence and harden energy security. It is the arithmetic of a smaller national requirement, not any single supplier decision, that drives most of the supplier-level movement below.
The Gulf recedes further
Japan's physical LNG exposure to the Strait of Hormuz is modest at approximately 4 per cent of imports, essentially limited to Qatar. Oman's Qalhat export terminal sits outside the strait on the Gulf of Oman coast. This stands in sharp contrast to crude oil, where 94 per cent originates in the Middle East.
Qatar delivered nothing this period, as it has in effect since QatarEnergy's March force majeure and the closure of the Strait of Hormuz. The closure removed something over a fifth of global LNG supply, the bulk of it Qatari volume from Ras Laffan. The strait keeps Qatari supply out rather than having newly removed it; the zero reading is the continuation of that constraint. The one exception was a single UAE cargo from Das Island (0.05 MMt), consistent with passage being possible only in limited circumstances. Oman, whose Qalhat terminal sits outside both the Persian Gulf and the strait, continued to export and delivered 0.19 MMt across three cargoes. Hormuz-transit supply, Qatar plus the UAE, accordingly fell from 5.2pct of intake in Feb-Mar to 0.6pct, while non-Hormuz Omani volume persisted.
Oil versus LNG exposure
The episode underscores an asymmetry between Japan's two main hydrocarbon imports. Its LNG reliance on the Middle East had already fallen to about 11pct in 2025, from 29pct a decade earlier, whereas the region still supplied roughly 94pct of Japanese crude, led by the UAE and Saudi Arabia and almost all of it through Hormuz. The LNG consequence is the indirect, oil-indexed cost already described; the crude consequence is direct and physical, and on that side Tokyo leant on a strategic-reserve release through April and May, a buffer LNG cannot replicate at comparable scale
Australia eases but still anchors
Australia remained the largest source but shed 6.5pp of share and 31pct of volume, the period's largest tonnage move. The decline is largely mechanical: a baseload supplier on contracted, equity-linked terms absorbs the bulk of any cut in total intake. Western Australian projects dominated as usual, led by Gorgon (0.94 MMt), Ichthys (0.80 MMt) and Wheatstone (0.63 MMt).
United States the largest gainer
US supply rose to 0.94 MMt from 0.18 MMt in Feb-Mar and 0.69 MMt a year earlier, a 9.6pp share gain and the period's largest increase, spread across Cameron, Freeport, Sabine Pass and Cove Point. Brunei (+3.5pp) and Malaysia (+2.0pp) also gained, while Congo (Rep.) and Nigeria entered as small new origins as Peru, Mozambique, China and Trinidad fell away.
LNG Canada as a standing thread
Canadian volume was flat at 0.28 MMt over five cargoes, but the cumulative picture is the point: our tracking records 22 cargoes totalling 1.54 MMt delivered to Japanese terminals since the first arrival in late July 2025, all from LNG Canada, in which Mitsubishi Corporation holds an equity stake. As the project ramps toward full capacity, this chokepoint-free Pacific supply is positioned to offset future erosion in other Pacific Basin sources.
Facility Highlights
Twenty-eight terminals recorded arrivals. Thirty terminals recorded arrivals. Futtsu remained the single largest node at 1.33 MMt across 21 cargoes drawn from eight source countries, down 17pct on the prior period, with the five busiest terminals together handling about half of national intake. The contraction was broad: Chita fell 28pct, Joetsu LNG 38pct and Himeji 20pct, partly offset by Senboku, up 30pct. Russian Sakhalin-2 volume, at 0.82 MMt over 17 cargoes, was distributed across ten terminals, underlining how embedded that source remains in the distribution network despite its modest headline share.
Outlook
The structural direction is set at home: continued nuclear restarts and the Takaichi government's energy-security tilt point to a lower import requirement whatever happens in the Gulf, with Hormuz keeping Qatari and broader Gulf tonnage out while it persists rather than altering that path. The forward risk is one of timing. The cost deferred through the spring, the oil-indexed pass-through still to land, the flexible volume put off rather than cancelled, and a buffer already below the seasonal norm all converge on the summer cooling peak, when demand rises and Gulf supply is still absent. The nearest-term swing factor is Russian: the OFAC licence covering Sakhalin-2 lapses on 18 June 2026, with Tokyo reported to be finalising a further extension it regards as indispensable to supply security. If that volume holds, the Pacific and US Gulf sources that gained this period can carry any incremental need; if it does not, the call falls on those same chokepoint-free suppliers at the moment the buffer is thinnest.
