US Natural Gas Offers Low-Cost Geopolitical Option
American natural gas has been fluctuating since the beginning of the conflict in the Middle East, while natural gas prices around the world have sharply risen. The European TTF has increased by over 60% since February 28, while the Henry Hub remains close to $3, reflecting a significant disparity between the US domestic market and the global LNG market.
Since the escalation began, the market has had to integrate several major disruptions in LNG: strikes on South Pars in Iran, damage to Ras Laffan in Qatar, and ongoing tensions around the Strait of Hormuz. Qatar accounts for about 20% of global LNG exports, and nearly a fifth of global flows pass through Hormuz. JERA estimates that a prolonged absence of around 90 million tonnes of Middle Eastern LNG would have significant effects on spot prices and supply arbitrage, especially in Asia.
This relative inertia of American gas, surprising at first glance, is explained by very strong domestic fundamentals. Production is historically high, stocks are within their historical range, and the US is already exporting nearly all the LNG it can liquefy in the short term. The American market is therefore, at this stage, more driven by internal factors (demand, production, storage) than by external shocks.
Nevertheless, if disruptions in the global LNG market persist, the balance could shift. Europe, Japan, and Korea are entering their restocking phase, with stock levels lower than last year in Europe. Some flows are already being redirected, and competition for available shipments could intensify. In this context, American gas would become a marginal source of supply, increasing its relative value in the overall system.
The future will mainly depend on the evolution of the conflict. Even in case of a rapid easing, the full restart of the most affected infrastructures will require several weeks, or even months for the most damaged facilities according to experts, prolonging uncertainty about global supply.
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