# đŸ’„ Energy Flux đŸ’„ > Independent market intelligence on LNG, European natural gas and geopolitical energy risk. Original analysis, proprietary data models and TTF insights. Public Ghost content for AI and LLM tooling. This file includes a bounded export of public pages first, then recent public posts. Append `.md` to any post or page URL to get the content in Markdown (for example, `/example-post.md`). ## Pages ### What is Energy Flux? URL: https://www.energyflux.news/about/ Last updated: 2026-06-10T18:19:26.000Z *Energy Flux* is a market intelligence publication covering global LNG, natural gas and energy commodity markets. It combines specialist journalism with proprietary data tools to give readers an analytical edge on price movements, supply-demand dynamics and the geopolitical forces reshaping energy trade. Founded by veteran energy journalist and analyst [Seb Kennedy](https://www.linkedin.com/in/sebkennedy/?ref=energyflux.news), *Energy Flux* was built to cut through the noise on gas and LNG markets – delivering the analysis, data and context that traders, analysts and decision-makers actually need. Click on the following sections to expand 👇 #### Who is Energy Flux for? **Energy Flux* serves professionals and decision-makers across the LNG and natural gas value chain — traders, analysts, investors, energy companies, legal firms, policymakers and consultancies. But the readership is broad: think-tanks, NGOs, academics and curious individuals who want to understand how gas and LNG markets actually work are all part of the community. Everyone is welcome. #### Why gas and LNG? Gas and LNG remain structural pillars of the global energy system. Natural gas keeps the lights on when renewables fall short, but at significant economic and environmental cost — a tension that defines energy policy debates worldwide. The economics of gas became impossible to ignore after Russia's full invasion of Ukraine in 2022\. Europe's emergency pivot to LNG triggered extreme price volatility that sent shockwaves through global energy markets and squeezed consumers across every gas-reliant segment of the economy. Those dynamics never went away, and returned with a vengeance during the US-Israeli offensive against Iran in 2026. As the marginal generator in most western European power markets, gas typically sets the electricity price. That makes LNG market dynamics essential to understanding the economics of renewables and nuclear — not just gas itself. For upstream producers, global LNG exposure is increasingly attractive. But gas-producing countries that embrace LNG exports often find they are importing higher prices — gobbling up arbitrage at the expense of domestic consumers, with real political consequences. The volume of gas traded as LNG overtook pipeline gas in 2021, and the gap continues to widen. Yet this crucial commodity remains poorly understood: price formation lacks transparency, trade dynamics are opaque and contract structures are complex. **Energy Flux* exists to cut through that opacity — and to make sense of what's driving market sentiment. #### Who runs Energy Flux? **Energy Flux* is written and published by Seb Kennedy, a specialist energy journalist and market analyst with deep expertise in LNG, natural gas pricing, and energy geopolitics. Seb has been writing about energy since 2008, starting as a reporter on the UK renewables beat before covering oil and gas, LNG, hydrogen, market design and climate policy for a range of trade publications and consultancies. He now combines editorial output with proprietary data tools and regular broadcast appearances on international media. Find Seb on LinkedIn [here](https://www.linkedin.com/in/sebkennedy/?ref=energyflux.news). #### What's the editorial position? **Energy Flux* is 100% editorially independent, funded entirely by paying subscribers. There are no corporate sponsors, no advertiser interests and no institutional affiliations shaping the coverage. That said, **Energy Flux* is not opinion-free. Seb's analysis is shaped by a clear-eyed view: over-reliance on LNG exposes consumers to market volatility and geopolitical risk, while undermining climate policy and energy security. Demand reduction, electrification and energy efficiency remain among the most powerful — and most undervalued — tools available to policymakers. That position is balanced by an explicit acknowledgement that gas remains critical to European prosperity and industrial output. Constraining supply too aggressively risks price spikes, energy insecurity, and real economic damage in Europe and beyond. **Energy Flux* brings nuance and rigour to the debate on natural gas in a decarbonising world, while questioning the prevailing narrative that LNG demand growth is guaranteed for decades to come. #### Why subscribe? **Energy Flux* offers something rare in this space: independent, data-driven LNG and gas market analysis with no corporate or ideological agenda. Subscribers receive on average one publication per week, often more when markets are moving fast. Content includes: đŸ’„ The [****Chart Deck**](https://www.energyflux.news/tag/chart-deck/) — data-rich