Iran Conflict Exposes Flaws in US Energy Dominance

The ongoing conflict in Iran has put US energy dominance to the test and highlighted the importance of natural gas over oil. Despite being a net exporter of oil, the US is likely to see gasoline prices cross the $4-per-gallon threshold due to global supply chain disruptions.

Natural gas, on the other hand, remains relatively insulated from global price fluctuations due to its regional market structure and limited transport links. The war in Iran has damaged Qatari LNG infrastructure, which is expected to delay or cancel new capacity additions in the Middle East.

This development could create an opportunity for US LNG exports to fill the supply gap, but it also poses a risk of higher domestic prices as demand from power plants and liquefied natural gas (LNG) terminals increases. Goldman Sachs analysts have raised their forecasts for US natural gas prices in 2028 and 2029 by 30-40%.