Post by Oxford Institute for Energy Studies

New Oxford Institute for Energy Studies Quarterly Gas Market Review – July. 👉 Link to Quarterly Gas Review: https://lnkd.in/e398eZCc Key points: 🔹 With the US-Iran conflict continuing to dominate energy markets into the summer months and tightening global LNG balances, early hopes that the June ceasefire would open the way for a durable diplomatic pathway for conflict resolution have been dashed. This in turn has put a recovery in Persian #Gulf LNG supply back in doubt. 🔹 Despite Qatar’s declared readiness to move swiftly on ramping up supply from its Ras Laffan hub, the bigger challenge remains the security of navigation through the Strait of Hormuz. The attack on Nakilat’s laden Al Rekayyat LNG carrier on 7 July, which has rendered it immobile offshore Oman after an engine room fire, highlights the very real dangers facing vessels and crews. 🔹 With the #US and Iran continuing to mount tit-for-tat attacks, there is now little room for a diplomatic pathway that could open up Qatari and Emirati LNG #supply before the autumn, at the earliest. 🔹 As discussed in this Quarterly Gas Market Review, tight global LNG supply, despite steady growth in North American output, has kept benchmark #GasPrices elevated and the forward curve backwardated, reducing storage injections in Europe as Asian buyers broadly outbid European utilities on spot and flexible cargoes over the quarter, responding to rising power demand as El Niño conditions increased temperatures and demand for cooling. 🔹 What has been somewhat counter-intuitive has been the resilience of some developing Asian LNG demand despite prices driven higher by the Iran conflict. Imports grew in India, Bangladesh, Thailand, Vietnam, and the Philippines while large OECD importers in North-East #Asia and China stayed on the sidelines. Gas-fired power for cooling has been the critical demand driver here. 🔹 In #Europe, perhaps unsurprisingly in a summer of new global temperature records, cooling demand has also been the common theme driving electricity demand. 🔹 But gas’ role in power is becoming more volatile, with weather also driving renewables availability, hydro and even temperature-related nuclear curtailments also making a clean read on #gas more difficult. 🔹 One striking takeaway from this report: there is now little prospect of the #EU meeting its softest storage targets this year since other European sectoral #demand has stayed mostly flat, making little room for higher injections. 🔹 Whichever pathway the Iran conflict takes, it now looks likely that European reliance on just-in-time #LNG will be higher this winter – and the storage refill requirement an even steeper mountain to climb in summer 2027. #MiddleEast #Prices #Qatar #UnitedStates