**Jared Kushner and Steve Witkoff want to sweeten a Ukraine peace deal by offering up Europe’s gas market to Vladimir Putin. Trouble is, it’s not Washington’s to give – and ‘gas-for-peace’ is a bitter pill that Europe swallowed decades ago and has regretted ever since.** Donald Trump’s envoys raised restarting Russian pipeline flows with Volodymyr Zelenskyy in Kyiv in September, then with European officials, according to a New York Times report this weekend. Unencumbered by even a rudimentary grasp of European history, Kushner and Witkoff think they have devised a genius plan to secure peace. It goes like this: _Ukraine would collect transit fees from Russia. European voters would get ‘cheaper’ energy. Russia would get its best customers back. And everybody lives happily ever after._ Sadly, this deeply existential, ideological conflict cannot be fixed as if it were a real estate transaction. Russia was already selling gas to Europe at record volumes when Putin decided to invade Ukraine. Returning to the _status quo ante bellum_ is hardly going to convince the Kremlin to abandon its maximalist military objectives. The architects of the proposal must know this, which suggests there are ulterior motives at play. ✍️ __This 1,500-word Hot Take is__ _****free to registered readers****_ __.__ __Sign up to Energy Flux on the free tier to continue reading...__ Register for instant access ### This post is for subscribers only Become a member to get access to all content Subscribe now

**With European natural gas prices now racing to highs not seen since late 2022, how much slack the EU market has this winter is very much a live question.** Front-month Dutch TTF, the EU gas benchmark contract, settled above €87 per MWh on Tuesday and Wednesday, before a modest pullback on Thursday. Meanwhile, Morgan Stanley raised its winter TTF price forecast to ~€90/MWh, with “risks still skewed to the upside”. The investment bank warned TTF could reach €135/MWh on “some combination of a prolonged Qatar outage, colder weather or other LNG disruptions”. As flagged in Flux Exchange yesterday, this passage from their European Gas Manual jumps out: > _“Profit-taking as TTF approached €80/MWh in early September was … unsurprising, given the looser balances expected over these months. However, the underlying winter risks have not been fully resolved, leaving room for the rally to resume as heating demand builds and European LNG buying starts to rise again.”_ The latest ICE Endex Commitment of Traders report for the week to 9 October shows investment funds pivoted back into TTF buy-mode after six straight weeks of reducing their net long position. As discussed below the paywall and in this week’s subscriber-only Chart Deck, this is at least partially driven by real buying; options drift (the so-called “gamma effect”, where higher prices inflate the CoT footprint of options) is at most limited. TTF price rises since 9 October suggest speculative capital continued buying into this week too. With no end in sight to the enduring Hormuz crisis and the Saudi-Ansar Allah conflict threatening further regional destabilisation on the cusp of heating season, there is very little to temper the ballooning prompt delivery risk premium. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Digging deeper into ENTSOG’s numbers Whatever the mix of bullish drivers, this pre-winter rally suggests the market sees the fundamentals as less reassuring than ENTSOG’s winter outlook implied. As Energy Flux argued last week, that outlook rested on some big caveats. The annexes to ENTSOG’s outlooks are a treasure trove of data. We’ve done some further digging, and discovered there’s another brave assumption buried in its numbers relating to Ukraine. For the first time, Europe’s gas network operators modelled Ukraine’s whole gas system, storage and all. It turns out to matter more than the report lets on. Ukraine’s demand figures were missing from the data initially published alongside the outlook; ENTSOG corrected the annex on 9 October. When we asked, it declined to publish the modelled flows at Ukraine’s borders, saying these “represent one of several possible solutions within the model”. So we worked out the net flow ourselves from its published data. The result is striking; it turns out, the caveats embedded in the winter outlook run much deeper than most people realise. * * * ## In this issue: * **The Ukraine-sized hole** in ENTSOG’s assumptions, and what it means for Europe’s winter gas supply outlook * **Ukraine relaxes gas export restrictions** and starts auctioning export volumes – will these move the needle in a harsh winter? * **The Hormuz reality inflection** : how TTF at ~€87 is implicitly pricing a more realistic view of constrained LNG exports from the Persian Gulf * **TTF speculators are back in buying mood** , but how close are they to running up against risk budget constraints? Our **Value-at-Risk** model shows whether this bull run has legs **Plus the full suite of 140 slides in the Chart Deck itself:** * TTF / JKM / Henry Hub term structures & inter-basin arbitrage economics * Freight rates, global LNG netbacks and physical flows by region * The **TTF Risk Model** , our **LNG Physical Balance Index** and **Storage-Speculation Nexus** analytical model And as always, our trio of interactive data models – the Risk Spine, Risk Cube and Quantum Transits models – are updated weekly with the latest inputs. Browse the gallery here. Instant Access ****Upgrade for the full**** _****Energy Flux****_****analytical package**** covering physical and financial factors driving price formation in the European gas market. Upgrade to unlock the Chart Deck + subscriber-only analysis 🔓 **Paid subscribers:** Download this week’s Chart Deck PowerPoint (.ppsx) Adobe PDF (.pdf) ### This post is for subscribers only Become a member to get access to all content Subscribe now

✍️ __This is a special guest post authored by__ Yuriy Humber__, President of Yuri Group and founder of__ Japan NRG There is a neat and persuasive story about Japanese LNG demand. It goes like this: the country panicked after Fukushima, shut its nuclear reactors, bought enormous quantities of gas to keep the lights on, and has been slowly unwinding that emergency ever since. Nuclear plants are returning, solar panels keep multiplying, batteries are finally arriving at scale and Japan’s population continues to shrink. Draw a line through LNG imports since their post-Fukushima peak and it points reassuringly down and to the right. The story may even turn out to be correct. **But we should probably resist writing Japan’s obituary just yet.** There is a plausible alternative in which Japanese LNG consumption stops declining, and could even rise again for a period. The case does not rest solely on the now-obligatory promise of voracious AI data centres. It is also being built into the plumbing of Japan’s electricity system: slower nuclear restarts, rising power demand, increasingly violent swings in renewable output, transmission constraints, new gas-fired generating capacity and a growing need for fuel that can be summoned during particular hours and seasons rather than burned evenly throughout the year. So, you’re telling me there’s a chance? Mitsubishi Corp certainly seems to think so. In September, Japan’s largest trading house joined Shell and others in approving the second phase of LNG Canada, doubling the project’s capacity from 14 million tonnes per year to 28 million. Mitsubishi expects to spend about ¥500 billion ($3.1 billion) on its share of the expansion and, from the early 2030s, increase its own offtake from 2.1 Mtpa to 4.2 Mtpa. The additional Mitsubishi volumes are expected to be marketed mainly into Japan. That is a fairly substantial wager for a country supposedly approaching the twilight of its LNG age. It is not the only one. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## **The bear case is hard to dismiss** Japan imported roughly 66 million tonnes of LNG in 2024, far below the volumes reached after the Fukushima disaster forced most of the nuclear fleet offline. That decline is easy to project forward: drawing on the targets in Japan’s sixth Strategic Energy Plan, IEEFA forecast in 2024 that demand would fall to about 50 Mt by 2030. More recently, _Energy Flux_ projected a 2030 range of 45.3–64.7 Mt. Our pre-Hormuz-crisis Japan NRG scenarios are substantially higher, at 68.5 Mt in the base case and 67.4 Mt even in the lower case, and all assume nationwide power demand will resume growing. The downward case is compelling. Japan has a statutory commitment to carbon neutrality by 2050. Solar already supplies close to 10% of electricity and the latest energy plan seeks to lift renewables from 22.9% of generation in FY2023 to 40–50% by FY2040. Nuclear is targeted at around 20%. Thermal generation, which still accounted for 68.6% in FY2023, is supposed to fall to only 30–40%. (Although, how that “thermal” moniker splits between gas and coal is undefined). And nuclear restarts have also continued, however slowly. Add continued efficiency gains, a smaller population, a bustling battery storage sector and steadily expanding renewable capacity and it is not difficult to arrive at the conventional conclusion: every reactor restart and every new solar farm takes another bite out of the LNG requirement. Except, the arithmetic of Japan’s future power system is becoming less straightforward. Deep Dive | Instant access The straight-line story of decline is built on annual totals. The rest of this Deep Dive looks at the hours, seasons and contracts where Japan’s need for gas actually shows up. It explores: * ****The flexibility premium**** : Why Tokyo’s LNG plants are ramping output at gigawatt-scale in sunny days in March * ****The nuclear misconception**** : Why faster reactor restarts don’t remove the need for flexible gas * ****The auctions carve-out**** : How an auction for decarbonised power ended up awarding more capacity to LNG than to any other source * ****The supply signal**** : Japan’s largest LNG buyer signed a multi-decade contract and is sourcing winter-only cargoes – can this really all be for trading and resale? * ****All of the above**** : How Kyushu is building new gas plants despite hosting Japan’s greatest concentration of solar and a large nuclear fleet ****💥**** __Article stats: 3,000 words, 14-min reading time, 5 charts__ Need access? Unlock the full analysis with a Premium subscription to Energy Flux ### This post is for subscribers only Become a member to get access to all content Subscribe now

Iranian attacks on tankers around Hormuz are at their highest since the war began. An LNG carrier was struck near the Strait on Monday, and a tanker was hit late on Wednesday off Qatar. Dutch TTF traded briefly above €80/MWh on Thursday for the first time in three weeks. Later that day Donald Trump said the US would not strike Iran before next month’s midterms, and by the evening TTF was back below €78. The geopolitical rollercoaster continues; TTF is up more than 60% in three months, and almost 10% since the start of October. It looks increasingly likely that €80/MWh will be a new support level well before the month is out. Who is _not_ chasing this rally matters as much as who _is_. Investment funds have cut their net length in TTF for six straight weeks, mostly as prices rose, while commercial firms (the physical players trading the molecules and tasked with replenishing storage) added 80 TWh. We read that as a genuine risk premium, not a speculative bubble: physical supply risk mounting as winter approaches. ENTSOG, Europe’s gas network operators, did their best to strike a more upbeat note this week while cautioning about outlier risks in a worst-case scenario. The facts are less generous than even that sobering assessment. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## ENTSOG’s cautious winter reassurance comes with big caveats **ENTSOG’s latest** Winter Supply Outlook**concludes that Europe’s gas infrastructure “remains sufficiently flexible to meet demand”. That is welcome news. But it comes with some big caveats.** The starting point is tricky. Storage began October 72% full, against 83% a year earlier. And as ENTSOG itself notes, conflict in the Middle East is still restricting LNG shipments through Hormuz. Europe must compete harder with Asia for cargoes. So how does ENTSOG square this with its reassurance? Largely by taking a rosy view of LNG. Its central case has Europe repeating its best month of LNG imports in recent winters, every month until spring. That adds up to about 91 billion cubic metres over the winter, equivalent to about 35 LNG cargoes per week. Europe’s all-time record, set last winter, is 83 Bcm (roughly 32 cargoes per week). Even then, storage ends the winter short of the 30% level that ENTSOG’s model aims for. If LNG merely matches last winter’s record rather than exceeding it, our sums leave storage only about one-fifth full by the end of winter – the lowest since 2018. And that’s before you factor in a prolonged cold snap, supply shock, or demand proving to be less flexible than ENTSOG’s models assume. ENTSOG assumes that Russian LNG, banned in the EU from January, will simply be replaced. Its own figures imply Russia supplied about a seventh of the EU’s LNG imports last year. Finding that gas elsewhere means outbidding Asian buyers in a market Hormuz has already tightened. It also does not account for logistical constraints shipping Russian LNG beyond Europe when EU LNG terminals are off limits for reloadings. ENTSOG’s own stress test shows how thin the margin really is. In a severely cold winter, Europe would have to cut, or go without, about 7% of its gas demand, 12% if LNG imports fall short, and 15% if Russian flows via TurkStream stop as well. Last year’s Winter Outlook is a reminder that reality can fall short. ENTSOG projected storage to end the winter at 32%. In the end, it landed below 28%. To be fair, ENTSOG’s job is to operate the pipes and terminals, not to predict the market, and it stresses that its outlook is not a forecast. But its outlook does not model prices; it assumes the gas simply turns up. In reality, price decides that, by pulling in cargoes or pricing out demand. * * * ## The mechanics of EU price formation If price decides whether the gas turns up, the question is what sets that price, and the _Energy Flux_ **Chart Deck** measures every lever, every week, across 140 slides. Below the paywall, this week’s top five charts show: * **funds cutting into a rally** , and how options drift masks how speculative capital is really positioned * **how the LNG market rewards flexibility** and punishes those who must buy optionality at short notice * **the razor-thin arb to Asia** and how sunk costs factor into Europe’s winter energy security * how the permacrisis is not just keeping the wolf from the US LNG door but **feeding it handsomely** , into the 2030s if the forward curve is to be believed Plus the full term structure, freight, inter-basin arbitrage, Hormuz crossings and global LNG flows, the TTF Risk Model, LNG Physical Balance Index, and Value-at-Risk analytical mode. And as always, our trio of interactive data models – the Risk Spine, Risk Cube and Quantum Transits models – are updated weekly with the latest inputs. Browse the gallery here. Instant Access ****Upgrade to read the five charts that matter this week,**** with our analysis, and download the full 140-slide Chart Deck for a granular analysis of everything from physical to financial factors driving price formation in the European gas market. Upgrade to unlock the Chart Deck * * * **Paid subscribers:** Download this week’s Chart Deck PowerPoint (.ppsx) Adobe PDF (.pdf) ### This post is for subscribers only Become a member to get access to all content Subscribe now

**After months of downplaying winter risks, European leaders are belatedly waking up to the harsh reality that the region’s energy security is, still, in the lap of the gods.** The headlines over the past week marked a notable directional pivot. While European capitals are calibrating their public messaging to avoid spooking markets, panicky private communiques and hasty interventions on the eve of winter are far from reassuring. The European Commission is looking at delaying implementation of the EU’s flagship methane regulation, having already gutted the mechanism under intense pressure from industry and member states. Separately, the bloc’s energy chief has urged member states to curb energy demand to reduce gas and electricity consumption amid “exceptionally low” storage levels. Meanwhile Germany, which is blessed with some of Europe’s biggest storage sites but cursed by an inability to manage them effectively, is finally instructing state-owned SEFE to procure extra gas to narrow the country’s yawning storage deficit. Every one of these U-turns felt simultaneously inevitable and ineffective. Ministers and commissioners for too long have pretended the opposite: no action was needed, and when they realised something must be done, that half-baked measures would be enough. If the weather is cruel this winter, it will reveal just how inadequate Europe’s response to the Hormuz crisis has been all along. ## __FREE READ__ – Unlock this article by signing up for free 💥 Energy Flux 💥 __—__ __fiercely independent energy market analysis__ Subscribe Email sent! Check your inbox to complete your signup. Free newsletter. No spam. Unsubscribe anytime. ### This post is for subscribers only Become a member to get access to all content Subscribe now

Late on Tuesday, Donald Trump posted that “Iran Has Lost Control of the Strait”, capping a fortnight of US claims that the blockade works and the strait is open. Many commentators and analysts were taken in by this. The shipping record disagrees. UKMTO disclosed four tankers struck on 28–29 September and a fifth set on fire on 1 October. Then Iran’s strait authority said the three tankers hit on 29 September were on its list of non-compliant vessels. That is not the language of a state that has lost control, so much as one running a permit system. Dutch TTF, the European gas benchmark, still ended September at €72.36/MWh, 12% below its mid-month peak, as the headlines declaring ‘flows full restored’ piled up. ### A valve, not a wall Our analysis of Kpler’s vessel-tracking data shows 17 laden LNG carriers left the Gulf in September, up from six in August but against 99 in January. Most commentary reads rising traffic as Iran losing its grip. Few consider the alternative: that Iran is letting more ships through to stop its leverage wasting away. Every month of closure pushes buyers to engineer the strait out of their supply chains. A controlled flow keeps them invested in reopening, rewards friendly Asian buyers and shows who decides. Flows that rise at Iran’s discretion can fall at Iran’s discretion. Our Quantum Transits model puts TTF’s implied odds of indefinite closure at 53%, from 57% a week earlier. The odds eased because prices fell in a week when more ships were struck, not fewer. ### What the deck shows Headlines and the price ticker cannot tell you who is driving the market, how much firepower is left, or what happens after the heating season. This week’s 140-slide **Chart Deck** tracks all three, with proprietary models built for exactly this kind of uncertainty: * **Who is driving TTF:** our TTF Sentiment Tracker and Storage-Speculation Nexus show whether fund money is leading the price or riding it. * **How much risk room is left:** our Value-at-Risk section measures fund risk against the level where buying has historically stalled, now on a corrected volatility series. * **Where storage exits winter:** a new chart replays 15 winters from today’s fill level. * **Who wins the LNG capacity race:** new charts track every IEA capacity update since June 2025, including Wednesday’s revision. Plus the full term structure, freight, inter-basin arbitrage, Hormuz crossings and global LNG flows, and the TTF Risk Model. And as always, our Risk Spine, Risk Cube and Quantum Transits models are updated weekly. Instant Access ****Upgrade for the full Chart Deck and our five charts of the week:**** where Europe exits winter, who is winning the LNG capacity race, and the price at which funds’ risk budget fills. Upgrade to unlock the Chart Deck * * * **Paid subscribers:** Download this week’s Chart Deck PowerPoint (.ppsx) Adobe PDF (.pdf) ### This post is for subscribers only Become a member to get access to all content Subscribe now

**Peace talk moved gas prices once again this week.** The hopium dose was homeopathic: Donald Trump told Fox he would “probably be open” to meeting Iran’s president. Dutch TTF, the EU gas benchmark, duly fell 8% on Monday to €73/MWh, helped by warmer forecasts, improved Norwegian gas supply, and indications of Ukrainian gas leaving storge. By Thursday it was back at €75/MWh, from €72 at Wednesday’s close. The market still reacts to reopening talk, but every time a little less dramatically. Hormuz is now an “interruptible” waterway, as Wood Mackenzie’s Simon Flowers put it. A peace headline cannot make it dependable. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ### Odds on for a long closure Goldman Sachs sees TTF at €105/MWh by year-end if Middle East LNG exports show no meaningful winter recovery. Use that as the prolonged-closure price in our Quantum Transits model, alongside the default €35 for a durable reopening, and Thursday’s settlement implies a 57% closure probability. On the same assumptions, late May’s reading was just 18%. These are scenario-implied odds, not a forecast: change either price and the answer changes. The direction of travel is harder to dismiss. In the week to 22 September, just three laden LNG cargoes left the Gulf, roughly 15% of pre-war flow. In May we wrote: “Either missing cargoes return, or TTF moves higher.” The cargoes have not returned in force; TTF has climbed from €47 to €75. Reality is dawning, one peace sell-off and upward correction at a time. INteractive data models Paid subscribers can explore the Quantum Transits model with their own price assumptions. It is now updated weekly with the latest Hormuz crossings data, alongside the Risk Spine and Risk Cube. Explore the data models ### Beneath the sell-off This week’s **Chart Deck** follows the buyers beneath the headlines: * Funds have sold into a rising market. _How much room have they created to buy again_ , and who has absorbed the selling? * Options now account for _more than half of fund net length_. Expiry could make next week’s positioning report deceptive. * Asia’s freight hurdle and Europe’s storage shortfall: _Why neither offers much winter comfort._ The 139-slide deck includes eight new charts, refreshed gas benchmarks monitoring, and enhanced charting throughout. Download it in PDF or PPSX below. instant access Below the paywall: the full picture on fund positioning and the options split, the storage sprint and how freight moves the arb, plus the ****Chart Deck**** itself: 139 slides, PDF and PPSX downloads. 👉 Unlock the Chart Deck, analysis and data models 👈 **Paid subscribers:** Download this week’s Chart Deck PowerPoint (.ppsx) Adobe PDF (.pdf) ### This post is for subscribers only Become a member to get access to all content Subscribe now

