With conflict around the Strait of Hormuz causing an approximate 20-percent shortfall in the world’s natural gas market, natural gas prices have spiked globally while remaining relatively stable in the United States – a liquefied natural gas (LNG) exporter. In a new insight, Director of Energy and Environmental Policy Shuting Pomerleau analyzes U.S. production and export capacity to determine whether the United States is able to offset global supply disruptions in the near future.

Key points:

• The price disparity of natural gas between the United State and Asia and Europe is primarily due to market fragmentation.
• While the United States is the leading global exporter of LNG, it is at export capacity; further, export is logistically challenging, meaning it is difficult to scale those exports quickly.
• Current infrastructure bottlenecks mean the U.S. ability to mitigate Persian Gulf disruptions in the immediate future is physically capped; moving forward, the U.S. role in the world’s natural gas market will depend on whether long-term export capacity expansion aligns with the future global demand landscape.

Read the analysis.