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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 25, 2026 at 5:46

I would say the short term impact is positive and the long term impact is negative.  Much depends on the perception of LNG importing countries' opinion of the potential for future disruptions.  Is LNG supply from the Persian Gulf too risky to depend on long term?

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 29, 2026 at 5:39

Why the Iran War May Force Countries to Rely Less on Natural Gas

By Rebecca F. Elliott and Brad Plumer  nytimes.com  March 29, 2026

The U.S. and other exporters are poised for a windfall, but disruptions to Persian Gulf supplies are also pushing gas-buying countries to consider alternatives like coal, solar and nuclear energy.

From Western Europe to East Asia, countries are scouring the globe for natural gas after the war in Iran cut off the Persian Gulf fuel that they relied on to cook dinner, heat homes and generate electricity.

The United States, as the world’s biggest gas exporter, will almost certainly benefit from this upheaval, at least in the short term.

But the war with Iran, now entering its second month, is also a reminder that importing gas is a risky proposition that can leave buyers exposed to high prices and shortages during geopolitical strife. That presents a big challenge to the oil and gas industry’s plans to sell more natural gas — and creates an opening for alternatives like renewable energy, coal and nuclear power.

“What you’re seeing with this type of volatility that seems to happen every four or five years, it’s just not good,” Jack Fusco, chief executive of a large U.S. gas exporter Cheniere Energy, said last week at a Houston energy conference, CERAWeek by S&P Global.

This is the second time in recent years that a war has caused natural gas prices to soar in many parts of the world. The last spike followed Russia’s invasion of Ukraine in 2022.

Gas is still a lot less expensive than it was four years ago. But the Iran war is not over.

Analysts say that prices could rise significantly if Qatar, one of the world’s largest gas exporters, is unable to restart gas shipments relatively soon. On the third day of the war, the country stopped preparing gas for export. Its facilities later sustained extensive damage that a state-owned energy company said would take several years to repair.

Buying and selling natural gas is not something countries do lightly. Shipping the fuel overseas requires significant, long-term investment. After natural gas is taken out of the ground, exporters have to chill it to negative 260 degrees Fahrenheit (negative 162 degrees Celsius) to turn it into liquid that can be transported on massive oceangoing tankers. Countries buying that liquefied natural gas, or L.N.G., need to build import terminals to turn the fuel back into gas and pipelines to get it to utilities, factories and homes.

Having invested in a lot of that expensive kit, some countries now find themselves without a reliable supply of gas.

The loss of Qatar’s supply is so significant because the country ordinarily sells about 20 percent of the world’s L.N.G. Other exporters don’t have enough extra capacity to quickly make up for all of that.

Already, officials in Japan, Bangladesh and Thailand, which typically buy gas from Qatar, have taken steps to burn more coal to produce electricity. South Korea, meantime, is urging residents to conserve energy, including by taking shorter showers.

At the same time, buyers are competing for cargoes of L.N.G. produced outside of the Persian Gulf. That had many American companies riding high last week at the conference in Houston. Many executives expect that they will be able to build more export terminals and charge higher prices. New gas projects in places like Canada or Argentina could also advance as importers look to diversify.

“U.S. producers are positioned to be enormous winners,” said Meg Gentle, who previously led a Houston-based L.N.G. developer.

But there can be too much of a good thing. The longer the war disrupts the global energy trade, the more likely it is that importing countries will try to insulate themselves from future shocks by developing energy domestically or taking steps to conserve. Europe now uses an estimated 16 percent less natural gas than it did in 2021, the year before Russia invaded Ukraine, according to the International Energy Agency.

“The credibility of L.N.G. and gas imports really has taken a hit,” said Ira Joseph, a senior research associate at Columbia University’s Center on Global Energy Policy. “Because of Russia first and now Qatar.”

Higher gas prices also make alternatives more attractive. Take Asia, which the I.E.A. was expecting to help drive a 9 percent expansion in global gas demand by 2030, fed partly by a nearly 50 percent expansion in global L.N.G. supply. Growth could slow if countries switch to other energy sources because they cannot secure enough L.N.G. or can no longer afford it.

Last week, Goldman Sachs raised its forecast L.N.G. prices in Asia by 15 percent for the second half of the year. By 2028, the investment bank said, L.N.G. is likely to be around 57 percent more expensive in Asia than it had expected before the war. Goldman made similar changes to its natural gas price forecasts for Europe.