**What a difference a year makes. Or should that be, what a difference a _war_ makes.** Gastech 2026 in Bangkok felt quite distinct to the America-dominated LNG hard-sell extravaganza that was Gastech 2025 in Milan. This year the event had a more muted business-as-usual vibe thanks to tectonic shifts unfolding in the Middle East. The glitzy Gastech event is still the gas industry’s biggest party (and boy, what a party it was). But this time the only people in the mood to celebrate were the sellers. Or more precisely, those selling LNG sourced from _outside_ the Persian Gulf. Prolonged closure of Hormuz has given a shot in the arm to the US LNG industry, its financiers, offtakers and portfolio players. Prior to March 2026 a structurally lower gas pricing regime was looming, threatening to squeeze margins and throttle investment in new liquefaction projects into the 2030s. The more-than doubling in European wholesale gas prices since the US-Israel offensive has dispelled those fears for at least another year or two. The Hormuz crisis juiced transatlantic margins and rained windfall profits down on anyone with flexible non-Hormuz LNG optionality on their books. ## Buyer’s market postponed, again This is all old news, but it has taken a while for LNG buyers to internalise the structural realignment precipitated by the Iran war and unrest reverberating across the Middle East. Beleaguered buyers stung by the sudden loss of Qatari volumes have endured soaring spot prices while holding out for relief, guided by the LNG industry’s own promise (repeated countless times at Gastech) that the Hormuz crisis will be a momentary blip. The dawning realisation that Hormuz might never fully reopen has driven buyers to seek alternative supply routes. Diversification was the buzzword in Bangkok, and the deals sheet reads as a collective vote to buy LNG from anywhere but the Persian Gulf. #### Notable LNG deals signed at Gastech 2026 * Brazil’s Petrobras took its first US term supply, a 20-year sale and purchase agreement (SPA) from Sempra’s Port Arthur Phase 2 * China Gas added supply from Venture Global’s Louisiana portfolio, notable less for its size than for restarting US-China LNG contracting after last year’s trade-war freeze ahead of this week’s Trump-Xi summit in Washington * South Korean steelmaker POSCO signed a 10-year heads of agreement with Australia’s Santos, and Santos in turn lined up 1 mtpa for 20 years from Canada’s Ksi Lisims, explicitly to add a non-Australian leg to its Asian supply * Gastech host PTT, Thailand’s state energy major, signed three deals including a long-term purchase from Equinor and resale to Korea’s GS Energy Trading, framing them as broadening its procurement * TotalEnergies signed a long-term SPA to supply portfolio LNG to GS Energy in South Korea * Glencore signed a 10-year supply deal with a subsidiary of China Suntien Green Energy, to be sourced from its global portfolio The idea is that spreading import dependence across diverse outlets and contractual tenors will shield buyers from who knows how many more years of geopolitically-fuelled energy market volatility. That is the hope, at least. ## From hard sell to soft power Last year’s Gastech event was characterised by the overwhelming political firepower of the high-ranking US delegation. Not one but _two_ Trump cabinet secretaries (DoE’s Chris Wright and DoI’s Doug Burgum) took to the stage to deliver a double-barrelled barrage of MAGA alternative energy facts that left the assembled press pack dumbfounded. My takeaway back then was that the US LNG industry saw the writing on the wall and wheeled out the big guns. Evidently in late 2025 they felt the need to hard-sell their product to a reluctant European crowd unconvinced of the benefits of long-term contracts on the cusp of a long-awaited new era of global LNG oversupply. With Hormuz closed, the US no longer faces the same sales challenge. This year, the US presence was less about force-feeding the LNG narrative at muzzle velocity, and more focussed on the slow-burn technocratic nitty-gritty of prizing open new markets. Instant access How is America turning wartime disruption into long-term LNG business? Subscribe to read my reporting from Bangkok on the quiet diplomacy behind the deals, Qatar’s shrinking options, and the demand problem that could spoil the party. ****Upgrade to Premium for the full Gastech 2026 write-up 👇**** Unlock the Deep Dive 🔓 ### This post is for subscribers only Become a member to get access to all content Subscribe now

I am packing up after a long week at Gastech 2026 in Bangkok. As ever, it was a pretty intense few days – and a lot of fun. I published a few walk-and-talk video clips on LinkedIn while at the show, which you might have seen. If not, they are now all spliced together in a single 17-minute YouTube videopod that you can watch here: The most entertaining moment was being challenged to a dance-off by a Thai robot on the exhibition floor. But the real lasting takeaways came from meeting new people and catching up with old friends and contacts. I'll write more soon when I'm back at the desk. –Seb

**The European gas market is ablaze, again.** Front-month Dutch TTF, the benchmark contract, ripped above €80/MWh on Wednesday for the first time since 2022, then leapt above €82 on Thursday, a fifth straight gain. The inferno has been fuelled from every direction this week. Ukraine executed its deepest strike of the war, flying drones 3,000 km to hit two gas condensate plants in Yamal-Nenets, one landing 600 km from Yamal LNG. No LNG output was reported lost, but Russia’s Arctic gas heartland is now in range. South**** Korean, Taiwanese and Indian utilities are tendering for October–November cargoes; Bangladesh has agreed $28/MMBtu, its most expensive since 2022; Pakistan’s third tender in ten days drew no bids. Demand flexibility absorbed much of the Hormuz supply crisis, but as we warned, at some point it cracks. We seem to have arrived at that moment. There is no supply relief on the horizon. The US and Iran are re-escalating in the Persian Gulf.**** Washington hit eight Iranian tankers in four days; Tehran answered with the biggest declared wave of attacks on shipping since the war began and called Hormuz “totally closed”. The market may soon forget LNG ever flowed through it. And Europe’s sorry storage saga drags on. EU-wide stocks are 67% full against a seasonal norm of 83%, pretty much the lowest on record for this time of year. Europe enters winter almost naked, with no meaningful buffer. Pray to the weather gods. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ### **Hedge funds cash in** The rally provided investment funds a perfect profit-taking opportunity. Funds have been sitting on an excessive net long TTF position for weeks, waiting patiently for their moment to cash out. They sold into the early stage of this rally two weeks running: 43 TWh of net length offloaded in the fortnight to 4 September, to 211 TWh. Since then, the front month rose 9% then another 10% on Wednesday. We don’t know at what price they bought in (I am developing a tool to estimate this – stay tuned); but if funds bought length in early August when the front strip was trading below €60, then their positions would be deep in the money at today's €80. **The wrinkle is options**. ICE now splits funds’ futures from their TTF options: last week more outright futures were sold than the headline shows, while the options slice swelled with the price. What does that do to their risk budget? We dissect below, and in the Chart Deck. ### **EU storage: too little, too late?** I have written plenty on Europe’s storage deficit, and the data left no room for contrarian points: the situation is worrying. That said, the recent injection pace has improved in recent weeks, lifting our central 1 November projection to **73.3%** , from 70% in the mid-August deck. Check out the sensitivity projections around that in the Chart Deck (and don’t forget to explore our EU Gas Winter Stress Tester to model your own scenario). ### **Also new in the deck** The Chart Deck has been substantially improved and refined over the summer, with several additions to the suite of slides including: * **TTF forward curve heatmap:** winter 2026/27 months are the brightest cells since mid-2023, repricing out to 2029. * **US–Asia heatmap:** the LNG arbitrage signal, visualised over time, shows how Asia wins the tug-of-war only in patches; on average US cargoes still point at Europe. * **TTF volatility and RSI:** momentum is stretched on daily and weekly readings, yet 20-day realised volatility is in the bottom fifth of its range since 2020. That’s a surprisingly quiet tape, by TTF standards. * **Options sensitivity in the VaR analysis:** 44% of fund length is held via options. That puts the risk estimate just above its threshold on our volatility gauge. How will the profit-taking leave funds positioned? * **Asia physical-paper spread:** physically delivered North Pacific LNG trades $2.70/MMBtu above JKM. A thin contract, but a real premium. What should we read into this? 🧊 And the interactive VaR models are now refreshed weekly: do not miss The Risk Spine and The Risk Cube. The Risk CubeInteractive Data Models - by Energy FluxInteractive data models for gas and LNG markets: TTF fund risk rebuilt weekly, a winter storage stress tester you set yourself, and more. Paid subscribers.💥 Energy Flux 💥 instant access Below the paywall: ~1,200 words on fund positioning and the options split, the storage endgame and the global LNG supply squeeze, plus the ****Chart Deck**** itself: 120+ slides, PDF and PPSX downloads. 👉 Unlock the Chart Deck, analysis and data models 👈 **Paid subscribers:** Download this week’s Chart Deck PowerPoint (.ppsx) Adobe PDF (.pdf) ### This post is for subscribers only Become a member to get access to all content Subscribe now

**ICE Endex, the exchange where the benchmark EU gas contract Dutch TTF is traded, quietly added a new line to its Commitment of Traders report last week that could sharpen our understanding of European gas markets.** At first glance, the unassuming row of numbers buried in an obscure data sheet appears unremarkable. Look closer, and it reveals a great deal about the structure of the European natural gas market and the incentives that govern it. Until now, CoT positioning data bundled TTF futures and options together, as X terawatt-hours of long positions and Y terawatt-hours of shorts. Everyone knew _some portion_ was held through options, but the public report did not reveal how much. Now we know the answer, and it’s a moveable feast: the options data will be updated from week to week. Options behave differently from outright futures, so this new TTF data stream opens another dimension in our ongoing analysis of price, positioning, conviction, volatility and risk. Under the new reporting rules, ICE now publishes both a combined count and a futures-only count. The first split, for the week to 28 August, shows that roughly two-fifths of investment funds’ net bullish exposure came through options: Investment-fund positions in TTF, week to 28 Aug 2026| Long, TWh| Short, TWh| Net, TWh ---|---|---|--- Futures plus options the number we have always used| 369| 149| 219 Futures only| 321| 189| 133 Held through options the difference| +47| −39| +87 Source: ICE Endex Commitment of Traders (MiFID II). Energy Flux © 2026 As you can see, four in ten TWh of the funds’ net length sits in options, not futures. On the other side of that trade are the banks and brokers, whose options slice is 101 TWh short. Those options already entered _Energy Flux_ ’s positioning and risk calculations through the combined series. The new disclosure lets us look inside that number, and it lays bare a paradox: reported fund length can grow without a single new trade being executed, while two positions that look identical in the weekly report can lose very different amounts in a big market move. Resolving that paradox is what this article sets out to do. We will follow an option from its payoff to how it is counted in the weekly CoT report, then explore how different options assumptions might affect our reading of risk – and how the new options data will be used to enrich our coverage of the European natural gas market. 💥 _**Article stats:** 2,600 words, 10-min reading time, 7 charts and tables_ ### This post is for subscribers only Become a member to get access to all content Subscribe now

The European natural gas market is trading at the €70 per megawatt-hour mark for the first time since January 2023 on the belated realisation that global LNG supplies will be constrained by the Hormuz crisis throughout most of winter. The exact trigger was Italian utility Edison confirming that QatarEnergy has extended its force majeure notice to November, which should come as a surprise to precisely nobody who has been paying attention to the situation in the Middle East. Markets spent the summer trying and mostly failing to price the prolonged-Hormuz scenario. Last week the dam finally broke. The move to €70/MWh was not confined to front-month Dutch TTF, the EU’s benchmark contract: the entire winter strip repriced upwards by roughly 15% over the last month, and now sits at €50–67/MWh from October through March. Winter risk is finally showing up where it belongs: in the winter curve. If anything, the surprise is that it took this long. Regular readers will be familiar with the _Energy Flux_ position on the intractability of the Hormuz crisis, and on the blasé confidence of markets that priced a rapid restart of Qatari LNG exports despite the evident logistical obstacles. Those Qatari chickens are now coming home to roost in half-empty European storage caverns. ## ‘Too optimistic’: Berlin baulks Germany has now conceded the point. “We were too optimistic,” Sebastian Kemper, managing director of market manager Trading Hub Europe, told Bloomberg last week. In May, THE had assumed Hormuz would reopen “shortly” and that storage economics would fix themselves. THE stands ready to buy gas for the state, but Berlin has not asked it to. Kemper now expects German storage “around 70% full before winter, or perhaps a little bit less.” Even that hedged number requires heroics. German sites stood at 53.0% full (130.7 TWh) on 30 August. Reaching 70% by the start of the heating season means injecting roughly 42 TWh in nine weeks, more than Germany has ever added from this point (the biggest such build was 39.4 TWh, in 2018, according to Gas Infrastructure Europe data). Repeating the historical average build instead lands Germany at about 59% on 1 October; matching the best-ever September gets to 62.5%. Whatever intervention now emerges will be too little, months too late. The continental picture is the same problem at scale. EU storage stood at 65.1% on 30 August. Project forward every August-to-October refill sprint of the last twelve years and the range for 1 October runs from 67.6% to 74.3%, with the central case at 71.1%. Even if the next four weeks match the strongest late-season build on record, Europe opens the heating season at 74.3%, a whisker above the lowest opening ever recorded (74.0% in 2021, the year that incubated the gas crisis). Filling to 80% before withdrawals begin is out of reach, never mind 90%. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## So, how bad could it get? That is the question everyone is now asking, and the answers on offer are impossible to compare: every desk carries different assumptions, most of them undisclosed. There is no common barometer. So instead of lamenting that fact, we built one: the**** EU Gas Winter Stress Tester, 2026-27 edition, an interactive data model, live now on the website for logged-in subscribers. The concept is simple. You set the conditions: winter severity, LNG inflows, industrial demand, Russian LNG ban compliance, wind, hydro, French nuclear, the opening storage level. The model plots the storage depletion path those conditions imply, and prints an estimate of how much more supply (or less demand) Europe’s gas market would need to keep storage levels within the seasonal range. 0:00 /0:17 1× It also reports the TTF price band most closely associated with the degree of storage tightness implied by the user’s input conditions. Every output is based on 2014–2026 gas market data, and the model comes pre-loaded with three scenarios: **Manageable** , **Tight** , and **Crisis**. The headline finding is that Europe enters this winter with the deck stacked against a ‘Manageable’ outcome. For storage to end March inside historical norms, essentially everything has to go right at once. If conditions simply stay as they are, the tanks end the winter well below the all-time low. The risk distribution is asymmetric, and not in Europe’s favour. The model quantifies exactly how far each factor moves the needle. So, how cold does it have to get before storage depletion enters uncharted territory? How much winter gas hangs on the Russian LNG ban, and what would full compliance do to storage depletion rates? Which dials genuinely move end-March storage, and which are rounding errors? What does history tell us about how TTF responds to differing storage levels? And what about French nuclear availability? All of these questions are answered below, and in the model itself. Unlock instant access The full analysis continues below: three modelled winters, the supply deficit they each imply, and the dials that genuinely move Europe’s gas balance. Paid subscribers also get the interactive Stress Tester, plus every other data model, Deep Dive and Chart Deck in the archive. Why not join them? 👉 Upgrade to Premium 👈 ### This post is for subscribers only Become a member to get access to all content Subscribe now

It is the dog days of summer, half the world is at the beach and the other half wishes they were too. I am firmly between the two camps, working slightly reduced hours and catching up on lots of overdue admin between visits to friends and family. This means there is no full Chart Deck this week or next. But I do have something new to share: interactive 3D charts that bring a fresh perspective to the Value-at-Risk (VaR) analytical model I’ve been developing in recent months. Both are live on the site because they won’t render via email, so you will need to click through and log in. You can spin, zoom, hover over any week and read the numbers off (note: this post is free to read, but the interactive chart elements are visible only to paid subscribers). Here’s what each one does: ✍️ Sign up for free to continue reading... Sign up ### This post is for subscribers only Become a member to get access to all content Subscribe now

**During a solar eclipse, the ‘dark’ side of the moon is entirely bathed in sunlight. At the same time, the Earth-facing side of the moon becomes silhouetted. An eclipse is thus a brief inversion of normality: illuminated areas go dark, and perennial shadow is bathed in pure light. All of this is a function of _syzygy_ : the perfect alignment of three celestial bodies.** In a sense, the European energy market feels like it has been caught in a months-long eclipse since the closure of the Strait of Hormuz in March. An eerie calm descended after the shock-and-awe of the initial US-Israeli offensive on Iran, as three overbearing powers conspired to keep market sentiment from boiling over. The syzygy of calibrated political messaging, optimism bias among market participants, and LNG demand deferral kept prices artificially cool under the fleeting umbra of the Hormuz eclipse. While everybody knows this surreal moment of calm totality cannot last, they are nonetheless captivated by it. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. The analogy extends to Baily’s beads, the string of light spots that appear around the Moon’s edge when the moment of totality passes. As the end of summer looms into view, irrefutable evidence of the winter disaster that’s creeping up on European energy markets starts to glimmer. The yawning EU gas storage deficit, collapse in European LNG imports, and rapidly expiring summer injection season left to address them both, are all glinting from behind the Hormuz eclipse of market rationality. As the interminable European summer heatwave drags on, the beads of data will grow in intensity, becoming impossible to ignore. **Paid subscribers:** Download this week’s Chart Deck PowerPoint (.ppsx) Adobe PDF (.pdf) Eventually the warning signs will bleed into each other and onlookers will be exposed to the full searing glare of reality: the thinnest of gas buffers going into a winter hamstrung by perennially constrained LNG supply, an extended Norwegian pipeline outage at Ormen Lange, and Alpine hydro reservoirs depleted by a months-long heat dome that sent more than a million acres of continental forests up in flames. With Dutch TTF trading around €61/MWh, some of the ballooning winter risk has been priced into the forward curve on Dutch TTF, but not all of it. This week’s subscriber-only **Chart Deck** highlights where the mispricing is most pronounced, how the economics of global LNG trade are shifting, and how investment funds are reacting. #### In this week’s subscriber-only Chart Deck: * Why our ****TTF Risk Model**** just did something it has never done before — and why funds are selling into the anomaly * The storage scenario nobody wants to price: where ****EU gas inventories**** actually land on 1 November if injection momentum holds * The volatility gift: our ****Value-at-Risk**** model that explains how funds are executing a winning exit from TTF length * The painful Hormuz hangover: why the most mispriced contracts on the TTF curve are ****not this winter**** * Freight rates crash and cargoes on the water go cheap: what the ****spot-curve disconnect**** says about the crunch ahead 💥 _****Article stats****_ __: 2,000 words, 8-min read time, 128-slide deck download__ Upgrade to Premium to unlock the downloadable +100-slide Chart Deck and subscriber-only market commentary below. Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs**** 👉 Get in touch 👈 ### This post is for subscribers only Become a member to get access to all content Subscribe now

**The US-Iran war has settled into something harder to price than outright escalation: a calibrated stalemate. Neither side can take a decisive move, neither will capitulate. Bellicose rhetoric is followed by kinetic action that changes little on the ground, but jacks up risks of unintended consequences and sideways escalation.** On Saturday, Ukraine struck an Iranian cargo vessel in the Caspian Sea with a long-range drone, killing a sailor. Kyiv said the ship was carrying drones and missiles to Russia. Tehran called it a “hostile and criminal act” carried out “at Israel’s behest” and vowed it could not go unanswered. For about 48 hours there was open speculation that Europe’s war and the Middle East’s were merging into one nightmarish transcontinental conflict. Then both sides stepped back. Kyiv reframed the strike as a response to Iran’s long-standing arming of Russia rather than the opening of a new front. Tehran’s threats stayed rhetorical. Analysts read the episode as messaging rather than a new battlefront. This is the calibrated stalemate in miniature: a real escalation, absorbed and defused, nothing settled, and a sting in the tail. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Cairo caught in the crossfire It didn’t stop there. Iranian state television reportedly named Egypt’s Damietta port as a possible target for retaliation against Ukrainian interests. Then a drone struck the _Energos Winter_ LNG floating storage and regasification unit at Damietta. The fire spread to a second floating LNG storage unit. No group has claimed responsibility for what is the first attack on Egypt’s Mediterranean coast. Energos Winter is one of four FSRUs that Egyptian state gas company EGAS relies on to bridge the gap between domestic production and peak summer demand, and the only one on the Mediterranean. Egypt’s other three FSRUs sit at Ain Sokhna on the Gulf of Suez, and they are already running hard through the cooling peak. Nor is there a spare: last summer Egypt topped up its fleet with the _Ertuğrul Gazi_ , chartered seasonally from Türkiye’s BOTAŞ in the first overseas deployment of a Turkish FSRU. That vessel is in Turkish waters this year, meaning Egypt is now short of import capacity on the Mediterranean side. The upshot is that, while Egypt might struggle to meet peak summer demand, LNG vessels destined to dock at Damietta could be sent elsewhere. There are plenty of underutilised terminals on the European side of the sea. Egypt leaned hard on LNG imports in 2025 and was expected to do the same this year. This week’s events could reverse that assessment. **Paid subscribers:** Download this week’s Chart Deck PowerPoint (.ppsx) Adobe PDF (.pdf) ## What that does to price Contradictory signals such as this have left the EU gas market choppy and range-bound inside a high collar. The Damietta strike is simultaneously bullish and bearish; meanwhile, Qatar sent its first LNG cargo through Hormuz in almost three weeks: the _Al Areesh_ , bound for Pakistan. More than a dozen tankers are idling at Ras Laffan behind it, a latent bearish risk. All this stokes volatility, in opposite directions. Dutch TTF closed last Friday at **€63.58** , fell to **€58.25** on Monday and **€57.73** on Tuesday, rebounded to **€60.42** on Wednesday’s Damietta news, and closed Thursday at **€58.18**. Four fairly large moves, with no discernible direction. This is a febrile market with conviction pulling both ways. TTF pushed the boat out past €60/MWh and rowed most of the way back. Prices are peaking; volatility is rising. So where does it go from here? This week’s subscriber-only **Chart Deck** offers several clues. * Our **Value-at-Risk analysis** shows the funds who drove this rally have run through their risk budget and now hold a book that costs far more to carry than it did a fortnight ago. * The **TTF** **Sentiment Tracker** shows their buying decelerating sharply even as prices rose. * Europe’s **winter storage** setup is the most consequential slide in the deck, with our central projection for 1 November refill slipping daily as injections languish. * The **TTF Risk Model** has printed its most bullish score since March, with every single input negative at once. * And the **Storage-Speculation Nexus** regression model shows where the smart money is positioned to exploit mispricing opportunities along the TTF futures curve. Upgrade to Premium to unlock the downloadable +100-slide Chart Deck and subscriber-only market commentary below. Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs**** 👉 Get in touch 👈 ### This post is for subscribers only Become a member to get access to all content Subscribe now

