Since the Iran War began at the end of February, the price of European LNG and a composite of three US LNG exporters (Cheniere, Venture Global and NextDecade) have tracked each other fairly reliably. At the outbreak of hostilities, LNG investors were slow to realize the opportunity, but after a month of conflict both were up 40-50%.

March 27 is the highest so far for the three stocks, which generally retreated during 2Q. The truce in early June depressed European LNG and the exporters, but it was predictably short-lived.

Last week a divergence opened up between the two. With maritime traffic through the Strait of Hormuz once more at a virtual standstill, the European LNG benchmark has rallied above its pre-truce early June level. By contrast, the LNG names have rallied modestly. It’s as if LNG investors think another truce is likely, whereas the European LNG benchmark is more pessimistic.

The European TTF LNG benchmark is trading above $18 per Million BTUs (MMBTUs, approximately 964 cubic feet), compared with $10 before the conflict began. The US Henry Hub is below $3. The arbitrage profit is substantial for those able to exploit it. Feedstock to US LNG export terminals is running at 18 Billion Cubic Feet per Day (BCF/D), worth $270million per day before costs.

All three stocks are substantially below their highs of late March. Cheniere has contracted 95% of its liquefaction capacity through 2035, so has the least to gain from the near-term high spread between US and global prices. Venture Global (VG), which retains around a third of its capacity uncommitted, has the most to gain.

In a recent SEC filing, VG disclosed that they charged $6.45 per MMBTUs during 2Q26 to liquefy gas for transport by ship, up from $3.82 is 1Q26.

NextDecade expects to begin shipping LNG early next year, so today’s prices offer them no direct benefit.

Shipments of LNG from Qatar have been non-existent other than during the brief truce last month. Even with an immediate cease-fire, it would still be late August before they could resume shipments. Their customers are having to endure a supply interruption of at least six months.

How Qatar’s reputation for reliability is affected by the force majeure they declared remains to be seen. Regime change in Iran that resulted in a more neighborly set of leaders seems implausible. However the Iran conflict ultimately resolves, it’s likely that a leadership of Moslem extremists will retain the ability to harass shipping through the Persian Gulf.

Regional governments are considering ways to avoid the Strait of Hormuz. Dubai’s DP World is planning a new port in Fujairah, allowing ships to be loaded without entering the Persian Gulf at all. Traffic at their Jebel Ali Port is estimated to be down 90-95%. However, Iranian missiles routinely cross the Persian Gulf and hit Qatar’s Ras Laffen LNG facility in early March. Fujairah will still be in range.

Chevron is working with Iraq to build an oil pipeline through Syria to the Mediterranean, allowing them to avoid the Persian Gulf completely. Saudi Arabia’s pipeline that crosses its country to the Red Sea has turned out to be a smart back-up plan for current events.

Qatar will likely need to build a gas pipeline to a safe place – perhaps to Fujairah with the blessing of the United Arab Emirates, or even to the Red Sea across Saudi Arabia. The initiatives already announced show that policymakers in the region are contemplating investing $billions to move their trade out of Iran’s reach. They clearly expect neighboring religious zealots to present a long-term threat.

It’s therefore odd that investors haven’t incorporated similar analysis when looking at US LNG stocks. Building energy infrastructure in the Middle East to neutralize Iran’s military threat will take years and suggests policymakers are concerned it will persist. This is not good for Qatar’s ability to engage with its customers, and US companies are the clearest beneficiary.

The risk of supply disruption is rippling across the entire energy sector. Refining margins are the highest in five years. Almost a tenth of global refining capacity is offline, caused by Ukraine’s success in destroying Russian energy infrastructure and the continued closure of the Persian Gulf.

US crude inventories continue to fall. The spread between the Brent and US WTI benchmarks is historically narrow, indicating increased US demand to replenish supplies.

Russia’s 2022 invasion of Ukraine and the religious fervor of Iran’s military dictatorship have both shown the value of energy security, something the US possesses and is well positioned to offer to our friends and allies. US energy assets remain cheap.

We have two have funds that seek to profit from this environment:

Energy Mutual Fund

Energy ETF

Important Disclosures

The information provided is for informational purposes only and investors should determine for themselves whether a particular service, security or product is suitable for their investment needs. The information contained herein is not complete, may not be current, is subject to change, and is subject to, and qualified in its entirety by, the more complete disclosures, risk factors and other terms that are contained in the disclosure, prospectus, and offering. Certain information herein has been obtained from third party sources and, although believed to be reliable, has not been independently verified and its accuracy or completeness cannot be guaranteed. No representation is made with respect to the accuracy,  completeness or timeliness of this information. Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments.  Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

References to indexes and benchmarks are hypothetical illustrations of aggregate returns and do not reflect the performance of any actual investment. Investors cannot invest in an index and do not reflect the deduction of the advisor’s fees or other trading expenses. There can be no assurance that current investments will be profitable. Actual realized returns will depend on, among other factors, the value of assets and market conditions at the time of disposition, any related transaction costs, and the timing of the purchase. Indexes and benchmarks may not directly correlate or only partially relate to portfolios managed by SL Advisors as they have different underlying investments and may use different strategies or have different objectives than portfolios managed by SL Advisors (e.g. The Alerian index is a group MLP securities in the oil and gas industries. Portfolios may not include the same investments that are included in the Alerian Index. The S & P Index does not directly relate to investment strategies managed by SL Advisers.)

This site may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involves a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of SL Advisors LLC or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made. r

Certain hyperlinks or referenced websites on the Site, if any, are for your convenience and forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with SL Advisors LLC with respect to any linked site or its sponsor, unless expressly stated by SL Advisors LLC. Any such information, products or sites have not necessarily been reviewed by SL Advisors LLC and are provided or maintained by third parties over whom SL Advisors LLC exercise no control. SL Advisors LLC expressly disclaim any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites.

All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be suitable or profitable for a client’s investment portfolio.

Past performance of the American Energy Independence Index is not indicative of future returns.