Source: Fortune
Summary
The US leads the world in crude oil and natural gas production, but the top exporters are shipping near their capacities, allowing them to reap larger profits but not fill the supply gaps caused by the temporary loss of 20% of global oil and liquefied natural gas (LNG) volumes triggered by the effective closure of the Strait of Hormuz near Iran. President Donald Trump’s pledge to insure and protect oil and LNG tankers in the effectively shuttered waterway helped stop the surge in oil and gas prices. US exporters will “definitely profit more” from the situation, according to Mathieu Utting, global gas and LNG analyst for Rystad Energy.
Our Reading
The numbers tell one story. The US is insulated from the impact of the Strait of Hormuz closure due to its world-leading production. US exporters like Venture Global and Exxon Mobil are poised to profit from the situation. The US Navy’s pledge to escort tankers through the Strait of Hormuz is a calculated move to ensure the free flow of energy. The situation is a boon for US exporters, but a nightmare for Europe and Asia, which rely heavily on imported LNG. The US is filling the gap, but not filling the need.
Author: Evan Null