visual analysis of gas and LNG price movements, home to the TTF Sentiment Tracker and TTF Risk Model, as well as the Storage-Speculation Regression Model. đŸ’„ [****Deep Dives**](https://www.energyflux.news/tag/deep-dive/) — long-form essays and stand-alone data investigations exploring under-reported themes across gas, LNG and the wider energy system. đŸ’„ [****Hot Takes** and ****Breaking News**](https://www.energyflux.news/tag/hot-takes/) — instant insight and quick-fire updates on fast-moving energy market events Premium subscribers also get access to: đŸ’„ ****PODCAST Q&A** — submit questions for the mailbag section of [The Energy Flux Podcast](https://www.energyflux.news/tag/podcast/). đŸ’„ ****FLUX EXCHANGE** — comment on all posts and join subscriber-only forum channels in [Flux Exchange](https://exchange.energyflux.news/?ref=energyflux.news), the community forum. Free readers receive paywalled previews and occasional open-access posts. For full access to the archive and the community, take out a [premium subscription](https://www.energyflux.news/#/portal/subscribe) — and support fiercely independent energy market analysis. [Subscribe](#/portal/signup/free) #### Team and group access **Energy Flux* is read on trading desks, in research teams, and across investment and advisory firms. When more than one person at an organisation needs it, group access keeps that simple. - ****Can my colleagues read Energy Flux too?** Yes. Group access is available on the Premium tier, with each member getting a full annual subscription and access in their own name — every edition, the weekly Chart Deck, bespoke Deep Dives, and all the proprietary models. - ****How many users can I include?** Group access starts at two, with no upper limit. Larger desks can be accommodated — just [let us know](mailto:hello@energyflux.news) how many seats you need. - ****Is there a discount for multiple users?** Pricing is quoted per team and scales with size: the more users, the lower the per-user rate. It is billed annually as a single invoice, which keeps procurement straightforward. - ****How is it set up?** Group subscriptions are arranged directly rather than through the website checkout, so each one is priced and set up by hand. [Send us your team size](mailto:hello@energyflux.news) and we’ll come back with a quote. [Get in touch](mailto:hello@energyflux.news) ### Media appearances URL: https://www.energyflux.news/media-appearances/ Last updated: 2026-06-15T03:07:46.000Z **I love talking energy.** Here’s an evergreen list of recent podcast and media appearances. If you want to book me for a slot, [get in touch](mailto:seb@energyflux.news). --- ### Al Jazeera - **US-Iran peace MoU:** “There is a war of words to control market narrative and sentiment. We are going to enter another extraordinarily volatile period for energy prices as the real negotiations begin.” – interview about the likely market impact of a memorandum of understanding (MoU) reportedly signed between the US and Iran. June 2026 – [watch on YouTube](https://www.youtube.com/watch?v=fzSwC8Rv7Fw&ref=energyflux.news) --- ### Al Jazeera - **War in Iran:** “Without regime change, Iran will be like the Sword of Damocles hanging over Gulf energy exports” – discussing the ongoing diplomatic efforts to restore Hormuz transits. April 2026 – [watch on YouTube](https://www.youtube.com/watch?v=4eAmiHJ-DpQ&ref=energyflux.news): --- ### Al Jazeera - **War in Iran:** “This is already a nightmare scenario for the global energy system” – discussing the likely impacts of further military escalation targeting Gulf energy infrastructure. March 2026 – [watch on YouTube](https://www.youtube.com/watch?v=9cHwc4-CFpo&ref=energyflux.news): --- ### TRT World - **Middle East energy war:** How the intensifying conflict threatens grave economic consequences and casts a long shadow over Gulf oil and gas exports. March 2026 – [watch on YouTube](https://www.youtube.com/watch?v=pEwUa1eL9Qg&ref=energyflux.news): --- ### Al Jazeera - **War in Iran:** How will a prolonged closure of the Strait of Hormuz affect global energy markets? March 2026 – [watch on YouTube](https://www.youtube.com/watch?v=cD9UjY5uHjg&ref=energyflux.news): --- ### Sky News - **Iran war: Markets are plummeting as the conflict escalates – but some industries stand to benefit:** *Energy Flux* research on US LNG windfall profits was featured in an [online multimedia report](https://news.sky.com/story/bluesky-13516947?ref=energyflux.news) (see video embed at top of page): [Iran war: Markets are plummeting as the conflict escalates - but some industries stand to benefitMr Trump has always aimed to boost “US energy dominance”. This conflict has nothing to do with it, but there’s a handful of energy companies that stand to benefit.