On May 20, 2026, equinor projected that conflict with iran and sustained disruption at the [[Strait of Hormuz]] will delay the global lng supply glut by two years, keeping markets tight through 2028. This impacts [[Latin America LNG Import]] strategies built on assumptions of cheap, abundant spot cargoes.

Key implications:

• Market Repricing: The expected 2026-2027 lng surplus is effectively erased. LatAm buyers, like petrobras, eneva, and [[Compass Gás e Energia]], face increased spot exposure costs, competing with European and Asian importers for constrained cargoes.
• SPA Architecture Shift: Existing lng Sales and Purchase Agreements (SPAs) are under pressure:
  • Force Majeure: Clauses must adapt to chronic geopolitical risks, like a permanent Iranian toll on Hormuz traffic.
  • Delivery Basis: Buyers will push for des (Delivered Ex-Ship) terms from Atlantic Basin sellers; fob (Free on Board) contracts from Middle Eastern origins will require explicit toll pass-through.
  • Pricing: Formulas indexed to jkm or ttf may shift to hybrid or Atlantic Basin-specific corridors tied to [[Henry Hub]] plus a geopolitical shipping differential.
• Atlantic Basin Premium: [[U.S. Gulf Coast LNG]] becomes the premier secure asset for LatAm procurement due to proximity and zero chokepoint exposure. Access is limited by ferc and doe regulatory queues (e.g., [[Venture Global's CP2 LNG]], [[NextDecade's Rio Grande LNG]]).
• Domestic Hedges: Brazil is accelerating domestic production efforts (e.g., bm-c-33 offshore project, "Gas para Empregar" program, [[Rota 3 pre-salt gas pipeline]]) as a hedge against import volatility.

Watchpoints: Brazilian domestic gas initiatives, US Gulf Coast export capacity timelines, and the 2026-2028 LatAm lng SPA renewal cycle.