> **European gas has found its fear gear again.** **Dutch TTF, the European gas benchmark, smashed through €60 per MWh this week and above the wartime peaks of March, when Iranian missiles were still landing on Ras Laffan.** With the front-month contract flirting with €64, the market is belatedly realising that the Strait of Hormuz will stay shut for far longer than anyone had dared to price (despite ample signs that ceasefire optimism was grossly misplaced). The intractability of the US-Iran war is now plain for all to see, and hedging for peace is losing its allure. Last month’s ceasefire memorandum is a distant memory and indirect talks are going nowhere; Tehran is warning tankers to stick to its designated routes while hulls that stray get hit; Trump is now thirteen consecutive nights into a renewed bombing campaign, and reportedly “close” to a decision on a “massive attack” bigger than anything yet. And he is threatening to flatten a bridge or power plant every time Iran fires on a ship in Hormuz. Iran’s Houthi allies have dragged the Red Sea into the fight, striking Saudi tankers and threatening to blockade Bab al-Mandeb (while letting Chinese and Russian ships slip through). Bellicose rhetoric and vessel strikes are drowning out diplomacy, and Hormuz transits have slowed to a trickle. The consequences are cascading through the gas world: Asian buyers are scrambling to replace lost Qatari and UAE cargoes at premiums $40-50 million per vessel, JKM is defending a fat premium over TTF out to at least Q1 2027, and Europe’s storage injection deficit is widening by the week as EU LNG imports slide. The stage is set for a proper winter tug-of-war between Europe and Asia over every flexible cargo afloat. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Little wonder this week’s subscriber-only Chart Deck reads like a cockpit full of flashing red lights. Our **TTF Sentiment** gauge is firmly bullish, as is the **TTF Risk Model** , with almost every input dropping hard in unison. The **LNG Physical Balance** score spat out a dramatically bullish print of its own. US LNG windfall profits are soaring, and EU gas storages are likely to start winter closer to 70% full than 80%. Signal after signal points the same way — and subscribers can see exactly which levels, spreads and thresholds they translate into. **Download this week’s Chart Deck** PowerPoint (.ppsx) Adobe PDF (.pdf) ### The risk ceiling beckons And yet. Regular readers will recall that last week we flagged investment funds were about to run out of road: our risk-budget maths put their buying ceiling at roughly 248 TWh net long. The latest positioning data landed at 247 TWh. We won’t claim clairvoyance (some of that fit was luck, as explained below) but when a rally’s marginal buyer stops within a rounding error of where your model said they had to, you pay attention. To sharpen that read, this week’s deck rolls out a substantially enhanced Value-at-Risk analysis: a new suite of charts that pulls apart exactly what drives the risk that funds carry in TTF: position, price and volatility. The analysis reveals how close today’s book sits to the levels where position-building has historically stalled. The headline finding: fund risk is now at the 90th percentile, territory that usually precedes a pullback. And the composition of that risk today looks nothing like the March blow-off, which changes what happens next. So: TTF to the moon, or a rally that has quietly eaten its own headroom? Below the paywall we stress-test our ceiling call against the fresh positioning data, show why the exact volatility measure you use matters more than anyone’s view on the war, and set out the precise levels — in TWh and €/MWh — at which the hedge position either finds fresh fuel or buckles under its own weight. On our numbers, the answer to this week’s headline question is closer than the tape suggests. Upgrade to Premium to unlock the downloadable +100-slide Chart Deck and subscriber-only market commentary below. Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs**** 👉 Get in touch 👈 ### This post is for subscribers only Become a member to get access to all content Subscribe now

**Double the contract price, in the middle of a war: that is what it has cost Pakistan to replace lost Qatari LNG cargoes in the spot market this summer to avoid gas shortages.** This week, two fertiliser plants in Pakistan were shut down as part of a government effort to ration gas supplies acutely tightened by the loss of Qatari LNG. Two weeks earlier, Pakistan’s largest gas utility warned state-owned power stations that regasified LNG (RLNG) supplies could not be assured from 14 July to 3 August. QatarEnergy’s force-majeure notice is biting Pakistan hard. Rationing scarce supply is not enough; Doha’s extension of the FM notice amid resumption of hostilities in the US-Israeli war on Iran removed another tranche of contracted cargoes from the South Asian country’s delivery schedule, forcing Pakistan back to the spot market at war prices. Pakistan LNG Limited (PLL) secured a prompt cargo from TotalEnergies on 4 July at $17.37 per million British thermal units (MMBtu), equivalent to a 24% Brent slope at the June 2026 average of $73 per barrel. By comparison, Pakistan’s 2021 Qatar contract at 10.2% of Brent equated to about $7.44/MMBtu before fixed components, while the older 13.37% contract came to approximately $9.75/MMBtu. The pressure is intensifying. Pakistan’s three most recent spot cargoes were purchased at $18.23, $20.70 and $21.88 per MMBtu, representing a combined foreign-exchange outlay of roughly **$195 million**. For perspective, that was more than five times the **$36 million** received by the government as direct cash proceeds from the December 2025 privatisation of Pakistan International Airlines. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## From feast to famine Barely a year ago, Pakistan’s central LNG problem was surplus rather than shortage. Rapid solar PV deployment, weak industrial demand and declining power-sector offtake left gas utilities struggling to absorb contracted volumes. Pakistan arranged to defer or divert most of its Eni cargoes for 2026 and 2027, together with several Qatari cargoes, to alleviate rising financial and operational pressure on the gas network. **Only months later, Pakistan was replacing part of those volumes in the war-disrupted spot market at more than double the price of its cheaper long-term contracts. Demand had become flexible, but the LNG portfolio had not.** Pakistan is now short of deliverable LNG and structurally long on contracted LNG. The paradox captures a wider risk for emerging markets. A state can sign long-term commodity contracts, build terminals and promise demand for decades. But when geopolitics ruptures the market, cargoes still gravitate towards richer buyers with stronger credit. And when domestic consumers later find a cheaper route around the state system, the demand underpinning those contracts can disappear just as quickly. The rapid transformation of Pakistan’s energy complex raises knotty questions about where LNG demand is heading in a key emerging Asian growth market. * How did Pakistan lurch from dialling down contracted volumes to an acute scarcity crisis in the space of barely a year? * Who wins, who loses and who ends up paying when consumers build a parallel power system beyond the grid? * How many LNG cargoes a year is Pakistan’s DIY solar fleet now displacing, and how does that number alter the country’s procurement strategy? * Which of Pakistan’s two large Qatar LNG contracts is worth keeping, and which is the lever for renegotiation or exit? * How big is the cargo surplus Pakistan is forecast to carry through 2031, even if it walks away from its most expensive contract? * What does the LNG paradox mean for the Iran-Pakistan and TAPI pipeline projects that have loomed over Pakistan’s energy strategy for decades? The answers to these pressing questions stretch back through a decade of twists and turns. The lessons therein are a sober warning to LNG industry demand forecasts predicated on rapid growth in fiscally constrained, price-sensitive emerging Asian economies. 💥 _Article stats: 4,000 words, 15-min read time, 2 charts, 1 table_ Upgrade to __Energy Flux__ Premium to unlock the full Deep Dive — including our full displacement methodology, contract economics and pipeline feasibility scorecard. Unlock the Deep Dive 🔓 Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs**** 👉 Get in touch 👈 ### This post is for subscribers only Become a member to get access to all content Subscribe now

## Unserious seriousness **Markets are, finally, looking beyond the clown show. The car with the doors falling off has stopped raising a bonhomie chuckle – not because the blunders have ceased, but because the audience has clocked where the vehicle is heading. And it is not a fun place.** Behind the slapstick sits the strategic incoherence that steered America into this Iran quagmire, and it is the reason there are no palatable off-ramps: by clinging to impossible maximalist war objectives, failing to define achievable outcomes and chronically underestimating its enemy, the Trump administration has painted itself into a corner. The only ways out are further escalation or outright capitulation, and both carry intolerable political costs. Until now, markets were content to hedge on the reasonable assumption that a climbdown was mutually beneficial. The 17 June peace memorandum gave perfect cover for that trade, even though it was always less a peace deal than a Hormuz deal – one that left ‘arrangements’ for safe passage through the Strait dangerously ambiguous, and largely in Tehran’s hands. Its collapse was entirely predictable. Now it is official: Iran’s foreign ministry says it has no plans for negotiations and no longer considers itself bound by the MoU. Hedging for peace no longer makes sense; the relief trade is dead until further notice. Diplomacy has taken the back seat in the clown car. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Guardian of the Strait (just for a day) Nothing better captures the dearth of strategic thinking behind deadly serious events in Hormuz than the transit toll fiasco. On 13 July, Trump proclaimed that America would henceforth be known as ‘THE GUARDIAN OF THE HORMUZ STRAIT’, entitled to a 20% fee on all cargo transiting the waterway it is fighting to reopen. The scheme was unenforceable, in breach of the law of the sea, and demolished Washington’s own case against Iranian tolls – a gift Tehran gleefully accepted, with foreign minister Araghchi purring that Iran ‘has always been the GUARDIAN’ of the Strait and would charge less. Within 24 hours the plan was abandoned, swapped for vague promises of ‘MASSIVE’ Gulf investments into the US: no named countries, no numbers, no documents. Another risible TACO. The clownishness should not obscure the escalation. US forces have now struck Iran for six consecutive days, hitting coastal defence installations from Bushehr to Bandar Abbas, and the naval blockade of Iranian ports was reinstated on 14 July. Iran is answering by striking America’s allies: cruise missiles hit two Emirati tankers in the Strait, killing an Indian seafarer; air-raid sirens sounded over Bahrain and Kuwait; and Jordan intercepted four Iranian missiles entering its airspace. Each rung up the escalation ladder makes a climbdown harder to sell in either capital, and closes off what little remains of America’s exits. ## Chokepoint contagion Nor is Hormuz the only chokepoint under stress. The Houthis have entered the fray, launching reprisal strikes on Saudi Arabia and, per Reuters, deploying missiles and drones near Bab el-Mandeb after Tehran asked the group to prepare to close it. That threatens the safety valve that has kept Gulf barrels moving: some 7.4 million bpd of petroleum transited Bab el-Mandeb in June, up from 4.2 million a year earlier, as exports rerouted around Hormuz via the Red Sea. Meanwhile, Ukraine is rewriting the rules of maritime warfare. Ukrainian drones struck 136 vessels of Russia’s shadow fleet across the Sea of Azov and the Black Sea between 6 and 15 July, including 20 in a single night as the campaign pushed into deeper waters. If this is the model for 21st century warfare, all seaborne commodities will need to contend with a deeply hostile operating environment. Cheap drones have made crippling merchant shipping at scale look routine. Today it is Ukraine hunting Russia’s oil tankers; nothing says the tables won’t be turned tomorrow, with drones of a different allegiance hunting a different class of vessel. The entire architecture of seaborne trade – insurance, crewing, chartering – rests on the assumption that ships are not targets. That assumption is being shredded in the Azov, the Black Sea and the Gulf simultaneously. LNG will not be immune from this paradigmatic shift in operational risk. ## Qatar’s reckoning QatarEnergy has extended force majeure to September for some long-term customers in Europe and Asia, and halted its Ras Laffan mega-expansion project, after the projectile attack that set the laden Al Rekayyat LNG carrier ablaze in the Strait. Even Doha, the most determined optimist in this conflict, is having a reckoning with reality. _Energy Flux_ has consistently held the view that unbridled optimism in Qatar’s ability to restart liquefaction activities and ramp up output, following damage to two of its LNG trains at Ras Laffan, was misplaced. The engineers were never the constraint; the critical path has always been, and remains, the ability to safely and reliably transit Hormuz. Ramping up sent a reassuring message that the market is no longer able to take at face value. Well, those chickens are coming home to roost. ## Captive to the bulls All of which brings us to a European gas market now held captive by bullish sentiment. TTF has smashed through the €50/MWh ceiling that held since late March, and the price action suggests the market no longer treats that level as a ceiling at all. The fuel is a toxic mix: a ballooning EU storage deficit that must be closed at whatever price the market demands, mounting anticipation of resurgent Asian LNG demand competing for the marginal cargo, winter scarcity creeping ever deeper into the curve, and speculative capital redeploying real money into high-conviction length – all of it marinated in a relentless flow of dispiriting wartime headlines from the Middle East. The question that matters now is not whether the bulls are in charge (they are) but how much dry powder remains to stoke the rally higher, and what it would take to force them to back down. This week’s subscriber-only Chart Deck answers both. In this week's Issue This week’s deck runs to 125 slides of proprietary models and vessel-tracking intel. Upgrading to paid unlocks all of it, including: * ****TTF Sentiment Tracker**** – how investment funds and commercial hedgers are positioned after the €50 breakout * ****TTF Value-at-Risk**** – how much risk budget the bulls have left to fuel the rally, and what would force them to fold * ****TTF Risk Model**** – audited, reworked and back-tested this week, and now printing an emphatic new signal * ****The Storage-Speculation Nexus**** – where fund money meets Europe’s restocking task, plus a curious story unfolding in summer 2027 pricing * ****LNG Physical Balance Index**** – our price-gated read on how tight the global LNG market really is * ****Hormuz Closure LNG Supply Impact Model**** – when does new supply finally offset lost Gulf volumes? Three scenarios, out to 2030 * ****Notable vessel movements**** – trapped Qatari carriers, quiet diversions and some eyebrow-raising first voyages Upgrade now to get the full picture, and the tools to build your own scenarios. Unlock the Chart Deck + market analysis 🔓 Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs**** 👉 Get in touch 👈 **Download this week’s Chart Deck** PowerPoint (.ppsx) Adobe PDF (.pdf) ### This post is for subscribers only Become a member to get access to all content Subscribe now

> “After four months of paralysis, the relief is palpable. It may also be misleading. And it is almost certainly temporary.” – Energy Flux, 26 June 2026 **Well, that didn’t last long.** Barely three weeks into a supposed two-month ceasefire, US missiles and Iranian drones are criss-crossing the Persian Gulf again. Iranian railway bridges, merchant vessels, and American military bases in Kuwait and Bahrain were all targeted in the last 48 hours. Donald Trump this week declared the peace memorandum he signed in Versailles as “over”, after Iran struck ships transiting the Strait of Hormuz. Among them was a fully-laden LNG carrier belonging to Nakilat, Qatar’s state-backed shipping company. The _Al Rekayyat_ is awaiting salvage off the Omani coastline after its engine room took a direct hit and caught fire. Risk of explosion is said to be real but low. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Salvaging a bombed-out LNG carrier in an active warzone might prove easier than saving the ill-fated diplomatic process that Trump initiated in the most perfidious manner imaginable. Trust is at rock-bottom, and both sides have diametrically opposed objectives. As _Energy Flux_ has reported previously, whatever the original war aims might have been, the crux of the issue now is _who gets to control the Strait of Hormuz_. Never mind that this is a diminishing asset; the leverage it bestows today is too powerful, too existential, to be relinquished by either side. Neither Washington nor Tehran have the political leeway to soften their red lines nor the means to achieve their maximalist objectives. So they thrash about in pursuit of leverage, any sort of bargaining chip that could give them a negotiating edge. This cynical game locks energy markets into an endless loop of repricing on low-level kinetic exchanges, doveish overtures, uneasy standoffs, hawkish threats and carefully calibrated missile exchanges. The cycle keeps the fear of full-throttle open warfare front and centre without (hopefully) ever pushing the region back into that hellish place. The result is a structural war premium that, in the case of the European gas market, manifests as a €40/MWh floor and €50/MWh ceiling. That ceiling has been tested before, and it held. The front month contract on Dutch TTF, the European gas benchmark, yesterday settled at €50.102 – a seven-week high. With Asian LNG demand showing tentative signs of revival this summer, will it hold again? Can Europe refill its depleted gas storage facilities without triggering an LNG price war? And what about the permabullish investment funds that have the means to propel TTF as high as their conviction takes them? All of these crucial questions and more are addressed in this week’s 125-slide **Chart Deck** and subscriber-only market analysis. 💥 _Article stats: 1,200 words, 5-min reading time, 125-slide downloadable Chart Deck (PDF, PPSX)_ In this week's issue * ****Global Gas & LNG benchmarks**** — How are TTF, JKM and Henry Hub reacting to the latest Hormuz flare-up? * ****TTF Sentiment Tracker & Risk Model**** — Funds are creeping back into length after weeks of selling. Conviction trade, or dead-cat bounce? * ****TTF Value-at-Risk analysis**** — How much risk budget do funds have left to spend, and is the hidden ceiling still €50? * ****The Storage-Speculation Nexus**** — Which contract along the curve are the funds really betting on? (Hint: it’s not the front month.) * ****US-Asia LNG trade dynamics**** — Who is winning the EU-Asia tug-of-war for cargoes? * ****Global LNG flows & supply modelling**** — If Hormuz stays shut, when does the ‘glut’ finally outrun the war? Our model has a date, and it’s further away than you think… Unlock the Chart Deck and market analysis 🔓 Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs**** 👉 Get in touch 👈 ### This post is for subscribers only Become a member to get access to all content Subscribe now

