International LNG Prices Rise Amid Strait of Hormuz Closure

Why It Matters

The disruption underscores the fragility of global LNG supply chains and creates a sharp price divergence that pressures European and Asian buyers while keeping U.S. domestic gas relatively cheap. It also highlights the limited ability of U.S. LNG exports to quickly compensate for geopolitical shocks.

Key Takeaways

• TTF futures hit $14.80/MMBtu, 35% rise since closure.
• JKM futures climb to $16.02/MMBtu, up 51% over same period.
• Henry Hub prices fall 9% as U.S. domestic demand wanes.
• Closure cuts ~10 Bcf/d LNG flow, ~20% of global trade.
• U.S. approved 0.6 Bcf/d extra export capacity, still limited.

Pulse Analysis

The abrupt shutdown of the Strait of Hormuz has sent shockwaves through the LNG market, removing a critical chokepoint that carries roughly one‑fifth of the world’s liquefied gas. With Qatar’s Ras Laffan facility effectively offline, European and Asian spot markets have been forced to scramble for alternative cargoes, driving TTF and JKM futures to multi‑year highs. The price surge reflects not only the immediate supply shortfall but also heightened risk premiums as buyers hedge against further geopolitical turbulence.

Meanwhile, the United States has experienced a contrasting price trajectory. Domestic Henry Hub futures have drifted lower, buoyed by ample storage and a seasonal dip in consumption. Despite record export volumes—17.9 Bcf/d in March—U.S. terminals are already operating near capacity, limiting the ability to redirect gas toward the strained overseas markets. Low European storage levels, at just 28% of capacity, and limited Asian storage amplify the urgency for spot cargoes, yet the U.S. can only marginally increase shipments through recent DOE authorizations for Plaquemines and Elba Island.

Looking ahead, the market will watch how quickly new U.S. export projects, such as Golden Pass and Corpus Christi Stage 3, come online by late 2026. While these additions could eventually soften the supply gap, short‑term volatility is likely to persist, especially if the Hormuz closure extends or similar chokepoints face disruption. Energy traders and utilities will need to balance higher import costs with the strategic advantage of diversified supply sources, underscoring the growing importance of flexible LNG contracts and robust storage strategies.