The Iran War Highlights the Importance of Energy Security, S&P Global Says U.S. LNG Investment Gains Momentum
S&P Global said the war with Iran and the disruption it caused to global energy markets was driving investment in new U.S. liquefied natural gas (LNG) export infrastructure. Daniel Yergin, vice chairman of S&P Global, energy consultant and historian, said that the trend of increased LNG investment in the United States is expected to continue in the next 12 months as the obstruction of freight passing through the Strait of Hormuz highlights the importance of geographical diversification of the supply chain. “The U.S. LNG investment momentum is quite strong,” Yergin said. "Energy security and alternative energy chokepoint options will receive further attention." "We will see buyers more strongly view U.S. LNG as a diversification option," he added. Since the outbreak of the war with Iran, the United States, the world's largest LNG exporter, has helped make up for some lost supplies from the Middle East, especially to Europe and Asia. Meanwhile, uncertainty remains over when Qatar Energy will resume production at the world's largest liquefied natural gas facility. The facility was damaged by an Iranian missile attack early in the war. S&P Global's research on the economic impact of U.S. LNG shows that U.S. LNG exports have a "minimal" impact on domestic household costs despite soaring natural gas prices in Europe and Asia. “At a time when global energy is experiencing the biggest disruption since World War II, prices have fallen, which shows how abundant and huge the U.S. natural gas reserves are that are economically viable,” Yergin said. Eric Eyberg, vice president of natural gas and LNG consulting at S&P Global Energy, said that in the next 6 to 12 months, the United States is expected to approve another LNG export project with an annual production capacity of 30 million tons.