The closure of the Strait of Hormuz stranded tankers from Qatar and the United Arab Emirates, which together provide 20 percent of global LNG. Asia has been particularly badly affected because it imports 80 percent to 90 percent of its supplies from the Persian Gulf. Reopening the strait will not restore all lost supplies. In mid-March, Iranian missiles destroyed 17 percent of the capacity of Qatar’s Ras Laffan refinery, and QatarEnergy’s CEO said repairs could take five years.
The United States has made aggressive efforts to gain a larger share of the global LNG market, with Trump seeking to secure major purchase agreements from trade partners such as Japan, the European Union and South Korea. But eight existing US LNG export terminals are already operating at full capacity. Although Trump has vowed to bring more capacity online, complex facilities costing billions of dollars take years to build and permit.
As a result, U.S. exports of LNG, amounting to about 15 billion cubic feet of gas per day, currently account for only 11 percent to 13 percent of total U.S. natural gas production. The situation is that the United States has an abundance of the top fuel for electricity, while other countries are struggling to increase their supplies.
But U.S. consumers are facing rapidly rising electricity prices for a variety of reasons unrelated to the war — mostly due to capital construction by utility companies, partly to accommodate the data center explosion, but also to build resilience against wildfires, hurricanes and other climate change impacts and to replace aging infrastructure.
In their bimonthly video series, energy analysts at the Center for Strategic and International Studies consider how the best example of American energy independence is almost entirely ignored by American consumers because of these other factors.
“So while we are on the brink of a global energy crisis, or perhaps already in crisis, the United States is feeling this in the oil markets, but we are, for the time being, insulated from gas price shocks because of the nature of the gas system and the plentiful supply in the United States?” asked Joseph Majkut, director of CSIS’s Energy Security and Climate Change Program.
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