**The economics of gas storage is simple: buy low in summer, sell high in winter to cover your costs, and pocket anything left over. That profit signal, the seasonal spread, determines the pace and volume of injections... except, Europe’s world-beating gas storage capacity has been operating on completely different rules for years now.** The clearest demonstration yet came late last week in the Netherlands. At 13:12 on Friday 3 July, the Dutch competition regulator ACM published a key decision about third-party access to Grijpskerk, one of Western Europe’s largest underground gas stores that has failed to attract capacity bidders in a long-running open season. The ruling barred NAM, the Shell–ExxonMobil joint venture, from making access to Grijpskerk conditional on users contributing to Groningen earthquake liabilities. At 15:40, state-owned Energie Beheer Nederland (EBN) booked the entire 15 TWh on offer and began injecting at around 125 GWh/day. By close of business, NAM had shut the open season. The 2.4 Bcm facility, which accounts for almost 20% of Dutch storage capacity but had sat empty since 1 April, was committed to filling within an afternoon. Note what was absent from that sequence: a price signal. Grijpskerk did not fill because the summer–winter spread suddenly recovered. It filled because regulatory intervention allowed a state company to sign up two hours later. The spread on the day was negative and had been all season. In the regulator’s own words, NAM had reported “no serious interest from the market” in filling the site at any point. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Here’s what it took to change that: an arbitration ruling against Shell and ExxonMobil to force open the neighbouring Norg storage site; two court defeats for NAM in June, plus a binding conduct rule; and a €21.6bn state credit line for EBN to go and buy the gas itself, of which ~€1bn is an outright subsidy the taxpayer will never recover. All of that machinery, to do what the textbook says a positive €2 summer-winter spread would have done on its own. The irony is that the Netherlands is the EU country that originally chose _not_ to mandate storage refilling. It was the flagship of the market-led approach. That country now has all four of its storage sites being filled by the state: Norg since April after an arbitration ruling compelled NAM to open the site; Bergermeer, which the state has backstopped since the 2022 crisis; Alkmaar, where injections into a new 5 TWh state emergency stock began on 30 June; and now Grijpskerk. Meanwhile, the EU’s aggregate fill level crossed 50% on 4 July, a month later than every refill year since 2021, when the crisis-era low pushed the crossing back to 8 July. In the two semi-comfortable years (2023 and 2024), storage never dropped below 50% at all. At 50.4%, Europe is tracking that crisis-era low, with roughly a third of total capacity still to inject before winter, into a forward curve that says storage loses money. At this rate, the _Energy Flux_ EU gas storage model projects a 1 November fill level of 73% under its central case: ## Fighting over the wrong thing The Grijpskerk saga is a microcosm of the wider regulatory mission creep that’s transformed how Europe’s gas storage capacity is managed since 2022, when the loss of Russian pipeline gas put European energy security on a war footing. The regulation that drives the restocking pace (and, by extension, winter price expectations) is due to expire next year. The gas industry is tearing itself apart over what, if anything, should replace it. And all the while, the clock is ticking: whatever replaces the regulation must be legislated before the 2028 filling season, by institutions and stakeholders that struggle to see eye-to-eye. Eurogas, the gas industry trade body, wants the regulation to lapse, arguing that EU filling obligations distort the very price signals that should drive storage. Brussels points the finger at national policies for flattening the summer-winter spread. Some in industry are calling for a strategic reserve or a new scheme to compensate storage for insurance value. The debate centres on ensuring caverns get filled and get paid for services not covered by the market price, while preserving a functioning spread. But here’s the thing: the summer-winter spread, the signal that’s supposedly crucial to Europe’s winter gas restocking effort, **barely matters these days.** New research by _Energy Flux_ reveals how little of Europe’s storage still fills in response to the summer–winter spread. Nine years of facility-level injection data reveal that injections stopped tracking the spread long ago; and the regulatory easing of 2025 exposed what _actually_ fills the tank once the binding EU target is relaxed. ## In this Deep Dive: * How **national policies,** not the market, now refill EU gas storage — and how six divergent national systems drive sharply different outcomes * Whether a **tradeable seasonal price signal** can be revived by deregulating the EU mandate further * Why only 5% of Europe’s storage capacity still responds to the summer–winter spread: a single number that shows **how far policy has displaced the market** * The **relative cost of storing gas** under each member state’s regulatory approach, and who ultimately foots the bill * A short-list of storage companies that **now control Europe’s winter buffer** * An honest examination of a pressing question: **does the row in Brussels over renewing the EU regulation matter at all?** 💥 _Article stats: 6,000 words, 25-min reading time, 5 charts, 1 table_ The received wisdom on gas storage is wrong: the summer-winter spread stopped being the prime incentive for injections years ago. This Deep Dive shows what replaced it: eighteen national policies, mapped against nine years of facility-level injection data, that decide which of Europe****’**** s storage sites fill and which sit empty into winter. If you procure gas for European industry, trade TTF, or manage gas exposure, it names the mechanisms, what each one costs, and the specific facilities where 2026****’**** s refill effort will fail or succeed. Unlock this Deep Dive & dozens more like it 🔓 Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs**** 👉 Get in touch 👈 ### This post is for subscribers only Become a member to get access to all content Subscribe now

✍️ __This is a special guest post by Brussels-based American-European journalist__ Dave Keating **For 80 years, Europe has allowed itself to become dependent on the United States in many different areas, from military defence to economic infrastructure to cultural consumption. But there was one area in which Europe was not US-dependent: energy.** That accolade went to Russia, starting with a series of pipeline deals between Western European countries and the Soviet Union in the 1970s that were meant to diversify supply away from an unstable Middle East. Europe would have happily added energy to its list of US dependencies, but until recently the US did not have the exportable surplus or the technology to get its oil and gas across the Atlantic. But now the shale gas boom, coupled with better technology to liquefy natural gas (LNG), has changed the game. ## Sign up for free to continue reading 💥 Energy Flux 💥 __—__ __fiercely independent energy market analysis__ Subscribe Email sent! Check your inbox to complete your signup. Free newsletter. No spam. Unsubscribe anytime. ### This post is for subscribers only Become a member to get access to all content Subscribe now

**When Iran closed the Strait of Hormuz in March, the global economy almost imploded. On Saturday it closed the strait again, but the tankers kept sailing and markets barely shrugged.** The closure has lost its power to shock. Each threat moves the market less than the last. That decay, the gap between the threat and the reaction, is why any uneasy ceasefire or peace settlement between the US and Iran will be interspersed with periodic bouts of low-level kinetic violence. Iran holds two weapons in the strait. The first is the economic chokehold: the power to throttle a fifth of the world’s seaborne oil and LNG. That weapon is wasting away because buyers are learning to route around it, ration through it, or simply go without. The second is the power to draw blood. That has not faded an inch. On Thursday 25 June, a projectile struck the Singapore-flagged container ship _Ever Lovely_ in the Gulf of Oman, shortly after it cleared the strait. It landed hours after Iran’s Revolutionary Guard warned vessels to keep to Tehran-approved routes or be “dealt with”; after the strike, Iran’s own Strait Authority declared that ships outside its corridor forfeit any guarantee of safe passage. Within hours, the International Maritime Organization froze its attempt to evacuate more than eleven thousand stranded seafarers. Oil jumped nearly two per cent, then handed it all back. Brent and WTI resumed their selloff this morning, crude already trading below where it sat before the war began. A live shooting war. A fresh strike. An evacuation halted. The market’s verdict: keep selling. That is the Hormuz half-life in action. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Warning shot Iran may not have taken responsibility, but let’s get real: yesterday’s strike was deliberate. The _Ever Lovely_ was hit for using the corridor Washington and Oman drew up to bypass Iran’s tollbooth. Tehran is defending the booth by making the alternative lethal to sail along. The US-Iran peace memorandum reopens Hormuz “toll-free for at least 60 days”. That makes the ceasefire a countdown to when the toll comes into effect, and everyone at the table is negotiating who collects it. Iran has already built the booth: a Persian Gulf Strait Authority demanding Tehran-approved insurance and permission to pass, and a plan with Oman to charge for services with “costs associated”. Tehran’s lead negotiator says the waterway will be “administered by the Islamic Republic”. ## Bait and switch Washington’s answer is endlessly contradictory. Marco Rubio, the US Secretary of State touring the Gulf this week, warned that if Iran threatens shipping, “we’re going to have a problem”. A ship was hit before he left the region. Republican Senator and Trump devotee Lindsey Graham went further on Sunday: if the deal fails, America will seize the strait, run it, and charge a fee to cover the cost. President Trump posted the same threat on Truth Social: if no final deal lands in 60 days, the US would impose its own tolls in the strait. The tollbooth Washington bombed Iran to prevent is the tollbooth Washington now wants to run. The fight was never about whether Hormuz becomes a tollbooth. It is about who gets to operate it. Hence the Trump administration’s rhetorical volume. More threats of obliteration, seizure by force, hitting Iran “very hard again”. This is the vocabulary of a side that surrendered its leverage at the table and is trying to win it back from the podium. ## Reaching for the gun The asymmetry is this: America’s threats are spoken into a microphone; Iran’s into a ship’s radio. The day before the _Ever Lovely_ was hit, an Iranian guardsman told a tanker over the airwaves it was “in range of my missiles”. One side talks; the other shoots. American bombast is the sound of an empty hand. Iran’s is not bombast at all, because Tehran needs to shore up its leverage periodically. The reason is simple: the economic chokepoint is a wasting asset. Every closure trains the market to need it less, and the market learns fast. Bypass pipelines are rising in the UAE and Saudi Arabia. Buyer reticence to sign up for Qatari long-term volumes. The reliability premium on seaborne Gulf LNG gone for a generation. Iran can hold Hormuz as long as it likes. It cannot stop Hormuz from mattering less. By the spring of 2028, Hormuz is a tollbooth on a road the energy world has already bypassed. But note where that leaves Tehran. As the economic weapon corrodes, only the physical one remains. Thursday was the preview: when the toll stops paying, the missile is all Iran has left. And the same capacity that struck the _Ever Lovely_ can find the very pipelines built to escape the strait. The toll was always meant to fund the next war, not keep the peace. ## From drought to trickle For now, though, the Hormuz dam is starting to break, even if Thursday showed how fast it can be re-sealed. Kpler logged 52 vessels through the strait on 24 June, the highest count since the war began, as detailed in this week’s subscriber-only **Chart Deck**. Qatari LNG carriers are moving in and out of the Gulf again, some in broad daylight, others switching off their transponders and slipping through dark. After four months of paralysis, the relief is palpable. It may also be misleading. And it is almost certainly temporary. This week’s ****Chart Deck**** and ****subscriber-only analysis**** back up the Hormuz half-life concept with market evidence: vessel-by-vessel transit movements, current global LNG physical balances, knife-edge US LNG arbitrage economics, the 2028 inflection now embedded in JKM and TTF, Europe’s weakening storage trajectory... and the latest Value-at-Risk modelling print that reveals why speculative capital is biding its time. ****The ‘TTF relief trade’ is real. But can it survive winter?**** Click here to find out... ### This post is for subscribers only Become a member to get access to all content Subscribe now

The US and Iran have signed their peace memorandum, and a 60-day clock is now running. I set out my unvarnished view of the deal itself in this week’s Liberatión interview. This is about the narrower question that actually moves gas and LNG prices: the odds that 60 days of talks deliver, and what the answer means for the market. The targets are tough nuts to crack; Iran’s nuclear programme, its missiles, its regional proxies. These are the same questions that have resisted resolution for the 47 years since the Iranian Revolution. Compressing them into a two-month window does not make them easier; it just attaches a deadline. Safe & free passage through Hormuz, meanwhile, is guaranteed for 60 days only. Markets have decided this will work anyway. European gas has handed back most of the war-and-Hormuz risk premium, even though physical flows through the Strait are still a trickle and the supply picture is barely improved. Diplomatically, everything has changed; on the water, almost nothing has. Sentiment has sprinted ahead of reality, and that gap is the story. ## The curve is contorting In EU gas markets, the repricing has bent the forward curve into shapes that do not quite add up: the front-month signal points one way while the contracts that actually move cargoes point the other. Read the right contract and the picture is far more coherent than the headline spread suggests. Measuring that gap, precisely, is what this week’s Chart Deck is built to do. ## What the deck shows Six proprietary models anchor this week’s 121-slide edition, all circling one core question: how far has sentiment run ahead of the fundamentals? * **TTF Sentiment Tracker:** how investment funds and commercials are positioned, and how hard the funds have leaned into the sell-off. * **TTF Risk Model:** what our composite score reads now that bearish positioning is overpowering tight physical fundamentals. * **TTF Value-at-Risk:** how much risk budget the funds are burning to hold the line, and what last week’s volatility did to it. * **EU gas storage refill projections:** our 1 November fill-level scenarios, and why they leave winter risk looking under-priced. * **FOB netbacks:** why the TTF sell-off has, counter-intuitively, improved the economics of pulling LNG cargoes to Europe. * **Hormuz Closure LNG Supply Impact Model:** model the MoU’s own timelines, from an ambitious 80%-in-30-days reopening to slower and more realistic paths, and what each does to global supply out to 2029. 💥 **_Article stats: 1,000 words, 121 slides (PDF / PPSX download)_** ****Not yet a subscriber?**** The markets have moved on from Hormuz. The ships have not. Subscribe to __Energy Flux__ for the full 120-slide Chart Deck and the analysis below: the positioning data, the storage maths, and why the headline gas spread is misleading. Unlock the Chart Deck and proprietary analysis 🔓 ### This post is for subscribers only Become a member to get access to all content Subscribe now

I was interviewed by French broadsheet newspaper Liberatión earlier this week about the US-Iran peace accord. I spoke with their international affairs correspondent Isabelle Hanne on Monday, before the full text of the memorandum was released, based on widespread reports of what was anticipated. We now know what the Trump administration has since agreed to, and it only strengthens my conviction that this ‘deal’ represents the most humiliating and catastrophic capitulation in US foreign policy history… or at the very least, in 47 years of negotiations with the Islamic Republic of Iran. Liberatión have kindly allowed me to reproduce the Q&A in full on these pages. For the Francophones, the original (in French) is here. I have appended some details on what is actually included in the text of the deal in the post-script. ## Sign up for free to continue reading 💥 Energy Flux 💥 __—__ __fiercely independent energy market analysis__ Subscribe Email sent! Check your inbox to complete your signup. Free newsletter. No spam. Unsubscribe anytime. ### This post is for subscribers only Become a member to get access to all content Subscribe now

**Europe’s simmering gas storage debate has broken out into an open fight.** Eurogas, the trade body representing Europe’s gas wholesale, retail and distribution sector, issued a new position paper this week calling for the current EU Gas Storage Regulation to expire in December 2027. Its message is blunt: the 90% mandatory filling target was a crisis tool, not a sustainable market design. “Eurogas therefore does not support prolonging the current Gas Storage Regulation beyond its expiry in December 2027,” the group said. Storage bookings, injections and withdrawals should “in principle be based on price signals,” with intervention reserved for sustained or systemic security-of-supply risks that markets cannot handle. That puts Eurogas at odds with Gas Infrastructure Europe, the infrastructure lobby representing gas storage operators, LNG terminal operators and transmission system operators. GIE argued in March that “market signals alone may not adequately remunerate the system-wide insurance value of gas storage.” Its position paper called for mandatory or incentivised filling measures beyond 2027, mechanisms to capture storage’s insurance value, and redesigned cost-sharing to reflect the EU-wide value of storage during crises. And then there is Gasunie Transport Services, the Dutch transmission system operator, which comes at the question from a different angle. GTS is less focused on routine seasonal filling than on prolonged physical disruption. Its own March report warned: > _“The EU is not sufficiently prepared for a prolonged disruption of natural gas supplies.”_ Citing ENTSOG calculations, GTS said a six-month disruption could leave a supply shortfall of roughly 500 TWh at EU level. Its answer is an emergency gas reserve in existing storage facilities, using working gas volumes and, potentially, cushion gas. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. The European Commission sits awkwardly between these positions. Its Gas Market Task Force warned recently that storage obligations implemented without sufficient hedging can amplify price pressure in gas markets. In plain English: badly designed refill rules can become self-defeating. A policy created to secure winter supply can end up distorting the very price signals needed to refill storage efficiently. The timing matters. The Eurogas paper lands as Brussels is already reviewing the EU’s wider energy security framework, including the future of gas storage regulation after 2027. Officials are weighing whether filling targets should apply differently across member states, and whether they should be based on gas consumption rather than storage capacity. The updated framework is expected after the summer. This is no longer a tidy Brussels policy argument. It is an industry split, landing in the middle of a live refill problem and just weeks before the Commission shows its hand. Europe’s gas stores are around 45% full in mid-June, below the crisis summer of 2022 and well beneath the five-year seasonal norm. Injection economics remain weak. Winter risk is visible. The market signal is muddled. And now the sector itself is split over what should happen next. Eurogas wants market discipline restored. GIE wants storage’s insurance value paid for. GTS wants emergency cover against physical rupture. The Commission wants rules that do not break the very market it is trying to save. They cannot all be right. But nor are they all wrong. The storage debate keeps misfiring because it treats gas storage as a special asset class, rather than a bundle of distinct services. Energy security does not require Europe to choose between blind faith in the market and permanent protection for asset owners. That is a false choice. The better starting point is the consumer. What service is being bought? What risk does it reduce? Does it cut cost, carbon and physical exposure? And could another resource provide the same service more cheaply, cleanly or reliably? That is where _Energy Flux_ parts company with the usual debate. Storage has several distinct jobs, and each needs a different instrument. Market signals matter, but they are not sacred, and intervention need not be taboo. It just has to be precise, competitive and tied to the service consumers actually need. The full piece below examines why the forward curve market signal is useful but incomplete, the strengths and weaknesses of each position paper, and why Europe needs a more sophisticated regime than either pure market faith or broad asset protection. 💥 _Article stats: 3,600 words, 3 charts, 14-min reading time_ 💡 Don't be left in the dark. Get the full analysis to understand where the gas storage debate is heading, and where it risks veering off course. Unlock this Deep Dive and hundreds of others with one click 🔓 ### This post is for subscribers only Become a member to get access to all content Subscribe now

**Energy prices are selling off hard this morning after a tumultuous weekend of headlines that culminated, against the odds, with the US and Iran apparently agreeing to a high-level framework agreement to end hostilities and re-open the Strait of Hormuz.** Dutch TTF, the EU natural gas benchmark, opened at an eight-week low of €44/MWh, down about 5% on Friday’s close. Energy markets, ever desperate to price in the peace story, are taking President Trump’s pronouncements at face value. Source: ICE Endex Overnight, Trump declared the US–Iran deal “complete” and proclaimed a toll-free reopening of the Strait and the removal of the US naval blockade. Pakistan, which has mediated throughout, said a deal had been reached. Iran’s Deputy ⁠Foreign ⁠Minister ‌Kazem Gharibabdi reportedly confirmed “a permanent and immediate end to the war on all fronts, including Lebanon”. An official signing is slated for Friday 19 June in Geneva, after this week’s G7 meeting in Evian, Switzerland. Those are the headlines. The substance is thinner. No text has been published, and the hardest questions – Iran’s nuclear programme, the uranium stockpile, funding of regional proxies, and the wider sanctions regime – are all pushed into a 60-day negotiation that has not yet begun. "The narrative war is only just beginning." - Watch on YouTube I outlined the gap between the market’s optimism and the physical reality on Al Jazeera late last night; the clip is above (or watch on YouTube here). Three main things are not settled: 1. Whether Iran has really given up control of the Strait 2. How quickly mines can be cleared from Hormuz 3. Whether any eventual deal survives contact with reality The longer version is below (~1,000 words). Bottom line: the narrative war is just getting started. Beware who you choose to believe. ### This post is for subscribers only Become a member to get access to all content Subscribe now

One hour. That’s roughly the window between Donald Trump posting on 11 June that the US would hit Iran “VERY HARD TONIGHT” and soon seize Kharg Island, and the US president phoning Fox & Friends to muse that he didn’t think America “has the stomach for it”. Same morning, same news cycle. The threat and its own retraction, filed almost simultaneously, as though conviction were just another thing to be A/B-tested in real time. By the afternoon he’d formally cancelled the strike and was selling a “great settlement” instead. Fighter jets were reportedly still circling near southern Iran in anticipation of the strike signal while Trump was talking up some fantastical peace deal signing ceremony that won’t happen in Europe this weekend. The market, as ever, did exactly as it was told. TTF dropped 4% to hit intra-day lows of ~€47/MWh, its lowest price in weeks. Brent shed 3% to settle at $90.38, then kept sliding to $89.15 after hours. WTI slid 2%. A collective exhale, priced to the decimal, in dutiful response to a man who had that very morning argued both sides of his own war before most of Europe had finished lunch. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Here’s the thing about being played: it only works if you keep showing up to play. The EU gas market has ridden this exact rollercoaster since late February, through the 8 April ceasefire that wasn’t, the 12 April blockade, the May tolling theatre, the 48-hour ‘Project Freedom’ debacle, and three separate Kharg Island threats. Yet the price-makers keep showing up. Every time. Selling the de-escalation, buying the flare-up, selling the de-escalation again, as though the last umpteen iterations never happened. There is no peace process. There is a feed, a president who knows his words move trillions of dollars of capital, and a market that keeps mistaking his mood swings for news. And the people moving real money through European gas hubs are treating each press conference word salad as though it carries the weight of a signed treaty. Except, increasingly, it isn’t people at all. The AI-driven algo trading systems that now set the intraday tempo on TTF and NBP swallow each Truth Social post whole and price it in milliseconds. Critical thinking is outsourced to code that cannot tell a negotiating bluff from a documented lie, and was never built to ask. The machine reads “peace settlement imminent”, matches it to a direction, and fires. We are told that the trading smarter systems are calibrated to down-weight or delay reactions to actors who play fast and loose with the facts. But watching prices move in real-time as the empty words spill out of this man’s mouth, there is little reason to believe any of it. But that is how energy markets operate in 2026. And so it is incumbent upon analysts to accept this reality and weigh up the implications. And the implications are genuinely interesting; not least because yesterday’s artificially-induced selloff on TTF in response to the latest ‘Iran peace’ theatrics exacerbate the more structural movements that will define market direction and momentum over the rest of summer and beyond. This week’s Chart Deck follows the money, the molecules and the margins shaping the next phase of the summer EU gas market and global LNG trade. It traces the financial flows, risk budgets, trade dynamics and arbitrage economics that will decide who secures the marginal cargo — and who gets priced out. Paid subscribers get the full 115-slide Chart Deck, plus a detailed market overview tying the data into a coherent view of EU gas risk. Every claim is backed by the charts. Upgrade to Premium to unlock the full Chart Deck and subscriber-only analysis. Upgrade to Premium to unlock the full Chart Deck and subscriber-only analysis 🔓 ### This post is for subscribers only Become a member to get access to all content Subscribe now

