Europe’s natural gas market has passed the Hormuz stress test — at least so far. A U.S.-Iran peace deal suggests the worst of the shock may be over, even if flows recover only gradually. That should temper supply fears and shift attention to the demand pressures likely to shape the market in coming decades.
Tag: LNG
Never bet against Donald Trump? The oil market appears to have made a risky wager from day one of the Iran war: The U.S. president would not allow the conflict to spiral into a full-blown economic crisis. So traders wouldn’t price one in, no matter what was happening with physical supplies.
The U.S.-Iran deal ending months of fighting and reopening the Strait of Hormuz will prompt a collective sigh of relief from energy exporters and importers alike. But the fragile calm may not prevent future flare-ups, casting doubt over how quickly – or fully – tanker traffic through the vital waterway can return to normal.
Saudi Arabia and neighbouring Gulf producers will cheer the eventual reopening of the Strait of Hormuz, but the ensuing flood of oil risks eroding OPEC’s already fragile grip on the market.
Yemen’s Iran-aligned Houthis said on Monday that they would ban ships linked to Israel from the Red Sea after Israel renewed its military attacks on Iran, adding to concerns about global shipping and energy flows.
The trickle of tankers exiting the Strait of Hormuz has gathered pace in recent weeks, as traders adopt stealth measures to make the crossing. While this is freeing some of the vast oil inventories trapped in the Gulf, it does not signal a slow return to normalcy. Instead, it previews the opaque, fragmented energy market the Iran war is set to leave in its wake.
Argentina, Brunei and Gabon are not three countries that would appear to have much in common. But they are in a small group of energy producers that are big winners from the war against Iran.
Two liquefied natural gas tankers are exiting the Strait of Hormuz on Monday, heading to Pakistan and China, while a supertanker with Iraqi crude for China left the Gulf on Saturday after being stranded for nearly three months, shipping data showed.