A potential disruption to energy infrastructure in Iran and Qatar due to potential attacks in the ongoing Israel-Iran conflict could still upend natural gas and LNG balances in the region.
Iran is a major pipeline gas supplier to Turkey, while Qatar, which shares the giant South Pars/North Field offshore gas field with Iran, is a major supplier of LNG to Asia.
While there are concerns that the conflict could lead to a possible closure by Iran of the Strait of Hormuz, which could box in 20% of the world’s LNG supply, the event remains extremely unlikely due to the geopolitical implications to Tehran.
LNG market participants are instead weighing a more likely scenario where interruptions of upstream gas supplies could spark demand for spot LNG in the Mediterranean.
"I think the more plausible disruptions are localized, e.g. Iranian gas infrastructure being hit and exports to Turkey being shut off," a European LNG trader says.