European gas prices have spent the Hormuz crisis pressing against an invisible cap. Each escalation lifted the market, but not far enough. Dutch TTF, the European benchmark, kept returning to the same awkward line around €50/MWh. The cap was not physical supply; it was financial positioning. Investment funds built a huge bullish bet as the crisis intensified. Then volatility surged, making that bet more expensive to hold in risk terms. The funds still had reasons to be bullish, but less room to buy more. That was the hidden ceiling. Bullish news could lift prices, but the marginal long buyer had already spent too much of its risk budget to chase the move. Through April and May, that helped explain why TTF struggled to break durably above €50/MWh, even as Hormuz disruption kept the physical risk alive. Now that constraint has eased. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. The latest ICE Endex data, for the week ending 29 May, shows how far the reset has gone. Fund risk consumption on our main 20-day measure has fallen to €374m, down 82% from the late-March peak of €2.07bn. For the first time since the US–Iran war erupted in February, implied value-at-risk (VaR) is back below the €418 million mark that defines the top decile of the 2019–26 distribution. __Room for manoeuvre: risk budgets are back below pre-war levels__ That matters for what it removes. The old ceiling was hard because funds were already stretched. This one is softer. The bulls have their ammunition back. They are just not firing. So why is TTF still capped around €50/MWh, pulling back at this price point even as renewed Iranian strikes on Gulf targets put Hormuz risk front and centre of energy market sentiment? The full weekly Chart Deck below traces the €50 ceiling through the CoT data, the TTF Risk Model and the global LNG physical balance. Paid subscribers get 100+ slides mapping the pressure points across European gas and LNG markets, plus the subscriber-only analysis that turns the charts into a coherent market view. The ceiling has not vanished; it has changed shape. Get the full picture 👇 Unlock the Chart Deck + analysis 🔓 ### This post is for subscribers only Become a member to get access to all content Subscribe now

**Brussels’ Gas Market Task Force says algorithmic and AI-driven trading now dominates natural gas benchmarks. The EU Commission wants regulators to watch it more closely, without reining it in.** The Gas Market Task Force (GMTF), created by the European Commission in February 2025, published its findings on 1 June. The body brings together Commission departments DG COMP, DG ENER, DG FISMA and DG CLIMA with pan-EU energy regulator agency ACER and market watchdog ESMA. **Main finding:** The report singles out algorithmic trading as a structural feature of EU gas markets that warrants ongoing scrutiny. “Algorithmic trading is widely used by most (if not all) market participants in spot gas and gas derivatives markets in the EU,” it states, noting it “has become the prevalent form of trading in key gas benchmarks.” **Why it matters:** Algos are now woven into price formation on the TTF, Europe’s gas benchmark and an increasingly global reference. How they behave under stress shapes what consumers and industry ultimately pay. **The risks, as the GMTF frames them** , fall into three buckets: ✍️ Sign up for free to continue reading... Register for free ### This post is for subscribers only Become a member to get access to all content Subscribe now

**The European gas market is not ignoring the de-facto closure of the Strait of Hormuz. It is doing something stranger: pricing a high-confidence bet that the chokepoint will substantially reopen before the disruption does lasting damage.** The disconnect between commodity pricing and Hormuz vessel movements has been visible for months. The harder question is how wayward the market’s bet on a swift resolution has become. In natural gas, how much assumed Hormuz recovery is implicitly priced into front-month TTF, Europe’s benchmark contract? How much missing LNG is the market effectively assuming will return? And how far would TTF have to re-rate if that assumption breaks? _Energy Flux_ has built a new interactive framework to answer those questions. The **TTF Hormuz Pricing Model** back-solves the amount of Hormuz LNG throughput implied by the TTF price, then shows how that implied belief has moved since the waterway was operationally closed. The model rests on two user-defined bookends: one fair-value TTF price for durable reopening, and another for sustained closure. It does not tell you what to believe. It shows you what the price requires you to believe, based on your own assumptions. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Under _Energy Flux’s_ default settings, the result is stark: front-month TTF is priced as if the vast majority of pre-war Hormuz LNG flow is still economically available to the market, even though observed transit is running at barely 2–3% of normal. The implied figure has varied since the outbreak of hostilities, but it has consistently sat far above the amount of LNG physically moving through the Strait. Only seven laden LNG vessels have crossed Hormuz east since the war began on 28 February 2026, against a pre-war pace of around one hundred a month from Qatar and the UAE combined. There is little movement, and scant volume. The geopolitical signal is just as confused. Washington is briefing progress towards a ceasefire extension, de-mining and a reopening of commercial traffic. At the same time, US forces this week resumed striking targets in southern Iran. ## The peso problem So, which is it? Are we days away from a comprehensive deal that reopens the Strait? Or one direct drone strike away from a wider war that closes Hormuz indefinitely? The honest answer is: both, simultaneously. TTF cannot price them separately, so it blends them into a single number. That number looks precise. But it does not correspond to a plausible physical state of Hormuz transits. That is the ‘peso problem’ in textbook form. When traders face binary outcomes with uncertain timing, the equilibrium price becomes a probability-weighted blend of two bookends. It looks logical. It is actually a compressed spring. The TTF front-month is currently trading around €47/MWh. That price sits somewhere between ‘Hormuz reopens tomorrow’ fair value and ‘Hormuz remains closed indefinitely’ fair value. Where it sits between those bookends reveals the market’s implied bet on resolution. The full model below lets subscribers put a number on that wager. It back-solves the Hormuz LNG flow implied by the TTF price, compares it with observed vessel transit, and translates the gap into tonnes per week of missing supply. Move the reopening and closure bookends, test your own fair-value assumptions, and see exactly how much phantom LNG is embedded in the current price. 💥 _Article stats: 3,000 words, 12-min reading time, 2 charts, 1 interactive data model_ Need access? Unlock the Deep Dive + interactive model 🔓 ### This post is for subscribers only Become a member to get access to all content Subscribe now

**Dutch TTF, the EU gas price benchmark, has settled into an uneasy equilibrium below €50/MWh. But Asian LNG prices are floating well above that, pulling flexible Atlantic cargoes east at the precise moment Europe needs stronger summer inflows.** That is the problem now taking shape in the gas market. Europe needs sustained LNG imports to rebuild depleted storage before winter. But the two price signals that normally support that trade — inter-basin netbacks and seasonal storage spreads — have both moved against it. The market has found a price. It has not found a balance. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Across the _Energy Flux_ Chart Deck’s core models, the same pattern keeps showing up: Europe’s gas market is balanced only in the narrowest, most unstable sense. Flexible Atlantic LNG is chasing better returns elsewhere. Storage injections are falling behind. Funds are already heavily bullish, but the new **Value-at-Risk** framework suggests their ability to add more length is still close to exhausted. TTF is sitting below €50/MWh, not because the market is relaxed but because physical stress is building faster than financial positioning can respond. This week’s newly expanded **Chart Deck** tracks that setup through ten proprietary sections, including: * The **TTF Risk Model** , and what it says about Europe’s deteriorating storage outlook * The **LNG Physical Balance Index** , and why recent slack-market readings may be less reassuring than they look * The **TTF Sentiment Tracker** , and how investment funds are positioned as winter risk builds * The new **TTF Value-at-Risk framework** , which gives a risk-adjusted readout of fund exposure and helps explain why TTF keeps stalling below €50/MWh * The new _Energy Flux_**EU Gas Storage Refill Projection** shows the refill level most likely on 1 November, and at what cost * The **Storage-Speculation Nexus** , showing where funds are placing their bets on the TTF forward curve, and how that intersects with Europe’s restocking scramble * **US LNG diversion patterns** , including why the Panama Canal has fallen out of favour * The rising replacement cost of **lost Qatari oil-indexed LNG** , and what that means for the relative attractiveness of US Henry Hub cost-plus supply ****Behind the paywall:**** 113 slides across ten proprietary sections. 2,000 word deep analytical take on the charts & data points that matter most. One coherent read on the post-Hormuz LNG market Not yet subscribed? Upgrade to unlock every slide, model and signal Unlock the Chart Deck 🔓 **Download this week’s Chart Deck** PowerPoint (.ppsx) Adobe PDF (.pdf) ### This post is for subscribers only Become a member to get access to all content Subscribe now

I sat down with _Energy Flux_ podcast partner Victor Ponsford yesterday to discuss stalled US-Iran diplomacy, the implications of differing Hormuz reopening scenarios, natural gas price volatility, energy market manipulation, and the outlook for next winter and beyond. The result was another wide-ranging conversation about ballooning winter risk for the EU natural gas market, the endless debate on the economics of refilling EU gas storage, and the rising stakes of Middle East energy brinkmanship. ✍️ Sign up for free to continue reading... Sign up ### This post is for subscribers only Become a member to get access to all content Subscribe now

**European gas prices are pushing towards their highest level of May. Dutch TTF has spent the past month trapped in a narrow range, held between a war-premium floor and a Hormuz normalisation ceiling. That ceiling is about to be tested.** A handful of stranded LNG cargoes have made it through the Strait of Hormuz. But they did not transit under anything resembling normal conditions. They sailed ‘in the dark’ with AIS transponders switched off, and reportedly after the governments of China and Pakistan each negotiated safe passage with Iran’s Revolutionary Guard Corps. This is not what normalisation looks like. Rather, as Tehran seeks to cement its sovereignty over the contested waterway, we are witnessing the birth of a new normal: a permission-based regime for Middle East oil and LNG exports. Hormuz is Tehran’s ‘trump card’ and they are playing it to maximum effect. Constraining the supply of energy and critical feedstock to global markets is proving far more effective than empty nuclear threats ever could have. Washington is trapped between escalation and retreat, unable to stomach the political costs implicit in pursuing regime change, and unable to deliver a decisive outcome by blockading Iranian ports. That matters for gas because a prolonged stalemate is more damaging than a short closure and spectacular military-backed reopening. A semi-official, legally questionable permission-based transit system is awkward. It keeps the risk premium alive while demanding constant repricing across LNG flows, inter-basin spreads, European storage economics and fund positioning — all against a backdrop of acute information asymmetry. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Charting the change The prospect of a hardening stalemate poses multifaceted implications for global gas and LNG markets. This week’s subscriber-only Chart Deck tracks the moving parts: TTF sentiment, fund positioning, inter-basin arbitrage, LNG flows and physical balances. JKM has opened a premium over TTF that is now wide enough to pull marginal LNG cargoes east. The second cargo from the newly operational Golden Pass project in Texas has already diverted from Europe to Asia, a timely reminder that Europe’s growing reliance on flexible US LNG cuts both ways when Asian netbacks improve. But this is not a simple ‘bullish Asia’ story. Demand is being destroyed fast enough to offset some of the lost Middle East supply. China, Japan and South Asian buyers are all pulling back, and the _Energy Flux_ **LNG Physical Balance Index** just printed its first slack-market reading since hostilities began. That signal feeds directly into the **TTF Risk Model** , which has moderated its bullish-underpriced score even as the geopolitical setup remains supportive. The financial market is telling the same story in a different language. Hedge funds reverted to long-selling last week, reinforcing the argument that extreme volatility is capping fund risk appetite despite the bullish setup on TTF. The **TTF Sentiment Tracker** backs this up, with the latest snapshot of fund positioning. Meanwhile, the **Storage-Speculation Nexus** regression model shows fund activity concentrated in winter 2026 contracts, where Europe’s depleted storage buffer and weak injection rates create a clear opportunity. With Dec-26 TTF trading at almost €2/MWh below the front month, the winter long trade has an exceptionally clean narrative tailwind. Dutch gas network operator Gasunie this week sounded the alarm, calling for gas storage subsidies to avert a winter supply crunch. German utility RWE chimed in, calling for a strategic gas reserve. These measures would dramatically alter how 2026 plays out. But is there political appetite to pursue them? If Europe fails to build an adequate storage buffer over summer, those calls will intensify. Policymakers may take succour from the fact that demand destruction and new supply will eventually flip the narrative. But time is not on their side. For now, the market is pricing a simpler problem: Europe needs optionality, and it has less of it than it thinks. **Seb Kennedy | Energy Flux | 15 May 2026** The data behind the headline story is laid out in full in the subscriber-only ****Chart Deck****. Hormuz risk is keeping the war premium alive, Asian netbacks are pulling marginal LNG east, demand destruction is moving fast, hedge funds are cutting longs, and Europe’s refill rates are falling short. The ****Chart Deck**** connects these moving parts with 100+ slides of price, flow, positioning, storage and proprietary model data tying it all together. Upgrade to Premium to download the full Chart Deck and see what the market is really pricing. Unlock the Chart Deck 🔓 ### This post is for subscribers only Become a member to get access to all content Subscribe now

> In late March, hedge funds built their biggest net long position in TTF history. Then, with war still raging and the bullish case for gas still intact, they began to cut it back. That contradiction is the starting point of this piece, and it points to something the headline positioning data cannot see: a hidden brake in the mechanics of the EU gas market. ## The wall that won’t break **On 27 March 2026, investment funds’ aggregate net long position in ICE Endex TTF reached a new all-time record 323 TWh, with a face value of almost €18 billion. It was the largest fund long in the contract’s history, surpassing even the run-up to the 2022 crisis.** The backdrop appeared to support it. Since the US-Iran war broke out on 28 February, the Strait of Hormuz has been closed for more than two months, disrupting a route that normally carries around a fifth of global seaborne liquefied natural gas (LNG). But then, TTF stalled. The front-month price peaked at €61.50/MWh on 19 March before falling back to around €43/MWh by 6-7 May. TTF has traded mostly within a €40-€50/MWh range since early April despite a shock that, by historical comparison, should have produced a fresh leg higher. At the same time, funds trimmed their long position. By the week ending 1 May, net length had fallen to 289 TWh, or €13 billion face value: down from the March extreme, though still high by any historical standard. The puzzle is not why funds went long. It is why a record fund long, set against a still-powerful bullish backdrop, peaked and then pulled back without lifting TTF to new highs. This **Deep Dive** examines one explanation that has received little attention: that fund positioning may itself have become a constraint on further upside. ## What a fund actually buys Most readers will know the weekly ICE Endex CoT report, which shows how different trader groups are positioned in TTF gas futures. The usual reading is straightforward: if funds are heavily net long, they are positioned for higher prices; if they are net short, they are betting on lower prices. Bigger net length usually implies stronger bullish conviction. That is useful, but only up to a point. For many funds, the real constraint is not just how big a position is on paper, but how much risk it carries. And that depends not only on size, but on **volatility**. A futures position does not consume cash in the way a stock purchase would. Futures are margined: the buyer puts up only a fraction of the position’s face value as collateral. That face value — the quantity of gas covered by the contract multiplied by the current price — is called the **notional**. It is the headline size of the bet. The **margin** is simply the cash needed to keep it alive. But for many funds, the binding constraint is not margin or notional. It is **risk budget** : the amount of loss the fund is prepared, or permitted, to absorb if the market turns against its position. That is where **VaR** , or **value at risk** , comes in. In plain English, VaR is a way of estimating how much a position could lose over a normal bad trading day, given both its size and the market’s volatility. A long TTF position of 100 MWh in a quiet market might look identical on paper to a 100 MWh long TTF position in a volatile market. In risk terms, they are very different. The same position can be much harder to hold when volatility jumps. In that environment, funds may trim length not because their view has changed, but because the position’s VaR exceeds internal limits. The CoT report shows the size of the position. It does not show how expensive that position is to carry. This special **Deep Dive** is an exercise in re-expressing the European gas market in risk-adjusted terms: quantifying the VaR that investment fund positioning actually consumes, not just what its face value reads. It applies a proxy measure for volatility to the entire ICE Endex TTF CoT data set to identify distinct risk regimes since 2019. The findings help to solve the central puzzle of spring 2026: why TTF appeared to hit a ceiling even as an historic LNG supply shock kept the case for higher prices alive. It explores a plausible explanation that has been largely missing from the debate: that speculative fund positioning had become so risk-heavy that it could no longer keep driving prices higher, and what that means for the EU gas market as the Hormuz crisis drags on. **💥 _Article stats:__6,000 words, 20-min reading time, 16 charts & graphs_** __Below this line is the full risk-adjusted view of TTF set against seven years of positioning data.__ __The framework combines weekly CoT exposure with realised volatility to build a simple proxy for VaR across price regimes: how much risk funds were likely carrying during and after Covid, Russia-Ukraine, and now in the midst of the US-Iran stalemate.__ __This approach sheds new light on the European gas market in 2026: from net short in January, to a record fund long in March, to active trimming even as the crisis endured. The goal is to understand why TTF has struggled to break €50/MWh despite a still-bullish backdrop, and what would need to change for that ceiling to be breached.__ __Subscribers get the full set of charts, methodology, caveats, and forward-looking conclusions that could fundamentally alter how you read the European gas market.__ Unlock the Deep Dive: upgrade to Premium 🔓 ### This post is for subscribers only Become a member to get access to all content Subscribe now

✍️ __This is a special guest post co-authored by__ Gareth Miller__and__ Seb Kennedy #### Article summary 🔽 * ****A sharper shock than 2022.**** Practically zero LNG has transited Hormuz since 1 March, 15 Mt lost in two months; a faster run rate than 2022’s Russia shock. * ****Oil’s cushion is more theoretical than real.**** Over 10 mb/d is off the market; SPR releases buy short-term relief but bake in future fragility. * ****Reopening is the whole game.**** Five-year cumulative LNG net loss runs to 30–120 Mt depending on transit recovery speed. Even a deal tomorrow takes months to restore flows. * ****Four big obstacles stand in the way.**** Safety, Sovereignty, Strikes, Statecraft — each one renders Hormuz transit normalisation impossible. **The conflict between Iran and the US flared up again this week, convulsing oil and gas markets in a fresh spasm of price inflation. Both sides are engaged in controlled provocation and limited escalation in an attempt to extract leverage from economic warfare, with little regard for collateral damage.** The continued closure of the Strait of Hormuz is tearing a deep rift in global supply chains that will take many months to heal. The US-led military interventions Operations Epic Fury, Economic Fury, and Project Freedom now run concurrently, chaotically, and without an obvious strategic rationale. The initial “four-week excursion” has metastasised into ten weeks of damaging and costly stalemate. President Trump last night abruptly paused Project Freedom, the short-lived initiative to escort commercial ships through Hormuz, just hours after it began. But the US blockade of the Strait continues, and a diplomatic breakthrough does not appear imminent. Meanwhile, every day that passes, the economic chasm widens. ## Sign up for free to continue reading 💥 Energy Flux 💥 __—__ __fiercely independent energy market analysis__ Subscribe Email sent! Check your inbox to complete your signup. Free newsletter. No spam. Unsubscribe anytime. ### This post is for subscribers only Become a member to get access to all content Subscribe now

**The European natural gas market is facing a contradictory reality from prolonged closure of the Strait of Hormuz.** A months-long closure of this vital LNG export route presents asymmetric upside risk to gas markets throughout 2026, and probably well into 2027. But it is a double-edged sword. The longer commercial traffic is disrupted, the deeper the demand destruction it will precipitate in emerging Asian markets that were supposed to soak up the wave of new LNG supply that will hit the market later this decade. Near-term price risk is skewed to the upside, supporting a bullish 2026-27 thesis. Further out, the picture becomes far less clear. The potential for the gas narrative to shift abruptly from wartime scarcity to a regime of structural excess rises every day that Hormuz is shut. The key variables are the duration of closure and speed of normalisation. A quick reopening and lasting diplomatic solution would dull both near-term scarcity-driven volatility _and_ the tail risk of a macroeconomic shock, global recession and a rapid loosening in physical market balances. But hopes of that optimistic scenario materialising are rapidly fading, as both sides in the US-Iran conflict dig in for a bruising war of economic attrition. This week’s downloadable 100-slide**Chart Deck** is littered with evidence that Dutch TTF, the European gas benchmark, is starting to price in a ‘whipsaw scenario’: acute physical shortage fuelling volatility into next winter and beyond, followed – at some point – by a sudden reversal of conditions that could be almost as dramatic as the war itself. Let’s dive in. _****Inside this week’s Chart Deck:****_ __A tour through the TTF forward curve’s split personality (___****slides 17–19****_ __)__ __The__ _****TTF Sentiment Tracker****_ __,___****Risk Model****_ __and__ _****Storage-Speculation Nexus****_ __showing funds locking in front-end length but quietly cooling on the 2028 trade (___****slides 21–43****_ __)__ __The oil-vs-spot and US-vs-oil-indexed economics that are reshaping Asian procurement (___****slides 53–58****_ __)__ __How reshaped global LNG flows are absorbing the loss of Hormuz transits (___****slides 75–96****_ __)__ __Europe’s storage refill progress, injection rates vs seasonal norms, and how compressed spreads make it that bit harder (___****slides 15-16, 48-51****_ __)__ __The first LNG vessels to transit the Strait, and full inventory of all Hormuz transits (___****slides 76-81****_ __)__ Unlock the Chart Deck 🔓 + full analysis ### This post is for subscribers only Become a member to get access to all content Subscribe now

