LNG: A Bridge Over Troubled Water?

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LNG disruptions from the Iran War have exposed gas as an unreliable bridge fuel, accelerating diversification toward energy security, redundancy, and alternative power sources.

The attacks on the Pars field in Iran and the counterattacks on Qatari liquefied natural gas (LNG) trains inflicted serious physical damage on critical infrastructure. The damage can be repaired, albeit over a period of years. Markets will adjust as new supply comes online and as measures are employed to conserve or substitute for constrained natural gas supply. But the broader security calculus has changed. For the second time in four years, natural gas–importing countries face the prospect of shortages, high costs, and fuel switching. 

What Happened and Why Does It Matter

Strikes on Iran’s South Pars field disrupted what was mostly domestic production. But retaliatory attacks on Qatar’s Ras Laffan complex not only halted LNG output from one of the world’s largest exporters, but they also took out 17 percent of Qatar’s LNG production capacity for anywhere between three and five years. That amounts to roughly 2.5 percent of global LNG capacity. While that share may appear small, in a tight LNG market with little spare capacity and no real buffer, even relatively modest losses can trigger outsized price and supply shocks, particularly if the conflict results in additional long-term capacity losses.

Almost immediately after, Qatar announced force majeure on contracts with customers tied to the........

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