Drewry forecasts that LNG freight rates will fluctuate upwards in 2026, primarily attributed to accelerating demand recovery coupled with a surge in supply. However, a significant market rebound remains difficult to achieve, as fleet expansion continues to far outpace liquefaction capacity construction. This is reflected in the 2026 vessel delivery schedule: over 65% of new vessel deliveries are concentrated in the first half of the year, while 60% of new LNG supply is expected to be released in the second half. Although 2026 signals a starting point for recovery, escalating geopolitical tensions add uncertainty and may disrupt this year’s expectations.
Freight rates are expected to recover, but geopolitics and Asian market demand remain key variables
LNG freight rates are expected to recover from the multi-year lows of 2025 (2025 TFDE vessel average daily rate $25,000, down 37% year-on-year; MEGI vessel average daily rate $40,500, down 25% year-on-year). However, the probability of a strong rebound is slim, as over 100 new vessels are scheduled for delivery in 2026 (76 delivered in 2025), indicating a persistent supply surplus.
LNG demand boosted, but supply expansion outpaces demand
Approximately 43 million tonnes per annum (mtpa) of new liquefaction capacity is expected in 2026, including major projects such as Qatar’s North Field Expansion (16.5 mtpa), Golden Pass T1 (6 mtpa), Corpus Christi Stage 3 and Block 2-7 (8.6 mtpa). However, 60% of the new supply is expected to come online in the second half of 2026. With the commissioning of 2025’s new capacity (40 mtpa), the global LNG supply landscape will optimize, and export intensity will subsequently increase.
European demand prospects are positive, with imports expected to remain strong this year, as the region’s storage levels may fall below 30% at the end of the 2025-2026 winter, supporting market fundamentals. Furthermore, Europe’s push for structural energy transformation (relying on new supply agreements and regasification facility expansion) will be the main driver of import growth in 2026.
Asian market demand is expected to improve, benefiting from new supply availability, growing natural gas demand, and falling LNG prices. Meanwhile, China’s imports may recover, not due to reductions in pipeline gas or domestic supply, but because key supply sources have reached capacity limits, which suppressed its LNG demand in 2025. Given that domestic production has met the 2025-2026 plan targets and pipeline gas deliveries via PoS 1 are operating at full capacity, China’s incremental demand is expected to be met through spot purchases (spot procurement was weak in 2025), while new contracted supply will commence in 2026.
Fleet expansion continues, with new orders and scrapping both set to increase
Approximately 100 vessels are expected to be delivered in 2026 (including 85 LNG carriers). In 2025, 81 vessels were delivered (including 76 LNG carriers), with the delivery rate down 25%, attributed to low earnings and project delays causing some postponements.
The current orderbook stands at 334 vessels (including 282 LNG carriers, 41 LNG barges, 4 FSRUs, and 7 FLNGs), with an orderbook-to-fleet ratio of 40%. Given that a recovery in new orders will balance with intensive vessel deliveries, the orderbook size is expected to remain stable in 2026.
Newbuilding orders are expected to rebound in 2026, when a batch of project-related vessels will commence construction. The main annual trend will revolve around containership orders, as owners, under pressure from both regulatory and trade uncertainties, focus on high fuel efficiency and emission standards to enhance vessel “future-proofing.”
2025 saw a record 15 LNG carriers scrapped, with the youngest vessel being 20 years old. The idle fleet may expand further, as 20 to 25 steam turbine LNG carriers have contracts expiring in 2026, coupled with intensive new vessel deliveries, putting pressure on older vessels. Drewry expects LNG carrier scrapping to reach 18-20 vessels in 2026, potentially setting another record. However, the scrapping rate will still be insufficient to effectively balance the market’s oversupply.
Caution against over-optimism; a turning point may come in the second half of 2026
Compared to the first half, LNG freight rates are expected to recover in the second half of 2026, with over 70 LNG carriers set to join the fleet to match new supply demand (over 60% to 65% of new liquefaction capacity will start up in the second half).
By mid-2026, Asian demand is expected to grow strongly, as the 2026 summer may be exceptionally hot. With falling prices and improved supply, Asian buyers previously deterred by high prices will increase purchases. Additionally, Europe’s inventory is expected to be below 30% at the end of the 2025-2026 winter, creating urgent restocking needs; this trend may accelerate in the second half of 2026 as countries prepare for the next winter with inventory levels around 50% (below the five-year average). Europe will strive to get through another winter without Russian gas, this time also potentially dealing with tensions with its top LNG supplier, the United States. In summary, the market in the first half of 2026 will be driven by summer heat, while the second half will be supported by winter restocking demand.
Geopolitical risks persist, profoundly impacting LNG shipping patterns
In 2026, geopolitics will remain a key variable influencing LNG shipping dynamics, with global tensions unlikely to ease in the short term. At the beginning of the year, the US escalated actions against Venezuela and showed intentions regarding Greenland. While the direct impact on LNG trade is limited, the ripple effects could disrupt the expected pace of LNG development.
Meanwhile, trade friction is escalating, and any military confrontation or economic conflict could trigger tariff sanctions and policy reversals by the U.S. Trade Representative (USTR).
Although the Red Sea situation has eased, with no Houthi attacks on ships in the past hundred days, LNG carrier transit through the Suez Canal remains restricted. Given the lingering geopolitical uncertainty, many owners are adopting a wait-and-see approach, and a return to the canal is expected to be gradual. Furthermore, the ongoing oversupply of tonnage in 2026 may encourage longer voyages via the Cape of Good Hope. On another front, the Russia-Ukraine situation remains difficult to resolve, and Europe is considering a complete ban on Russian LNG by 2027.
Conclusion
Although a freight rate recovery is anticipated, 2026 is merely a starting point, with demand and geopolitical uncertainties set to dominate LNG shipping trends. As new supply meets growing demand, this year will be a turning point for the market. Benefiting from the commissioning of major US and Qatari projects, the global LNG market will receive a boost. Against this backdrop, 43 mtpa of new liquefaction capacity is expected in 2026, following 40 mtpa added in 2025. However, geopolitical shifts and climate challenges will continue to cause short-term market volatility.
Given recovery expectations, growth momentum is mainly concentrated in the second half of 2026, when demand improvement and supply release will become more synchronized. However, considering that fleet growth continues to outpace supply and demand growth, Drewry remains cautious about a significant freight rate rebound in 2026.