Yesterday, Pakistan issued its first spot tender since December 2023. Pakistan LNG Limited wants three cargoes of approximately 140,000 m³ each, delivery at Port Qasim between 27 April and 14 May. Bids close today. Pakistan went twenty-eight months without touching the spot market. It didn’t just sit it out; through 2024 and 2025 it was actively trying to offload LNG it didn’t need. Now, it does. A consumer-driven >30 GW rooftop solar boom, the largest build-out relative to grid size of any country, knocked 11% off grid demand, stranding long-term obligations that had been sized for a very different energy scenario. Islamabad deferred five Qatari cargoes from 2025 into 2026, cancelled 21 Eni cargoes outright, and began reselling excess volume into regional markets on a Net Proceeds Differential basis, i.e. swallowing the risk of loss. As recently as mid-March, per IEEFA, Qatari- and Eni-contracted cargoes were still being diverted for 2026-27. In other words: a few weeks ago, Pakistan was a seller. This week it is a buyer. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. The reversal has been driven by a heatwave expected to persist into May, a 4.5 GW electricity deficit, and widespread blackouts in recent weeks. Energy Minister Awais Leghari told Reuters the government is “not sure when it will get more cargoes from Qatar”. Pakistan’s Power Division had initially requested four emergency cargoes; PLL is tendering for three. This is not an isolated event. It is the latest data point in a pattern that has been building since Qatar declared force majeure on 4 March. Bangladesh broke first, and paid accordingly. Egypt is running a $5.4 billion tender on six-month deferred payment terms. Across South Asia, the real cost of the Hormuz closure is not just showing up only in LNG headlines; it is showing up in LPG shortages, rolling outages, and the first cracks in a fertiliser-to-harvest chain that is moving from theoretical risk to visible reality. With Hormuz firmly shut, the global LNG market is being held in uneasy balance by the accumulated decisions of the most price-sensitive buyers in Asia to go without. Year-to-date (YTD) import data tells the story: with South Asian imports are down -1.2 Mt, net global balance tipped into deficit only because Europe pulled an extra +4.3 Mt of LNG toward itself. Just like in 2022, poorer economies bear the cost of balancing a war-shocked market. The demand destruction mechanism is finite, but Europe’s TTF gas market is trading as if Asia can keep shielding European consumers from scarcity forever. Front-month TTF sits at €45/MWh ($15.50/MMBtu), still well below its early-March spike to €62 ($21). Hedge funds are cautiously unwinding a 323 TWh record net long — itself the consequence of the biggest weekly short-cover in recorded TTF futures history. The forward curve is flat through summer 2027 and sloping toward sub-$10/MMBtu by 2028. Summer-winter spreads are inverted: the market is actively discouraging storage injections at a moment when EU storage sits around 30% full, roughly 10 percentage points below the seasonal average. This is not a market pricing a war. It is a market pricing a consensus that the war will soon end. The data suggest this is a potentially catastrophic misreading of the situation. ****The rest of this letter is for paying subscribers.**** Below the paywall: a 2,000-word analysis backed up by 100 data-rich slides in the downloadable Chart Deck. * ****The force majeure cascade**** — why the ‘oil-indexed insulation’ story is structurally wrong and how utility books in Japan and Korea are quietly exposed * ****Where the floor on Asian demand destruction is actually being set**** — Pakistan is tendering at ~$16 today; but Bangladesh set the bar __much higher__ in March * ****Europe’s storage dilemma**** — the asymmetric risk nobody in Brussels wants to name, why the Commission’s ‘flex to 80%’ letter may become the floor rather than the ceiling, and what ACER’s stark warning * ****What the TTF forward curve is refusing to price**** — __Energy Flux__ TTF Risk Model at -2, the forced-length unwind narrative, commercial hedgers pivoting, and five concrete watch-items that could break the current calm * The ****100-slide Energy Flux Chart Deck**** is published alongside this letter. TTF and JKM forward curves, CoT positioning decomposition, the TTF Risk Model with component weights, our Hormuz Closure LNG Supply Impact Model out to 2030, the Storage-Speculation Nexus, global LNG flow diagnostics. If you are making decisions against this market, you need this data. Nobody else is publishing gas, LNG and TTF analysis at this depth, with this level of honesty, right now. One click below. Subscribe. 🗝️ Unlock full analysis + Chart Deck download ### This post is for subscribers only Become a member to get access to all content Subscribe now

After a short break, Victor Ponsford and I reconnected on the Energy Flux podcast. We discussed the latest diplomatic developments in the US-Iran war, ongoing tensions surrounding the double blockade in the Strait of Hormuz, and the deepening impacts on energy markets. We also took some time to explore the _Energy Flux_ Hormuz Closure LNG Supply Impact Model, which seeks to reconcile the loss of Middle East supply with new global LNG projects coming online over the next few years. Victor created three illustrative scenarios about the potential timing for a re-opening of Hormuz, first with partial transits only and later at full pre-war levels. The dates are all anchored around milestones in the US political calendar, and I enjoyed the conversation about how Iran’s enduring grip on Hormuz could become an election issue both in the midterms and possibly even beyond. We talked through the political and strategic considerations behind each eventuality, and decided to let listeners vote on their favourite scenario. In the next episode, we will share both the results of the poll and the outputs from the model for each scenario. The survey form is below. Here are the show links 👇 🎧 Listen/watch on YouTube: 🎧 Listen on Apple 🎧 Listen/watch on Spotify 📣 ****Have your say:**** vote on Vic's three possible Hormuz re-opening scenarios, or suggest your own. Complete the survey below: On the next episode, we will share the results of the survey and reveal the modelling outcomes from each of these scenarios. Stay tuned! * * * ## 🎓 YouTube tutorial The scenarios are a bit of fun, but the modelling behind it is a seriously useful analytical tool. If you are curious to see what the Hormuz supply model looks like and exactly how it works, check out this comprehensive YouTube tutorial I published yesterday: Subscribers on the **Premium** and **Deep Dive** tiers can access the model and start creating their own ‘Hormuz closure vs. LNG glut’ scenarios right away. Just click here and log in. Need access? 👇 Upgrade to Premium * * * ## 📺 Live on air Finally, I was live on air again yesterday to discuss these same issues. This short appearance on Al Jazeera News Hour was recorded prior to Donald Trump’s announcement to extend the ceasefire. His decision was unsurprising considering the alternatives (i.e. make major concessions to Iran to land a peace deal, or restart the bombing campaign). Thanks for watching and listening. I’ll be back with this week’s Chart Deck on Friday. –Seb Start the discussion on Flux Exchange

**Ras Laffan partially destroyed. QatarEnergy in extended force majeure. Hormuz LNG transits doubly paralysed. The Israel-Iran-US war grinding fitfully through its second month. And front-month TTF closed Wednesday at €41.399/MWh — marginally below where it settled on 2 March, the first trading day after hostilities broke out against Tehran.** That is not a typo. The price of European gas is the same today as it was in the days after the bombs started falling. Every month Hormuz remains shut, the global LNG market loses roughly seven million tonnes of supply. Cumulative losses are deepening relentlessly towards 60 million tonnes by December. And prices are sliding sideways. Aside from the human tragedy unfolding across the Persian Gulf, the deflation of energy commodities in the face of what was supposed to be an unprecedented supply-side shock — a dislocation that eclipses Russia’s 2022 invasion of Ukraine — is, frankly, befuddling. It challenges every reflex an analyst or trader has trained into themselves over the past four years. So we owe it to ourselves to ask honestly: is the mispricing thesis _Energy Flux_ has spent weeks building still intact? The short answer: yes, but it needs examining under a brighter light. This edition of the Chart Deck — 99 slides of TTF and JKM curves, fund positioning, inter-basin spreads, netback economics, vessel tracks and proprietary model outputs — is the forum for that examination. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Prices and positions play chicken-and-egg The last fortnight delivered a textbook unwind. Investment funds built a record 323 TWh net long in TTF futures, the fastest accumulation in the contract's history (**Chart Deck slides 22–23**). They have since retreated in a notable bout of profit-taking and short covering as the Trump administration veers between talk of peace and threats of annihilation, sometimes in the same breath. The **TTF Sentiment Tracker** is now firmly in the bearish quadrant, even as the long-short ratio among funds remains a lopsided 3:1 (**slide 33**). Length is being trimmed, but the overhang is still there. The contradictions are acute. The **TTF Risk Model** — a composite of the financial and physical stock-and-flow signals we track weekly — is unambiguous: bearish risk is heavily underpriced at current levels (**slides 35–38**). The model is not a forecast. It is a measurement of what the market is _pricing_ relative to what the data is _saying_. Right now, those two things are oceans apart. And yet prices keep drifting. So either the model is wrong, or the market is. ## The loose-market narrative didn’t die. It got buried The most honest reappraisal available is this. The structural story everyone was obsessing over at the end of 2025 — the unprecedented wave of new LNG supply scheduled to hit the water in 2026–28, and the accompanying chatter about an imminent glut — did not disappear when the first cruise missiles crossed into Iranian airspace. It was simply pushed out of frame. Absent a confluence of diplomatic, technical and financial miracles, structurally loose conditions cannot return before 2028. That remains true. What markets may be doing now is remembering the pre-war glut thesis, after briefly trading as if it had been cancelled by the conflict. The _Energy Flux_ Hormuz Closure LNG Supply Impact Model (**slides 97–99**) anchors the other side of the argument. Assuming a 10% resumption of Hormuz flows from September 2026 and a gradual recovery to 100% by mid-2028, cumulative lost volumes are not fully offset until **December 2028**. Markets appear confident they will not have to wait that long. The Chart Deck shows _why_ such confidence is, at best, a stretch — and at worst, wilfully optimistic. ## The war premium is dissolving What the deck captures in granular detail is a price complex reverting toward something resembling functionality after weeks of wartime dislocation. Oil-indexed LNG, which typically trades below spot in supply stress, is less of a bargain than it was six weeks ago. The JKM war premium is fading (**slides 53–58**) and the long-term/spot spread is narrowing. The NWE–TTF basis has rebalanced to a ~$0.45/MMBtu discount (**slide 46**), and inter-basin arbitrage for Atlantic Basin cargoes to Asia is firmly open for the next couple of months (**slides 70–73**), aided by freight rates releasing from their war-driven highs (**slide 45**). US LNG windfall profits — the ones offtakers were banking on for a prolonged crisis — have all but vanished (**slide 62**); cargoes are still in the money on both sides of Suez, but the excess that characterised mid-March has gone. The evidence of that normalisation is visible on the water. _LNG Abuja_ diverted from France to Dahej, India, on 9 April after loading at Nigeria’s Bonny Island. _Celsius Granada_ pulled the same manoeuvre from Gibraltar to Chittagong, Bangladesh, on 12 April after lifting from Trinidad’s Atlantic LNG project. Three cargoes stuck in the Egyptian queue behind Ain Sukhna’s FSRU have discharged and sailed ballast back across the Atlantic; a new trio waits its turn (**slides 75–79**). QatarEnergy, meanwhile, is positioning to lift the first cargo out of Golden Pass, sending three ballast vessels towards Texas. Project partner ExxonMobil is doing the same. Behind the Hormuz blockade, trapped vessels are making themselves useful, lifting the odd cargo into floating storage or delivery within the Gulf. _Al Kharaitiyat_ is ferrying cargoes from Ras Laffan to Kuwait’s Al Zour: Qatari molecules are still moving, just in much tighter, far less remunerative circles. These are not the movements of a market bracing for catastrophe. They are the movements of a market beginning to figure out how to work around one while the messy geopolitics sorts itself out. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Demand destruction is real, and uneven South Asia has absorbed the brunt of the price signal. With JKM near $19/MMBtu, affordability has collapsed: South Asian imports have fallen by close to 1 million tonnes year-to-date against the same period in 2025 (**slide 93**). China is down 1.3 million tonnes, –8% year-on-year (**slide 89**), as it leverages its diversified gas supply complex to enable the resale of contracted LNG volumes into a red-hot spot market. South-East Asia, by contrast, has not taken its foot off the pedal. Imports are up 2.5 million tonnes YTD, a blistering **+43%** (**slide 94**). Europe is pulling hard too, +4.3 million tonnes (+13%, **slide 88**). Middle East and Africa demand is up +60% off a low base (**slide 96**). The net result, captured on **slide 85** : the Iran war is pushing the global LNG balance from projected surplus deeper into actual shortage. Demand exceeds supply by around 1.2 million tonnes year-to-date, and on a year-on-year basis the shortfall is closer to 1.7 million tonnes. There is no glut — yet. ## The Covid mirror that cuts both ways In 2020, health policy artificially suppressed consumption. Pent-up demand, when travel constraints lifted, rebounded viciously and seeded the 2021 commodities bull run. Today’s situation is the inversion: war is artificially suppressing supply, not demand. The incentives to restore exports, particularly for Gulf states whose fiscal health rests on hydrocarbon revenue, are immense. When Hormuz reopens, Middle East LNG could rebound faster than anyone currently models. That is the bullish edge of the analogy, and it is the one markets seem to be pricing. The bearish edge is the one they are ignoring. Covid rebounds outran forecasts because the constraint was easier to dismantle than it was to erect. Hormuz is the opposite: held shut by an unpredictable White House out of its depth, and a bombed-out Tehran clinging onto its only source of leverage for dear life. A Covid-style rebound is a defensible bet. But it requires a Covid-style reopening path, and nothing visible right now resembles one. It depends on an awful lot going right, reasonably soon. Personally, I do not see a swift resolution as the base case. The yawning political gap between Tehran and Washington has not narrowed. The physical damage to Ras Laffan is not theoretical. The force majeure remains in force. And the data shows, unambiguously, that risk is mispriced. But the uncertainty is vast, and observers must remain alive to the possibility of another narrative whiplash from famine to feast — accelerated, perhaps, by demand destruction running deeper across Asia than the aggregate numbers currently suggest. ## Storage season begins. So do the hard questions EU gas injection season is finally under way, at a rate marginally above the seasonal average (**slides 48–51**). Ursula von der Leyen’s recent refill coordination guidance is an overdue step in the right direction that could frame the refilling effort. But with seasonal spreads flat to inverted (**slide 16**), a live question sits over the injection curve: how long can this pace be sustained, and should the EU be targeting maximum storage in these price conditions at all? Will the Commission tell member states to subsidise uneconomic injections? If so, it will be rapidly priced in by TTF traders, just like in January 2025 when Germany floated (and then rapidly abandoned) an unworkable storage subsidy scheme. The Chart Deck does not answer these questions. What it does is lay out the inputs — storage deviation versus seasonal norms, weekly injection rates, the Spark Signals complex, the LNG Physical Balance Index, the Storage-Speculation regression modelling — that any serious answer has to engage with. ****What’s inside the Chart Deck?**** Ninety-nine slides. Every major gas and LNG benchmark, in history and in futures. The full ****TTF Sentiment Tracker**** and ****TTF Risk Model**** outputs, all in one place. The ****Storage-Speculation Nexus**** , illuminating fund positioning along the TTF curve. Granular US LNG netback breakdowns by delivery month and route (Sabine to Japan, Dec-24 through Jan-27). Global flows by region. Vessel-level reporting on the cargoes capturing the Atlantic-Pacific arbitrage right now. And the ****Hormuz Closure LNG Supply Impact Model**** : the framework quantifying what has actually been lost, and how long replacement will take. __Energy Flux__ subscribers on the Premium and Chart Deck tiers get the full deck. Everyone else gets this note. If you rely on conviction-led analysis that takes a position, defends it with data, and revises it in daylight when the data demands — the Chart Deck is where that happens. Subscribe to unlock the Chart Deck **👇 DOWNLOAD: 99 slides in .ppsx and .pdf format 👇** ### This post is for subscribers only Become a member to get access to all content Subscribe now

Following user feedback, I have implemented several major improvements to the Hormuz Closure LNG Supply Impact Model, which was released on Tuesday alongside a free-to-read Deep Dive. The biggest single change is a more dynamic treatment of how Hormuz LNG transits might evolve. The first iteration of the model allowed only a single ‘Hormuz reopening’ percentage cap and date, as if Hormuz flows would remain in a fixed state forever. In hindsight, this was unrealistic. The new iteration allows users to set two key parameters: first, an initial partial reopening date from which exports resume at a user-defined percentage cap; and second, a final full reopening date when Hormuz LNG transits return to 100%. The model plots a smooth recovery curve between the two. Source: Hormuz Closure LNG Supply Impact Model Users can now model different ramp-up scenarios for the reopening of Hormuz. If you think all sides in the conflict are strongly motivated to agree a peace settlement and restore Hormuz shipments quickly, you can model that. Or maybe you see diplomacy failing and open conflict hindering commercial shipping through the Strait for many years. You can model that too. The resultant supply projections from different scenarios vary wildly, which I find valuable for understanding the profoundly dynamic situation confronting Middle East exporters. My own view is that partial Hormuz LNG transits could resume at around 10% from September 2026, followed by a gradual restoration of flows to 100% in mid-2028. So I set the model to default to these. Source: Hormuz Closure LNG Supply Impact Model #### Other changes & updates The model contained a few bugs and quirks relating to the treatment of LNG projects that were operating prior to 1 March but still ramping up. Namely, LNG Canada and Plaquemines Phase 1. The new version fixes these to give a more realistic treatment of how their remaining capacity could ramp up over the observation period – all of which can be edited in the project table. Also: * Plaquemines Phase 2 has been reclassified as a future expansion that ramps from first LNG in April 2027, with corrected nameplate capacity. * Project status is now dynamic and changes with the selected As-of date. * COD and Utilisation manual inputs have been removed because they did not improve model outputs. If you notice other bugs, or have any other feedback or queries, please do message me or leave a comment on this thread in Flux Exchange. ## New assumptions, more nuance As a result of these changes (and a few tweaks to the underlying assumptions), the model outputs have changed quite dramatically in the Base Case. Rather than depicting a cumulative supply deficit stretching into the 2030s regardless of the trajectory of the new supply wave, it now depicts a more nuanced picture: lost Hormuz capacity is offset by new projects in Q3 2027, and the cumulative supply loss evaporates by late 2028. (This is a bit closer to the industry view: Edison CEO Nicola Monti yesterday said the LNG market will return to structural ⁠balance “over the next 18 months”, which probably reflects the reality of LNG supply flexibility, plus some slightly excessive corporate optimism.) I have rewritten Tuesday’s Deep Dive, War vs. Glut: The Great LNG Reckoning, to reflect these changes. I would encourage all readers to check it out. It is free to read 👇 War vs. Glut: The Great LNG ReckoningWar shut in one of the world’s most critical export arteries. The long-promised supply wave is finally arriving. Which force wins, when, and by how much? Our new scenario data model brings clarity to the confusion.💥 Energy Flux 💥Seb Kennedy I think the results are more interesting and less depressing: an historic supply shock that will _at some point_ be mitigated by an equally historic supply surge. The key question is when. The model can generate the answer; all you need to do is bring the ingredients. The interactive model is reserved for subscribers on the **Deep Dive** and **Premium** tiers – and it is just one of the many benefits that comes with a subscription. If you’re on one of those paid plans, you can access the improved model immediately. Just log in and click here 👇 Hormuz Closure LNG Supply Impact ModelAn interactive chokepoint closure scenario engine, supported by a global LNG project tracker and user override layer💥 Energy Flux 💥Seb Kennedy Thanks for reading, Seb Upgrade to Paid P.S. If you want to upgrade to a paid plan but cannot do so via credit card, please contact us to discuss corporate billing and managed/group subscriptions. _Energy Flux_ offers bespoke subscription solutions to suit all needs. P.P.S. Debugging is time-consuming! The next **Chart Deck** will be published on Friday, all being well🤞

