Twenty percent of global LNG supply moves through that strait. It is now closed, and it is uncertain when it will reopen. Meanwhile, oil and gas fields in the region are under attack. This supply disruption arrives at a difficult moment: Europe is in the middle of its spring storage refill season and falling behind schedule. 

This will not directly affect U.S. LNG export volumes in the near term, as export terminals are already running at capacity. But it matters for U.S. buyers. New England states compete directly with European utilities for LNG cargoes every winter. When European demand spikes, New England prices follow.

A few other effects worth watching:

• Coal exports are picking up to backfill overseas gas demand, quietly adding a 2% to 4% premium into PJM and MISO electricity prices
• U.S. LNG export capacity was already on a growth track. This disruption accelerates the investment case for new terminals coming online in 2029 and beyond
• Higher crude prices will stimulate Permian Basin activity, adding associated gas production as a partial offset

At EnerNova, our goal is to put clear facts and data in front of our clients so they can make properly informed decisions, unlike others who try to sell fear. We are energy risk management experts. We help buyers understand what is happening in the market, what it means for their specific contract structure, and how to stay disciplined with strategies that reduce exposure to short term volatility. Contact us today to discover the EnerNova Difference.

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