There's another energy market that may get hit harder than oil by Strait of Hormuz closure

Core Insights - Oil prices surged due to near standstill traffic in the Strait of Hormuz, but the long-term implications for the liquefied natural gas (LNG) market may be more severe [1] - Approximately 20% of global LNG passes through the Strait, primarily exported from Qatar, with global gas prices rising sharply after Qatar halted output following an Iranian drone attack [2] - European natural gas prices increased by 63% last week, marking the largest percentage gain since March 2022, while Asian prices reached $23.40/mmbtu, leading to a shift of LNG vessels from Europe to Asia [3] Industry Implications - Unlike crude oil, gas transportation relies on ships for long distances, and the lack of alternative infrastructure makes the LNG market more vulnerable, particularly as gas production is concentrated in Qatar [4] - Restarting Qatar's LNG production at Ras Laffan will be challenging once traffic resumes in the Strait, as the cooling process for gas is complex and will take longer than oil production [5] - Rapidan Energy predicts that LNG exports from the region will not resume until there is complete certainty regarding the safety of transit through the Strait, with operations taking weeks to fully restart [6] - The current conflict may not fully reveal the duration Qatar will remain offline and its impact on global supply and markets [7]