**The global LNG market has entered a phase of extreme uncertainty where lazy narratives go to die.** For years, the consensus trade was simple: a wall of new supply was coming. The United States, Canada and Qatar would flood the market, loosen balances and drag prices lower. Then war arrived, the Strait of Hormuz slammed shut, two Qatari trains were blown up, and that clean, comforting story of abundance collapsed under the weight of a destabilising global reality. Now the market is being asked to price two opposing truths at once. On one side sits an extraordinary wartime supply shock, with Gulf exports constrained and uncertainty hanging over every vessel movement, repair schedule and diplomatic headline. On the other sits a vast queue of LNG projects that still promises to reshape global gas balances, albeit on capital-intensive infrastructure timelines rather than cable-news timelines. That tension is now the market. So we built a tool to measure it. Today, _Energy Flu_ x launches the Hormuz Closure LNG Supply Impact Model: a premium scenario engine that allows readers to quantify the collision between lost Middle East supply and incoming global LNG capacity using their own assumptions, intelligence and market judgement. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## The Base Case: ugly, slow, and structurally tight Start with the default assumptions and the conclusions are stark. Under the _Energy Flux_ base case, Hormuz only partially reopens in September, damaged Qatari capacity remains offline for four years, and new projects continue to ramp at a realistic rather than miraculous pace. Result: the supply hole is not repaired quickly. The model indicates that lost export capacity linked to the closure is not replaced until **January 2029**. That is the point at which new non-Hormuz LNG capacity additions finally match the annualised capacity removed from the system. Source: Hormuz Closure LNG Supply Impact Model That sounds reassuring until you look at cumulative volumes. Markets do not consume nameplate capacity; they consume molecules. And cumulative lost supply compounds every day the disruption persists. Roughly six weeks into the conflict, the physical shortfall already runs to more than 10 million tonnes. If current conditions drag into winter, the missing volume becomes systemically meaningful: more than 55 mt, or more than 13% of total worldwide LNG trade in 2025. If disruption endures, the cumulative deficit stretches deep into the 2030s. Without a swift resumption in Middle East LNG exports, it could take the best part of a decade for new projects to fully offset lost supply that’s been deepening since the US and Israel began their assault on Iran. ****Source:**** Hormuz Closure LNG Supply Impact Model This is the part most commentary misses: even when replacement capacity starts arriving, it first has to dig the market out of the crater that is deepening every day the war and blockade drag on. ## The optimistic take: a slow reversal of misfortune But all this could change in an instant. Geopolitical machinations are casting a deep pall of uncertainty over the market. The conclusions above are based on assumptions that could quickly be overtaken by events – which is why the Hormuz Closure LNG Supply Impact Model was designed to be adapted by users based on their reading of the highly fluid situation in the Middle East. For example, if Hormuz transits are restored to 80% of pre-war averages by August 2026, the damaged Ras Laffan trains are repaired within three years, and the entire global LNG supply wave is accelerated by six months, then the picture changes dramatically. New capacity additions would replace lost Hormuz-dependent liquefaction as early as **March 2027** … ****Source:**** Hormuz Closure LNG Supply Impact Model … and the cumulative physical supply loss from Hormuz closure could be completely eliminated by **May 2028**. ****Source:**** Hormuz Closure LNG Supply Impact Model Plaquemines has begun shipping the first of (hundreds of?) commissioning cargoes. LNG Canada is moving toward steadier utilisation after early technical friction. Golden Pass, Corpus Christi Stage 3 and others remain key pillars of the next growth cycle. But none of that means the market is suddenly comfortable. Projects ramp in phases, trains can slip, utilisation rises slowly, feedgas constraints emerge. Commissioning cargoes make headlines but do not instantly rebalance the planet. Meanwhile, the disruption side of the ledger is enormous. Around **83 mtpa** of nameplate capacity in Qatar and the UAE sits inside the Hormuz risk envelope. Included within that is **12.8 mtpa** of Qatari liquefaction capacity damaged in the March strikes, with a multi-year repair timeline assumed in the base case. So yes, new supply is arriving. But whether it will arrive fast enough to erase a war is, at best, highly debatable. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## The thick fog of an unwinnable war After the failure of Friday’s peace talks, the shaky ceasefire between the US, Israel and Iran looks set to collapse at any moment. Yesterday, the Trump administration imposed its own embargo on vessels transiting the Strait of Hormuz to access Iranian ports, in an attempt to starve Tehran of oil revenue. Highly provocative towards China, this new blockade raises myriad questions around enforceability and credibility. Will US warships really open fire on China-bound oil tankers laden with Iranian crude? Having started this maddening and unwinnable war, will the US finally acknowledge the untenability of its position with a grand capitulation? Or is there another move yet to be made to allow Washington to maintain pressure and save face against an adversary that has proven surprisingly tenacious in the face of unprecedented aerial bombardment? This wild game of brinkmanship is throwing into stark relief the many ‘known unknowns’ circling Hormuz and the future of Gulf energy exports. In this fog-of-war market, the only certainty is low information, high stakes, and constant narrative whiplash. Until 1 March 2026, it seemed that the long-anticipated global LNG supply wave was finally about to break, only for a poorly-planned geopolitical war of choice to scupper that outlook. Overnight, the dominant narrative flipped from ‘LNG glut incoming’ to ‘unprecedented LNG supply shock’, leaving many observers dizzy and confused. Faced with diametrically opposed ‘structural supply glut’ and ‘worst-case scenario supply shock’ realities, the number one question that _Energy Flux_ readers have been asking is: how far, and how soon, can new global supply additions offset lost Hormuz volumes? The Hormuz Closure LNG Supply Impact Model aims to answer that question by giving readers a disciplined framework for testing scenarios. Change the assumptions, watch the supply path retrace, and understand which variables actually matter. ## What the tool lets you model The engine comes pre-loaded with an _Energy Flux_ base case, but it is built to be challenged. Users can adjust **Middle East disruption variables** : * Hormuz restoration date * Percentage of flows restored after reopening * Inclusion or exclusion of Oman in the disruption baseline * Repair timing for damaged Ras Laffan Trains 4 and 6 * Qatar North Field East first LNG timing * The interaction between reopening logistics and stranded Qatari capacity Users can also rework core **global LNG supply wave variables** : * Project-by-project edits * Nameplate capacity changes * First LNG dates * COD timelines * Full-capacity ramp dates * Utilisation assumptions * Risk classifications * Ramp profiles * Global acceleration or delay factors applied across the queue In short: you can model your own market, not ours. ⚙️ If you believe diplomacy restores 80% of flows by August, test it. ⚙️ If you think construction bottlenecks delay half the US Gulf queue, test it. ⚙️ If you think Qatar recovers faster than advertised, test it. ⚙️ If you think everything slips and everyone is frankly lying, test that too. Check out the model! ## Why this matters now The geopolitical backdrop remains absurdly unstable. Ceasefires are partial at best, second-order threats are multiplying, and Washington is improvising coercive measures with unclear credibility. Tehran remains damaged but far from broken. China’s role looms over maritime enforcement. Every actor is posturing, none is fully in control, and energy markets are forced to price a situation that nobody fully understands. The old narrative of ‘LNG glut incoming’ has not vanished. It has collided with ‘historic supply shock’. Both forces are live. Neither can be understood in isolation. That is precisely why this tool matters. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## A clarion-call for clarity The delta of uncertainty is so great that it creates space for motivated reasoning. Anyone with an opinion or agenda can influence how people think about what’s happening in the LNG space based on shaky assumptions, or worse. The LNG market does not need louder opinions. It needs better frameworks. The Hormuz Closure LNG Supply Impact Model is designed to do exactly that: turn chaos into scenarios, convert narratives into numbers, and help serious market participants think more clearly at the moment clarity is in shortest supply. The base case is provocative. Your own assumptions may be better. There is one way to find out. Subscribers can access the model right now on the _Energy Flux_ platform. Just click here, log in, stress-test your view of the market, and see when, where and how the market balances. Check out the model! **Seb Kennedy | Energy Flux | 14 April 2026**

**After six bloody and bruising weeks of warfare in and around the Persian Gulf, the United States has agreed to accept Iran’s 10-point ceasefire proposal as a “workable basis” for peace talks. The magnitude of this defeat deserves to be stated plainly.** Iran’s demands include formalisation of its control over the Strait of Hormuz, acceptance of uranium enrichment rights, the lifting of all primary and secondary sanctions, termination of all UN Security Council and IAEA resolutions against Tehran, payment of war damages, withdrawal of US combat forces from the region, and a cessation of hostilities on all fronts, including Lebanon. These are not entirely new demands. They are a bold expansion of the terms Iran pursued throughout the JCPOA era in exchange for allowing IAEA inspectors to access enrichment sites — the same deal Donald Trump tore up in 2018, claiming he could get something better. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. His “better deal” looks a lot like surrender, submission and capitulation all wrapped up in one big TACO. The US has spent six weeks depleting munitions, losing servicemembers, burning political capital, and inflicting a global energy price shock — only to arrive at a negotiating position weaker than the one it walked away from. There is zero trust between the warring factions, and nothing in their recent fiery exchanges creates any. Both sides claim victory, and hold diametrically opposed maximalist war objectives. Iran has not conceded a single substantive point. If anything it has been strengthened. This is America’s Suez moment. The President of the United States has precipitated Iran’s ascent as a Middle East regional power that controls global oil and LNG flows, while exposing America’s inability to project power at vital economic chokepoints around the world. __The full analysis below unpacks what this means for energy markets: the Hormuz toll booth economics, the legal framework Iran is exploiting, why Qatar’s force majeure defence is crumbling, and why the ceasefire selloff has only strengthened the case that markets are catastrophically mispricing risk. Exclusively for Energy Flux Premium subscribers.__ Upgrade for instant access 🗝️ ### This post is for subscribers only Become a member to get access to all content Subscribe now

**Over the past five days, the United States lost an F-15 fighter jet over southern Iran, launched a large-scale rescue mission deep inside Iranian territory that reportedly lost two Black Hawk helicopters and several other attack aircraft, and watched Iran tear up a mediated deal to allow Qatari LNG tankers through the Strait of Hormuz.** Amid these dramatic developments, the President of the United States issued a desperate expletive-strewn threat for Iran to re-open the Strait of Hormuz or face the complete destruction of its power grid. At the time of writing on Tuesday morning, the deadline expires tonight. The Pentagon is reportedly preparing strike plans targeting Iranian power plants that serve both civilian and military purposes, in an attempt to thread an impossible needle between executing the President’s wild threats and avoiding war crime accusations. None of this is normal. None of this was priced a few weeks ago. And natural gas markets, astonishingly, still appear to be betting that it will all be wrapped up before winter. Let’s unpack what happened, what it means, and why the forward curve is (still) living in a fantasy. ## Sweet surrender on the quayside Last Thursday 2 April, the first LNG carrier traversed the Strait of Hormuz since the outbreak of hostilities. But the Omani vessel went in ballast. No LNG was exported. The ship simply repositioned back to Oman. It was a logistical move. Source: Kpler Then on Sunday 5 April, two loaded Qatari LNG tankers that had reportedly been cleared to transit the Strait under a deal brokered via Pakistani mediation turned back mid-voyage. Iran had agreed to let them through. And then it changed its mind. Source: Kpler That deal, reportedly mediated by a third party and negotiated with US oversight, was supposed to be the first crack in the blockade. Its collapse speaks volumes about Iran’s strategic posture: Tehran is not interested in incremental concessions or off-ramps. It is consolidating control over the chokepoint and seeking to establish permanent leverage over the global energy economy. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## In the shadow of the cargoes For weeks now, the Iranian Revolutionary Guard has been imposing an informal toll on vessels transiting the Strait, with arbitrary charges reportedly reaching $2 million per ship. This is raw extortion, but it is evolving. The Iranian Parliament has now approved a bill to formalise the levy that, if enforced, would structurally reconfigure the cost and logistics of transiting the world’s most important energy chokepoint. The implications cascade. A formalised toll on Hormuz would permanently inflate the cost of Gulf LNG, oil, fertiliser, and petrochemical exports. It would layer an additional premium on top of the war risk premium already embedded in LNG spot prices. It would represent, in effect, Iran claiming a permanent economic stake in global energy trade. A tollbooth at the throat of the world’s hydrocarbon supply. The only scenario in which this new energy world order does not materialise is regime change in Tehran. And as this weekend’s events demonstrate, that prospect is not getting closer. ## A policeman shines a light On Friday 3 April, a US F-15 fighter jet was shot down over southern Iran. Both crew members ejected. One was recovered by US forces. The other was stranded inside Iranian territory. Over the Easter weekend, the US mounted an audacious large-scale rescue operation to extract the downed pilot. By all accounts, it succeeded, but at significant cost. Iran’s joint military command claimed it destroyed two US Black Hawk helicopters during the mission. The US was reportedly forced to destroy two of its own aircraft on the ground at a makeshift airstrip in Isfahan after a technical mishap prevented their departure. Separately, an A-10 attack aircraft was also lost after being hit by Iranian defence forces. ## Foghorn blowin’ out wild and cold The scale and cost of this operation, which involved dozens of aircraft and hundreds of soldiers, have drawn scrutiny. Rescue missions for a single downed pilot do not always require this level of force projection deep inside hostile territory, although one US General described the loss as acceptable. Iran’s Foreign Ministry spokesman Esmaeil Baghaei suggested the operation may have been deceptive plan aimed at “stealing uranium”. He noted that the makeshift airstrip used by US forces sits a long way from the rescued pilot's supposed location, but just 25 km south of the Isfahan tunnel complex. Isfahan is where the International Atomic Energy Agency (IAEA) believes roughly half of Iran’s 60%-enriched uranium stockpile is stored. The IAEA has not accessed the site since June 2025. IAEA chief Rafael Grossi stated in March that the stockpile is believed sufficient for approximately 10 nuclear weapons. It must be stressed: the fog of war is thick. Information from Washington and Tehran is self-serving and frequently contradictory. Third-party commentary on social media is consistently unreliable. _Energy Flux_ has no independent insight into what actually happened at Isfahan and is not endorsing any particular narrative. What we _can_ observe is this: the material losses incurred, the proximity to a known nuclear facility, and the scale of the operation relative to its stated objective have generated doubt about the official explanation. That doubt, warranted or not, compounds the strategic uncertainty that is already paralysing the region. What is not in doubt is the bottom line: the US has now lost multiple aircraft and helicopters inside Iranian territory in a single weekend. Whatever the mission’s true objective, this is not the profile of a military campaign that is approaching decisive resolution. ## No money in our jackets and our jeans are torn Against this backdrop, the President’s public statements have escalated to a register that is extraordinary even by his own standards. Source: Truth Social On Monday 6 April, he doubled down: “every power plant in Iran will be out of business, burning, exploding, and never to be used again” if Iran does not reopen Hormuz by midnight tonight. The expletive-laden rant and escalating threats reveal the depth of frustration in Washington at a situation it initiated but cannot control. Iran has absorbed airstrikes, absorbed sanctions, and absorbed the loss of military assets, and it has not reopened the Strait. Its leverage over Hormuz remains intact. And every escalation from Washington appears to harden Tehran’s resolve rather than weaken it. The drama is gripping, and the humanitarian stakes are real. But for energy market participants, the most urgent question is: does the traded price of natural gas and LNG adequately reflect all of this mayhem? _****The risk-reality gap is widening.****_ __New third-party modelling of the Strait of Hormuz closure confirms a stark disconnect between what the TTF forward curve is pricing and what the events on the ground are signalling.__ __The analysis below unpacks the methodology, walks through three disruption scenarios, and explains why the implied market view on the timeline to normality is dangerously detached from reality.__ __This is market-critical information at a moment of extreme risk and high stakes.__ Upgrade to unlock the Deep Dive 🗝️ * * * ### This post is for subscribers only Become a member to get access to all content Subscribe now

**Last week,_Energy Flux_ laid out the case that gas markets are catastrophically mispricing the supply shock unfolding in the Middle East. That **thesis**has not been borne out in the markets. Not because it was wrong, but because the mispricing has gotten _worse_.** Dutch TTF front-month, the European gas benchmark, traded sideways again last week. The risk premium deflated. At the time of writing, the prompt contract is again trading _below_ €50/MWh. And yet the physical realities underpinning the most severe LNG supply disruption in modern history have not changed. If anything, they have hardened. The Strait of Hormuz remains closed to LNG transits. Qatar’s force majeure on LNG exports is still in effect. The last pre-war cargoes loaded from the Middle East are now discharging at their destinations. After that, there are no more. And Donald Trump’s latest rambling address did nothing to clarify war aims, de-escalation timelines, or the path to reopening the world’s most critical energy chokepoint. So here is the question every analyst is being asked right now: **why aren’t prices higher?** ## Dissecting the usual suspects Several theories are circulating. Financial markets are structurally better at pricing _risk_ than pricing _physical disruption_. Futures capture probabilities, not the grinding cumulative impact of molecules not arriving at terminals. Asian demand destruction is doing heavy lifting: South and Southeast Asia are in full crisis mode, China has halted spot LNG imports until at least the summer, and the result is a grotesque replay of 2022 where developing economies absorb the pain so Europe can keep buying at tolerable prices. These contribute at the margin. But the theory I find most compelling is simpler: the sheer incoherence of US policy is paralysing price formation. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Trump Always Chickens Out, except when he doesn’t War fatigue is setting in. More specifically, **TACO fatigue:** the exhaustion of trying to extract signal from an endlessly contradictory stream of pronouncements, Truth Social posts, and deadlines that melt into irrelevance as soon as they are uttered. Traders cannot price what they cannot parse. The result is a market caught in a bizarre holding pattern: funds are building record long positions because the physical fundamentals demand it, but _prices_ refuse to follow because nobody can model the trajectory of a conflict whose architect cannot articulate its own endgame. Every Truth Social post is a potential reversal trigger. So the smart money positions structurally long while the spot market treads water, waiting for clarity that never arrives. Trump’s big speech last night was supposed to provide that clarity. It did the opposite. On the single most important question facing energy markets — when and how does Hormuz reopen? — this was the answer: > _“And in any event, when this conflict is over, the strait will open up naturally. It’ll just open up naturally. They’re going to want to be able to sell oil because that’s all they (Iran) have to try and rebuild. It will resume the flowing and the gas prices will rapidly come back down.”_ ‘It will sort itself out.’ That is the entirety of the post-war Hormuz plan as articulated by the President of the United States. No framework for transit security. No multilateral arrangement. No detail on who controls the strait, who guarantees passage, or how the world’s most critical energy chokepoint transitions from active war zone back to functioning trade route. Just: it’ll open up naturally. ## I broke it, you fix it It gets worse. For countries struggling to source fuel, many of which declined to join what Trump calls “the decapitation of Iran”, the suggestion was equally unedifying: > _“Go to the straight and just take it, protect it, use it for yourselves. Iran has been essentially decimated. The hard part is done, so it should be easy.”_ ‘Just take it.’ ‘It should be easy.’ Leaving aside the obvious fact that it has proven impossible for the world’s most powerful naval force, this is not a de-escalation framework. It is an invitation for uncoordinated military adventurism in the world’s most volatile waterway, delivered with the strategic depth of a petulant toddler. Unless Trump is willing to make enormous concessions — leaving Iran in full control of Hormuz transits, resilient to internal dissent, and emboldened against future external aggression — the conflict has no off-ramp. He has broken Hormuz and is now buying time for a decisive escalation, dressed up in maddening rhetoric that is faux-reassuring and inflammatory in equal measures. US withdrawal from Iran is militarily impossible without owning a humiliating defeat of Trump’s own making. That is the galling geostrategic reality. And it explains the extraordinary divergence between what funds are _doing_ and what prices are _saying_. ## The smart money is screaming Investment funds extended their net long position in TTF gas futures to **323 TWh** last week — an all-time high, smashing the previous record set in February 2025. Hedge funds and other money managers have added 214 TWh of net length in just four weeks, the fastest accumulation in TTF history **(slide 22-23)**. Shorts are being closed at record pace. The long-short ratio, already in uncharted territory, has hit an unprecedented **4:1** **(slide 33)**. Funds are unambiguously positioned for an explosive upward correction, even as spot prices drift sideways in the fog of war. Yet some unwinding is almost guaranteed this week. Weekly average TTF fell even as funds added record length, a divergence that is unsustainable. Expect tactical profit-taking and selective re-opening of shorts, while funds retain core exposure to further escalation, including widespread speculation of a US ground incursion into Iran in April. ## A subtle shift along the curve The latest output from the **Storage-Speculation regression model** reveals something critical. Last week, the model identified funds betting on a multi-year European energy crisis, concentrated in long-dated 2028 contracts. This week, it signals a resumption of trading activity in near-dated 2026 and 2027 calendar month futures **(slides 40–43)**. The implication: funds are reassessing how they price risk along the curve. If Hormuz is somehow reopened sooner rather than later, the immediate priority snaps back to Europe’s immediate gas storage restocking challenge — in which case, the curve still holds plenty of upside potential. #### The Chart Deck in brief The full 95-slide Chart Deck unpacks these dynamics in granular detail. Here are some of the standout signals: 💥****European complacency is deepening.**** TTF has sold off and the risk premium has deflated, even as the geostrategic case for higher prices strengthens ****(slides 9–14)****. The disconnect is stark. 💥****Storage is low, and refilling it will be expensive.**** EU storage exited winter at 28% full — not as dire as the 25.5% recorded in 2022, but challenging. Reaching the EU’s stated 80% target by 1 November requires injecting approximately 594 TWh over the next seven months, implying a daily injection rate of roughly 2.8 TWh — well above the historical average of 2.0–2.5 TWh/day ****(slides 48–51)****. 💥****The restocking bill: between €20 billion and €33 billion,**** depending on whether TTF averages €34/MWh or €55/MWh over the injection season. And flat seasonal spreads are actively disincentivising injections, compressing the economic case for building inventory precisely when Europe needs it most ****(slides 15–16)****. 💥****The Atlantic-Asia arbitrage window is barely open.**** TTF’s discount to JKM has cracked open the US-Asia arb on the front month, but the rest of the 2026 curve remains largely closed ****(slides 60–63)****. Asia demonstrably needs cargoes, so why? Likely a combination of term-contract lock-ins at fixed differentials, demand destruction suppressing spot appetites, and shipping logistics still adjusting to longer voyage routes. 💥****Stalling LNG freight rates**** ****compound the picture****. The cryogenic vessel market is caught between excess tonnage from Qatari shut-ins and the clear need for longer, more circuitous voyages ****(slides 70–73)****. 💥****Notable vessel movements**** tracked in the deck reveal the extent of trade flow distortions now rippling through the global LNG fleet, with granular cargo-level data on re-routing patterns and destination shifts as the market adapts to the loss of Middle Eastern supply ****(slides 80–84)****. 💥****The TTF Risk Model is still flashing Bullish Risk Underpriced,**** although the signal has tapered slightly from last week’s record score ****(slides 88–90)****. 💥****LNG demand is being destroyed.**** The modest improvement in the TTF Risk Score stems from a slightly less alarming LNG Balance Index reading, presumably as demand destruction begins to register in the physical flow data (slide 83). __****Get the full picture****__ __This free overview barely scratches the surface. The full__ _****95-slide Chart Deck****_ __, available as a downloadable PDF and PPSX slideshow, contains the complete analytical framework: every proprietary model output, curve structure analysis, positioning breakdown, and contextualised storage inflow data that underpin the conclusions above.__ __If you are making decisions in these markets, or advising those who do, this is the week to have the full picture in front of you.__ 🔑 Upgrade to download the Chart Deck **👇 DOWNLOAD: 95 slides in .ppsx and .pdf format 👇** ### This post is for subscribers only Become a member to get access to all content Subscribe now

