ISTANBUL
As the US-Israel war with Iran disrupts Qatar’s liquefied natural gas production and creates turmoil in global energy markets, analysts say American and other Western companies are likely to be the major beneficiaries.
With Qatar accounting for roughly 20% of global LNG exports, any prolonged halt in production or shipping through the Strait of Hormuz could force importers in Asia and Europe to turn to alternative suppliers, particularly in the US, Europe and Australia.
The shutdown has already sent shockwaves through gas markets. European benchmark prices surged after QatarEnergy suspended production at two facilities, reflecting fears that one of the world’s most important LNG suppliers could be temporarily knocked offline.
Experts say American companies including ExxonMobil, Chevron, Cheniere and Venture Global could benefit, along with major European firms like Shell and TotalEnergies.
“We probably have the largest number of available cargoes in the market,” said Michael Sabel, CEO of Venture Global LNG, during an earnings call.
Shares of Cheniere Energy, the largest LNG exporter in the US, rose about 5.5% following the news of the disruption, signaling investor expectations that American exporters could benefit from tighter global supply.
Industry analysts say American LNG producers are among the best positioned to step in if Qatari shipments remain constrained.
“There could be scope for some additional supply from existing plants given nameplate capacity has some flexibility,” said Ed Cox, LNG markets editor at Independent Commodity Intelligence Services.
Cox added that demand for US LNG is likely to increase as buyers compete for limited cargoes.
“US LNG will be in strong demand between European and Asian buyers,” he said.
Other exporters could also gain from the supply shock. Companies such as Sempra Infrastructure, which operates the Cameron LNG terminal in Louisiana, and Freeport LNG in Texas have become major suppliers to global markets in recent years.
In the Asia-Pacific region, producers including Australian firm Woodside Energy and Chevron could help fill supply gaps for Asian buyers, while global energy majors with trading portfolios may redirect cargoes to the highest-paying markets.
Global LNG supply shock
The shutdown has raised broader concerns about the security of global LNG supply chains, particularly because most Qatari cargoes must pass through the Strait of Hormuz – one of the world’s most critical energy corridors.
“Qatar and the UAE supply 20% of the world’s LNG. The market cannot balance without this volume, which is why gas prices have jumped in recent days,” Cox said.
Gas markets have already reacted sharply. European benchmark prices have surged from about €32 ($37.3) per megawatt-hour to more than €50, while Asian LNG spot prices have climbed even more steeply.
If the outage continues, prices could rise even further.
“We expect European gas prices could rise to €80 per megawatt-hour if production is down for 12 weeks,” Cox said.
The disruption is already being felt in several emerging Asian economies that depend heavily on imported LNG.
“We have already seen downstream gas curtailments in India, Pakistan and Bangladesh,” Cox said, adding that Egypt has issued tenders for LNG cargoes to replace lost regional supply.
Europe is also vulnerable because LNG now accounts for roughly 40% of the region’s gas supply following the sharp decline in Russian pipeline imports after the Ukraine war.
“If Qatari exports are disrupted for an extended period, the market would tighten dramatically and LNG buyers would be forced to compete for limited spot cargoes,” said Jason Feer, global head of business intelligence at Poten & Partners.
‘US exports benefit from high prices’
Despite the opportunity for other exporters, analysts caution that replacing Qatar’s LNG supply entirely in the short term will be difficult.
Most global LNG production facilities are already running close to capacity, and a large share of cargoes are tied to long-term contracts.
“There is limited scope to increase LNG supplies in the near term,” said Saul Kavonic, energy analyst at MST Marquee.
Kavonic warned that the disruption could have a deeper impact on energy markets than previous supply shocks.
“A prolonged disruption of Qatar LNG will present a bigger impact than the Ukraine war, directly affecting Asia, and be compounded by oil – a gas substitute – being disrupted at the same time,” he said.
The supply crunch could intensify competition between Europe and Asia for available cargoes.
“With Asian contracts in force majeure and European stocks at very low levels, competition between Asia and Europe to keep the lights on could send gas prices to double again,” Kavonic said.
At the same time, the crisis may reinforce efforts by importing countries to diversify LNG supplies away from the Middle East.
“The Iran war starkly highlights to LNG buyers the value of having supply diversified away from the Middle East,” Kavonic said.
Even so, the tightening market could prove highly profitable for producers with available cargoes.
“An LNG shortage portends an energy crisis for Europe and Asia. But an LNG shortage is good for the US, as US exports benefit from high prices,” Kavonic said.
