{"id":9925,"date":"2026-03-10T15:28:23","date_gmt":"2026-03-10T19:28:23","guid":{"rendered":"https:\/\/www.fundamentalanalytics.com\/?p=9925"},"modified":"2026-03-25T15:33:57","modified_gmt":"2026-03-25T19:33:57","slug":"iran-squeezes-global-lng","status":"publish","type":"post","link":"https:\/\/www.fundamentalanalytics.com\/es\/iran-squeezes-global-lng\/","title":{"rendered":"Iran Squeezes Global LNG"},"content":{"rendered":"

Dr. Ken Rietz<\/span><\/p>\n

Roughly 20% of each of the world\u2019s natural gas and crude oil goes through the Strait of Hormuz. So, when Iran decided to shut it down, the reaction was immediate and extreme. In this commentary, we will pull together the more significant responses relating mainly to liquid natural gas (LNG) and give some very tentative possible directions things may move. First, we look at the movement of natural gas prices and then look at a map of the Strait of Hormuz.<\/span><\/p>\n

<\/p>\n

Figure 1: Front-month ICE UK natural gas futures, EOD<\/em><\/p>\n

<\/p>\n

Figure 2: Strait of Hormuz<\/em><\/p>\n

We will approach this in three timeframes: current (covering from March 1 to March 9), short term (covering the next several months), and long term (covering beyond several months). Of course, depending on the length of the war against Iran, these time frames will expand or contract.<\/span><\/p>\n

\n

Current<\/h3>\n

\n

Iran typically threatens to close the Strait of Hormuz whenever they are confronted with a geopolitical situation that they didn\u2019t like. But they never tried to carry out the threat until now. Thus, the experts were surprised, with no real plan in place. As they were faced with serious events to deal with, they made rapid, and often skewed, estimates that now seem odd. Greg Molnar, a keen commentator,\u00a0raised some questions<\/a>\u00a0about the steep increases in shipping rates, giving several possible answers, and cautioned that prices could yet go higher. Another commentator, Geoffroy Hureau,\u00a0suggests that the natural gas market has become soft<\/a>,<\/a>\u00a0and the disruption in supply, therefore, is not having the drastic effect it often did before. Both posts are well worth reading and considering. My estimate is that it could take more than a week or two to stabilize.<\/p>\n

On March 2, Qatar shut down the world\u2019s largest LNG plant (we will return to this later) because drones had struck it, and the strait had been effectively closed. Normally, an average of more than 150 ships passes through the strait each day. From March 1 to March 8,\u00a0the daily average is 13<\/a>,\u00a0or 8.5% of the usual traffic. According to CSIS, even most Chinese vessels are not being allowed to exit the strait. China, an Iranian ally, is appealing to Iran to allow them to leave.<\/p>\n

\n

Short Term<\/strong><\/h3>\n

\n

Three countries have dominated the LNG market: the US, Qatar, and Australia. By blocking the Strait of Hormuz, Qatar has been removed, for the time being, from exporting any LNG. The only countries that have a chance of making up the loss of global LNG supply are the US and Australia. But can they? Specifically, will they be able to profit from the situation?\u00a0The answer is No<\/a>, for a simple reason: Both the US and Australia are operating at near-full capacity. Yes, they are setting up contracts for the future that have an elevated price, but it will take months to ramp up production to really take advantage of the shutdown of QatarEnergy\u2019s LNG plant.<\/p>\n

That doesn\u2019t quite cover everything. The US and a number of other countries have reserves that could be tapped to sell, but the politics of selling reserves to other countries could be complicated. For example, on March 5, South Korea said that they will run out of LNG in nine days. Genuine crises could be forming there and in other places.<\/p>\n

\n

Long Term<\/strong><\/h3>\n

 <\/p>\n

QatarEnergy\u2019s LNG plant was shut down, as stated earlier. The shutdown process can take about 12 hours. But restarting the plant is a much more complex operation. First of all, Qatar is not going to even begin to restart the plant until there is a long-term and solid commitment to making sure the Strait of Hormuz is fully accessible. That could take weeks if not months. But getting the LNG plant started could take a month by itself. The problem is that the plant has to generate cryogenic temperatures (about\u00a0\u2212260\u25e6<\/sup>\u00a0F or\u00a0\u2212160\u25e6<\/sup>\u00a0C), and making sure all the pieces are thermally compatible. It is safe to say that QatarEnergy will not be producing LNG for a few\u00a0months.<\/p>\n

But there is a new problem that arises from this shutdown of major sources of LNG (and crude oil), namely reputations. Natural gas had a rather shining reputation as a safe and reliable energy source. Then the Russian invasion of Ukraine happened, and suddenly, Russian natural gas was no longer reliable. About this time, LNG appeared, and natural gas was beginning to look up again. But now that the Iranians have clobbered the LNG market, LNG and natural gas have been smeared again. The green energy folks are pushing for renewable energy as the ultimate safe alternative, but the complications there would require a whole new commentary.<\/p>\n

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Trading Implications<\/strong><\/h3>\n

 <\/p>\n

It is clear that the price of LNG (and therefore natural gas) will not go down to stay until after the Iran war is over, and in fact, is projected to go up as the reserves of natural gas are depleted and bidding for scarce LNG becomes more frantic as time goes on. So, going long natural gas futures could be a viable trade. But there are two cautions here: First, the price of natural gas will be very volatile, and therefore, the futures will be expensive. But also, be careful to sell those futures when it looks as though the war will be resolved because the price will drop rapidly. At that point, it might be good to short natural gas futures, since the price will drop, but not all the way down to price levels prior to the war.<\/p>","protected":false},"excerpt":{"rendered":"

Dr. Ken Rietz Roughly 20% of each of the world\u2019s natural gas and crude oil goes through the Strait of Hormuz. So, when Iran decided to shut it down, the reaction was immediate and extreme. In this commentary, we will pull together the more significant responses relating mainly to liquid natural gas (LNG) and give […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-9925","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/posts\/9925","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/comments?post=9925"}],"version-history":[{"count":2,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/posts\/9925\/revisions"}],"predecessor-version":[{"id":9927,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/posts\/9925\/revisions\/9927"}],"wp:attachment":[{"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/media?parent=9925"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/categories?post=9925"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/tags?post=9925"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}