Donald Trump has, perhaps unsurprisingly, blinked again. The US President extended his deadline for destroying the Iranian electricity system by another 10 days. Insisting that productive talks _are_ ongoing with unspecified representatives of the Islamist regime in Tehran, Trump said the strikes – which would trigger devastating humanitarian impacts – are now deferred until 6 April. I jumped into the studio to record a brief emergency episode of the Energy Flux podcast to bring listeners up to speed on this development, and several other matters on my mind. Chief among these is the question of regime change in Iran. The entire energy future of the Middle East will be defined by the fate of the Islamist theocracy; if clings on, the lingering threat of Hormuz closure could stymie oil and LNG investments for years, if not decades. But toppling the Islamic Republic does not seem possible without a ground invasion that incurs huge casualties and intolerable collateral damage, particularly for the very Gulf states that are desperate to extinguish the Hormuz threat for good. So, no easy choices. Here’s the episode: ### 🎧 Listen/watch on YouTube: ### 🎧 Listen/watch on Spotify: ### 🎧 Listen on Apple podcasts: * * * ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## 📺 On the airwaves I was live on **Al-Jazeera** yesterday to discuss the worsening global energy situation amid prolonged closure of Hormuz. The anchor was keen to explore the likely impact of further military escalation against critical energy and desalination infrastructure across the Gulf region, as well as the brewing fertiliser crisis that threatens food security. I tried to explain that, even if the worst case scenario is avoided, the world still faces an unprecedented commodity supply shock that markets are failing to price adequately (as I explored in this week’s Chart Deck). I’m not sure how well the message landed. Judge for yourself: You can catch up with all my TV and media appearances on the Energy Flux website – here is the link: Media appearancesI love talking energy. Here’s an evergreen list of recent podcast and media appearances.💥 Energy Flux 💥Seb Kennedy * * * ## 🗞️ In the news I have been inundated with journalist requests and quoted in all sorts of news outlets over the last couple of weeks, far too many to list here. But one in particular is worth mentioning: a very interesting Reuters report about the volume of LNG lost due to Hormuz closure and the 3-5-year outage at the two Qatari LNG trains damaged by Iranian strikes. Source: Reuters The report cited three big consultancies, which estimate that the market is facing the loss of around 30 million tonnes of LNG this year alone. Per the report, that is “equal ​to about 500 LNG cargoes, enough to meet over half of Japan’s annual imports or Bangladesh’s for five years.” Source: Reuters I see those estimates as rather optimistic, because they assume resumption of production from June onwards. I am not convinced that exports would be able to ramp up as quickly as that, even if peace was magically declared tomorrow. The reporters were kind enough to include this quote from me: > “There's just no way to easily replace the lost volumes, and no amount of portfolio optimisation or cargo swaps will bridge the gap between the lost supply ​and current demand... which is a significant blow ​to energy security for those countries that are ⁠relying on those volumes,” said Seb Kennedy, independent analyst at Energy Flux. To read the full Reuters article, click here. Have a great weekend, –Seb * * * Are you receiving ****Flux Briefing**** , the daily blast of gas, LNG and geopolitical news? If not, you are missing out! Head on over to ****Flux Exchange**** to sign up (click the alarm 🔔 icon in the Flux Briefing category and choose ‘watching first post’) Take me there

**The physical gas market is screaming. Financial markets are not listening.** This week’s 99-slide **Chart Deck** lands at a moment of extraordinary divergence between what the molecules are telling us and what paper markets are willing to price in. 💡 __Here’s the must-read overview (premium subscribers can download the full__ _****99-slide Chart Deck****_ __via the paywalled link below).__ The Middle East energy war is metastasising into what is shaping up to be the most severe supply disruption in modern history. Yet the front-month contract on Dutch TTF, the European benchmark, is trading in the same €48-54/MWh range it occupied before Iranian missiles struck Ras Laffan and QatarEnergy declared force majeure on long-term supply contracts (**slides 9-14**). The facts speak for themselves. The largest single source of LNG on the planet has been physically shut in for an undefined period. About 12.8 million tonnes per year of liquefaction capacity is damaged and likely offline until the end of the decade. The last of the Qatari cargoes loaded before the outbreak of war will arrive at their destinations in the coming days, after which there will be no more. Qatar’s long-term buyers will need to either fork out an extra $40-50 million _per cargo_ to replace lost oil-indexed volumes in the spot market, or go without (**slide 55**). Most will wait it out, because the market’s dominant narrative is that a peace deal is around the corner. It is not. Yes, there are back-channel talks. But there is zero overlap between stated objectives and red lines on the US-Israeli and Iranian sides. The Trump administration is jawboning markets with vague talk of negotiations while simultaneously deploying thousands of troops for what resembles preparation for a land incursion into Iranian territory. Traders seem mesmerised by the rhetoric, treating every vaguely conciliatory soundbite as a reason to sell risk premium out of the curve. The disconnect between Washington’s desperate rhetoric and the chaotic flywheel of a war it cannot stop is striking. # Sounding the risk alarm The**TTF Risk Model** cuts through the bluster. This week it is emitting its deepest bullish signal ever recorded. For subscribers who have followed this framework over time, that context matters enormously. The model is a calibrated composite of curve structure, positioning data, physical LNG flows, and behavioural signals. Designed as a low-latency, high confidence signal, it does not respond to headlines. It responds to the structural asymmetry between where risk is priced and where risk actually sits. Right now, that asymmetry is vast. Bullish risk is under-priced to a degree the model has never previously identified. This section alone is worth the price of admission (**slides 35-38**). If your base case is a short, sharp conflict that normalises in just a few months, you’re betting against big money. The **Storage-Speculation Nexus regression model** shows investment funds pivoting hard into 2028-dated TTF maturities, an astonishing pattern that carries profound implications for the European gas storage refill cycle and well beyond (**slides 40-43**). Two weeks ago, funds executed the biggest gross TTF liquidation ever; a panicked unwind that tells its own story about how badly wrong-footed the market was by the escalation (**slides 21-27**). But where capital is flowing _next_ is even more instructive. # Europe’s eternal crisis The regression model reveals speculative positioning that prices a scenario in which Europe kicks the refilling can down the road endlessly. Prompt prices too high to restock adequately; depleted inventories heading into Winter 2026-27; an even more brutal procurement challenge in Summer 2027; and successive price shocks compounding into 2028 and beyond. In other words, investment funds are not just betting on a bad winter. They are betting on _a multi-year crisis_ in which Europe is exposed to rolling supply shortfalls, season after season, with no structural resolution in sight. This is no longer a theoretical risk. It is the base case if Hormuz does not reopen swiftly. And there is no credible catalyst for that to happen. Nobody is saying this publicly. But when big capital reconfigures exposure like this, it leaves footprints in the data. You just need to know where to look. Commercial operators, for their part, are quietly slashing TTF exposure across risk management and discretionary portfolios (**slides 28-32**). The combined effect is that the long-short ratio of physical players relative to speculators has reached its most extreme outlier state _ever_. It is literally off the chart (check out the new X-axis on **slide 33)**. While front-month volatility reacts to whatever vacuous statement the commander-in-chief just dreamt up, the institutional gas market repositioning for a prolonged disruption. The data is unequivocal. ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. # From feast to famine Meanwhile, the revamped **LNG Physical Balance index** is plunging deeply into negative territory on what is, by any measure, a rapidly tightening supply shock now propagating out from the Gulf (**slide 86**). The physical supply overhang from last year has not merely thinned; it has completely dried up. The market has flipped from a 0.8 mt surplus into a deficit of 0.3 mt in two short weeks, and is growing fast (**slide 87**). South Asia took the biggest hit. Weekly LNG imports across India, Bangladesh and Pakistan have sunk to multi-year lows for this time of year (**slide 95**). But this does not go far enough: demand destruction must cut deeper, and across more geographies, to offset the scale of supply loss. South Asian buyers, already priced out of spot LNG markets, are the canary in the coal mine. Europe is next. The fact that speculative capital is reaching all the way out to 2028 speaks volumes about how long the pain is expected to last. This is the structural reality that the TTF curve is refusing to acknowledge. The energy crisis this conflict is already precipitating will linger for years. Its knock-on effects will reshape global energy systems for decades. This week’s Chart Deck also covers the full spectrum of global benchmarks and regional dynamics: 💥 TTF, JKM and Henry Hub price action and volatility (**slides 5-19**) 💥 NWE-TTF basis spreads & EU-Asia tug of war for scarce cargoes (**slides 44-51**) 💥 Asian LNG pricing across oil-indexed, HH-linked and spot channels (**slides 52-58**) 💥 The economics of US LNG exports in distressed global markets (**slides 59-73**) __Ninety-nine slides. Every chart tells a piece of the same story: physical risk is ballooning, and paper markets are asleep at the wheel.__ __You’ve read the overview. Now get the data. Paid subscribers can access the full Chart Deck immediately, including the__ _****TTF Risk Model****_ __’s record-breaking signal, the__ _****Storage-Speculation Nexus****_ __regression outputs, granular vessel tracking, and the__ _****LNG Physical Balance index****_ __that’s flashing its most alarming reading since Energy Flux began publishing it.__ __If you’re a free reader and you’ve been on the fence, this is the week to upgrade. What’s unfolding across the Middle East is not a passing event. It is a structural rupture in global energy supply, and the data in this deck shows exactly how far the market still has to go to price it in.__ 🗝️ Unlock the Chart Deck **👇 DOWNLOAD: 99 slides in .ppsx and .pdf format 👇** ### This post is for subscribers only Become a member to get access to all content Subscribe now

**Here is how you rig a market in broad daylight. Step one: become the President of the United States. Step two: tell your closest friends you are going to say something incendiary about a geopolitical flashpoint that directly affects global commodity prices. Step three: place your bets, and wait for the machines to do the rest**. Prior to Trump 2.0, this might have sounded like a tinpot conspiracy theory. Today, it is a reasonable description of what _appears_ to be happening in commodities and equities markets with alarming frequency at periods of heightened geopolitical tension. Let’s set the scene. Three weeks into the US/Israeli war on Iran, Brent crude and TTF gas futures were struggling to price material supply disruption arising from the closure of the Strait of Hormuz. Despite widespread warnings of an unprecedented supply crisis, bullishness was moderated. Over the weekend, Donald Trump posted a threat to bomb Iran’s power system if it did not re-open the Strait within 48 hours. Iran responded by threatening to destroy civilian energy and desalination infrastructure across the Gulf. Markets braced for a massive escalation in the Middle East energy war. Shortly after markets opened yesterday morning, as the clock ticked towards his own deadline, Trump posted that the United States has postponed its bomb threat by five days after conducting “PRODUCTIVE CONVERSATIONS” with Iran over “A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST.” ## Sign up for 💥 Energy Flux 💥 Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Oil and gas markets tanked. Brent crude fell roughly 10% in seconds. European TTF gas dropped ~12% in sympathy. Equity markets gapped sharply higher on the assumption that a ceasefire, or at minimum a de-escalation, was imminent. Source: ICE The trouble is, highly suspicious trading activity directly preceded the President’s declaration, and the pandemonium triggered by algorithmic execution fed into the chaos by validating the volatility. __This is what happens when the most powerful person on Earth knows that his words will trigger billions in automated trading, before anyone has time to ask if he’s telling the truth.__ __This article explores the relentless pursuit of market efficiency, the incentives that reward speed over precision, and how new technologies create a structural vulnerability for malign actors to exploit — at the cost of genuine energy market participants.__ Unlock the Hot Take ### This post is for subscribers only Become a member to get access to all content Subscribe now

**The Trump administration has well and truly lost control of the situation in the Middle East.** Rapid escalatory attacks and destruction of critical energy infrastructure are unfolding on a scale that defies historical comparison. This spiralling conflict is sowing the seeds of an energy crisis that will dwarf the events of 2021-22. Israel’s initial unprovoked strike on Iran’s South Pars gas field yesterday triggered huge retaliatory attacks on Qatar. QatarEnergy CEO Saad al-Kaabi told Reuters this morning that two of Qatar’s 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged in the unprecedented strikes. The attacks knocked out 12.8 million tons per year (mtpa) of liquefaction capacity, or 17% of Qatar’s LNG supply, for ​**three to five years** , he was quoted as saying. As I reported in last night, amid the most extraordinary and shocking scenes, this is energy warfare that goes beyond military escalation. This is a structural supply shock with cascading consequences for oil, condensate, refined products, LNG and power that energy markets have barely begun to price. Al-Kaabi said Qatar’s exports of condensate will drop by around 24%, while ​liquefied petroleum ⁠gas (LPG) will fall 13%. Helium output will fall 14%, and naphtha and sulphur will both drop by 6%. This is truly the worst-case scenario for energy and fuel markets the world over. As usual, the poorest in society stand first in line to bear the brunt of the economic impacts. Export controls and rationing are already underway in numerous Asian economies. But the scale of supply loss exceeds the ability of governments to manage demand destruction in an orderly fashion. ## Sign up for free to continue reading 💥 Energy Flux 💥 __—__ __fiercely independent energy market analysis__ Subscribe Email sent! Check your inbox to complete your signup. Free newsletter. No spam. Unsubscribe anytime. ### This post is for subscribers only Become a member to get access to all content Subscribe now

**This morning’s Israeli drone strike on Iran’s massive South Pars gas facility crossed a Rubicon in energy warfare, with far-reaching consequences that markets are barely starting to digest.** South Pars is more than a gas field and it affects benchmarks beyond gas. It is the central nervous system keeping Iran’s oilfields alive, the feedstock source for Asia’s petrochemical industry, and the fuel supply behind the majority of Iran’s electricity grid. One processing complex in flames. Every supply chain disrupted, simultaneously. The ripple is already a wave. Iraq’s grid just lost gigawatts. Qatar’s LNG hub took (another) missile strike this afternoon. Europe’s gas benchmark spiked, and still under-priced it. Today’s moves will look modest when physics catches up with markets. #### ****INSIDE THIS RAPID-RESPONSE DEEP DIVE:**** * ****Why oil traders are misreading the strike**** : the pipeline connection that turns South Pars damage into an Iranian crude production problem * ****The condensate supply shock nobody is talking about**** : hundreds of thousands of barrels of Asian petrochemical feedstock that stops when the gas stops * ****Iran’s civilian power grid**** : why this strike accelerates a domestic electricity system collapse that was already underway * ****The regional cascade**** : Iraq, Türkiye, Armenia at risk, and why Qatar might never fully recover its pre-war status as a global LNG kingpin * ****Why today’s price action is**** _****not****_****the repricing event:**** Unusually, markets are trailing physical reality. When they converge, reality will bite the futures curve hard. 💥 __Article stats: 2,200 words, 9-min reading time__ ****The energy situation in Iran is deteriorating by the hour.**** Get credible, deep and instant insight into historic market-moving events with a Premium subscription to __Energy Flux__ 👉 Upgrade to Premium ### This post is for subscribers only Become a member to get access to all content Subscribe now

**When the gas price doubles, European regulatory ambition crumbles. Aside from spiking energy markets, the de-facto closure of the Strait of Hormuz and loss of 20% of global LNG supply has, once again, highlighted Europe’s hopeless fragility in the face of commodity shocks.** The Strait of Hormuz has been effectively closed to commercial vessels for 18 days. QatarEnergy’s force majeure declaration on LNG exports has been in place for just over two weeks. These historic events convulsed energy markets, triggered a dramatic repricing of risk in EU gas markets, delivered spectacular LNG windfall profits, and exposed the ugly reality behind the Trumpian ‘Energy Dominance’ agenda. Hormuz also exposed an inconvenient truth, something Europe has spent four years pretending it had addressed: its structural dependence on imported gas and LNG. The policy architecture designed to accelerate European energy independence is now facing the precise test it was designed for. And Europe’s first instinct is to blink. European leaders are openly discussing softening the EU carbon price and wavering on implementation of methane regulations. At the same time, they are standing firm on the Russian gas ban. The problem is selective conviction. More precisely, Europe is going soft in the wrong places. It is expending political capital on symbolism while weakening the very market mechanisms that offer a genuine path away from energy import dependency. #### ARTICLE SUMMARY * Europe is dismantling the regulatory instruments designed to reduce its exposure to energy supply shocks, in direct response to an energy supply shock. * The one policy the EU is defending unconditionally — the Russian gas ban — is the one that would benefit most from strategic ambiguity. * The ones it is softening — methane MRV, carbon pricing — are the ones that actually build long-term market leverage. * Weakening methane compliance obligations rewards the least transparent LNG producers, signals that import standards are negotiable, and forfeits buyer power that a wave of new global LNG supply should deliver by 2028. * This is what strategic vassalage looks like: not a single capitulation, but a pattern — crisis arrives, short-term relief is purchased by eroding long-term defences, exposure deepens, the next crisis arrives on worse terms. 💥 __Article stats: 2,200 words, 9-min reading time__ ✍️ NO PAYWALL: Sign up for free to continue reading... ### This post is for subscribers only Become a member to get access to all content Subscribe now