Middle East conflict: Impact on European gas, global LNG

The European gas and global LNG markets are undergoing a major stress test right now. The closure of the key strait of Hormuz chokepoint, until weeks ago considered a worst-case scenario, has cut off a fifth of the world's LNG supply.

How can we gauge the implications of this major event on global LNG supply? Natasha Fielding, editorial manager at Argus for gas, LNG and biomass, explores some key price trends, including:

• How much further might European gas and Asian LNG prices spike in order to spur demand destruction? 
• For now, Asian buyers are paying a premium to secure LNG cargoes in the Atlantic basin ahead of European firms. Will that last? 
• European summer gas prices have moved to an unusual premium to winter gas, so it no longer makes economic sense to add gas to storage in the summer. How will that affect Europe's task of rebuilding its depleted gas stores this summer?