“Everyone will ask questions,” said Brendan Duval, chief executive of Glenfarne, which is developing natural-gas export terminals in the United States. “Like if you’re in India,” he said, “they’re very price sensitive, so are they going to go, ‘All right, let’s not get too exposed to L.N.G. because this could happen every three years?’”

“But,” Mr. Duval added, “everyone’s got short memories.”

Energy executives who are not in the business of selling L.N.G. said importers would have a strong reason to consider other options.

“If you’re a country that doesn’t have fossil fuels, you’re relying on imports, you’re going to look to protect yourself,” said John Ketchum, chief executive of NextEra Energy, which owns and operates renewable energy projects as well as nuclear and gas-fired power plants in the United States. “One of the ways you can protect yourself is with renewables and storage — or nuclear.”

Some world leaders may look to China as an example. Over the last 20 years, that country has pushed hard to reduce its reliance on imported oil and gas, motivated mainly by worries about energy security rather than concerns about climate change.

It has built hundreds of power plants that burn domestically produced coal, installed more wind and solar power than the rest of the world combined and is building dozens of nuclear power plants. The country also fostered a cutting-edge electric vehicle industry. And while China still buys a lot of L.N.G., it can use less gas during crises, said Mr. Joseph of Columbia.

Nations have other options. They could develop their own domestic gas supplies or invest in more gas storage capacity to weather large disruptions, according to analysts at Wood Mackenzie, a consulting firm. But both would take time to have a meaningful impact.

So far, American consumers and businesses have been spared higher natural gas prices. That’s because the United States is such a big producer and gas is hard enough to transport that prices tend to be set regionally rather than worldwide.

But if there is a lot more demand for U.S. gas in the coming years — and less supply from Qatar — prices most likely will rise in the United States, too. Goldman Sachs recently raised its forecast for U.S. natural gas prices in 2028 by more than 30 percent.

Rebecca F. Elliott covers energy for The Times.

Brad Plumer is a Times reporter who covers technology and policy efforts to address global warming.

 

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Permalink Reply by Hale Yayuh on March 29, 2026 at 12:12

Why hasn't natural gas spiked in the U.S. like it did with the Ukraine war? Oil certainly has. What's the thinking on these continued weak prices? 

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 29, 2026 at 12:28

We'll see if natural gas prices start to creep upward with the settlement price for April.  I'll post that tomorrow or Tuesday.  The March settlement price was posted before the war started.  End users will bear the brunt of rising prices.  Much will be determined by how long the Strait of Houmuz is closed but Qataria LNG will take months if not years to be fully restored.  A lot of LNG is shipped on long term contracts and traders like Trafigura will be the primary beneficiary.  If US natural gas prices are to rise, operators will have to maintain discipline and not over produce.  Let the demand side of the equation out run the supply side.  I think we will know much more this next week.

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Permalink Reply by Jesse Joyner on March 30, 2026 at 8:38

It's somewhat surprising that NG monthly future pricing, forecast through July/August, haven't rocketed upward -- closer to $4 due to the massive infrastructure damage caused by the Iranian War. Of course, it's possible that the NG pricing disconnect can be blamed on flawed market algorithms in the future's software programming, which isn't properly factoring in/calculating the heavy cost the war risk has generated on NG demand, along with the downside pricing pain for such massive O&G infrastructure destructions due to the carpet-like bombing done by both sides.

Of course, it's also possible that the algorithms are, in fact, finely tuned to define a snapshot of NG trading due to the stuttering psychology of speculator comprehension of what the war truly means to petro trading for the rest of 2026. In other words, the shock and awe . . . of the rapid blitzkrieg bombing . . . might not be accurately defined as to its clear "end point." Ergo, it's quite possible that the rocket-exchange tic-for-tac will go on much longer than expected due to unforeseen oppositional bombing and also via sacrificial give-ups to save lives. Yes, it's an extremely fluid situation with no end in sight. A bloody mess.

If I was forecasting NG prices for the rest of 2026, I'd pencil in an upside "war" premium, with a base of $3.50 and a range up to $4.50 into the fall . . . with a $5 target for Dec. future settlement. That said, this prognostication is conservative and depends or future warfare destruction to LNG shipping worldwide, Middle East pipelines/refineries/pumping stations, and the associated downside to usage demand. 

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