US Natural Gas Dominance Faces Unintended Consequences in War-Torn Middle East

The ongoing conflict in Iran has put to test the US's energy dominance, particularly its natural gas production. Despite being a net exporter of oil, the country is facing rising domestic gasoline prices due to global market disruptions. However, the real story lies in natural gas, where the US remains relatively insulated from the effects of the war.

The reason for this is that natural gas markets are largely regional and not as easily linked as oil markets. The rise of liquefied natural gas (LNG) on ships has strengthened these linkages, but it still only accounts for about 14% of global consumption. The US LNG terminals were already running at full capacity before the war, leaving no spare capacity to react to the price spike in Europe and Asia.

The war has damaged Qatar's flagship Ras Laffan LNG export complex, affecting roughly a fifth of the world's LNG flows. This has thrown projections for a glut in the closing years of this decade into doubt. Even if the conflict ends soon, the damage done to Qatari infrastructure and the notion that Middle Eastern LNG supplies are safe will linger.