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/apple-touch-icon-1.png)SkyVictoria Seabrook![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/skynews-venture-global-usa_7186338.jpg)](https://news.sky.com/story/bluesky-13516947?ref=energyflux.news) --- ### Transmission (Modo Energy) - **Why Natural Gas Prices In The US Just Jumped 70%**: Conversation with Ed Porter about the January 2026 winter price surge, LNG trade & geopolitics, the LNG fallout from Pakistan's solar boom, and the sorry tale of Venezuelan gas flaring. February 2026: --- ### The Jolt (Foresight Climate & Energy) - **Venezuela’s Energy Gold Rush**: Conversation with Kira Taylor about energy geopolitics, and the immense wasted opportunity inherent in Venezuelan gas flaring. January 2026: [Venezuela’s energy gold rushIn today’s episode of The Jolt, Kira looks at how Venezuela’s energy reserves have become caught up in geopolitics, plus China’s thermal power generation drops![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/touch-icon-180x180.png)ForesightKira Taylor![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/brittcreative_Editorialstyle_illustration_depicting_oil_tanker_9cb529f36f7c4d6593b29b7e21c35a94.png)](https://foresightmedia.com/story/stkSFfk6-meRpzvR6-26b3f?ref=energyflux.news) --- ### Cleaning Up - **Demand Destruction & Oversupply**: How Gas Prices Are Reshaping The World, with Baroness Bryony Worthington. December 2025: [Demand Destruction & Oversupply: How Gas Prices Are Reshaping The World | Ep236: Seb KennedyWhat happens when a nation’s energy security rests on volatile global gas markets? Why does the UK pay market prices for some of the world’s cheapest-to-produce gas
![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/cu-logo-bg-square-3000px-new-strapline.jpg)Cleaning Up: Leadership in an Age of Climate Change![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/d3JkV9HUfPnp4KVwfro8VR1Qv01v1G7GhHC0RqQ_J38-)](https://www.cleaningup.live/demand-destruction-oversupply-how-gas-prices-are-reshaping-the-world-ep236-seb-kennedy/?ref=energyflux.news) - Alternative title: **Why Does the UK Pay So Much For Cheap-to-Produce Gas?** We discuss the op-ed Bryony co-wrote in *Energy Flux* ([link](https://www.energyflux.news/uk-norway-gas-trade-time-for-a-new-deal/)). --- ### The Pexapark Podcast - **From Backbone to Back up?** Understanding Gas’s Role in Setting Future Power Prices, with Luca Pedretti (April 2025): --- ### Redefining Energy - **The Future Growth of LNG**, with Laurent Segalen and Gerard Reid (January 2025): --- ### Carbon Trading Chronicles - **Gas, Carbon, and the Geopolitical Web**, by Vertis (January 2024): --- ### The Commodity Playbook **Gas Market Shake-up**, with EklipX Research (November 2024): --- ### Energi Talks - **The Role of Gas in a Renewables-Heavy Power Grid**, with Markham Hislop (November 2024): --- ### Transmission - **Natural gas and power prices,** by Modo Energy (September 2024): --- ### GB News - **Russia’s Antarctic oil ‘discovery’,** with Jacob Rees-Mogg (May 2024): - **The future of North Sea energy,** with Jacob Rees-Mogg (November 2023): ### Flux Exchange: login URL: https://www.energyflux.news/sso/ Last updated: 2026-05-04T18:31:06.000Z Access to the **Flux Exchange** forum requires being a member (free or paid). [Sign up for free ✍](#/portal/signup/free) [Log in đŸȘ”](#/portal/signin) 🔃 Then refresh this page. Logging you in, please wait... ### Welcome to the Inner Circle – let’s go deeper 🔎 URL: https://www.energyflux.news/welcome-to-the-inner-circle-lets-go-deeper/ Last updated: 2026-07-21T06:08:03.000Z đŸ”„ Your subscription benefits in full đŸ”„ _This page is for paying subscribers only._ ### CHART DECK: Bear market spells trouble for LNG exporters URL: https://www.energyflux.news/bears-tighten-grip-on-ttf-2/ Last updated: 2025-12-04T14:12:58.000Z Welcome back to *Energy Flux*. I’ve been on the road all week so this issue is a little thinner than usual. But I did carve out time to update the **Chart Deck** because the market is moving further into bearish territory. All data points in [this week’s unmissable slide deck](https://www.energyflux.news/bears-tighten-grip-on-ttf/) confirm the EU gas market is in the throes of a deep LNG glut bear cycle. The global LNG market is now **oversupplied by 2.4 million tonnes**, up from 1 mt just a week earlier, as surging supply outstrips demand growth. The dramatic collapse in China’s LNG imports combined with accelerating supply growth are eclipsing Europe’s increased imports, inflating the physical surplus. Demand simply cannot keep up, and this is barely the thin end of the glut wedge. Investment funds deepened their net short position in TTF futures last week to -50 TWh. While this is by no means a shock, it does raise further risks of a [sudden whipsaw to the upside](https://www.energyflux.news/beware-complacency/) if a winter shock triggers a bout of short covering. If you want the full picture of how trader sentiment, market risks, economics and cargo flows are lining up as winter unfolds, it’s all in this jam-packed datavis-heavy Chart Deck (plus free market commentary): [Bears tighten grip on TTFEU gas bear market spells trouble for LNG exporters | Chart Deck — 4 Dec 2025![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/EF_square_tight-16.jpg)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/Bear-sinks-LNG-1-2.jpg)](https://www.energyflux.news/bears-tighten-grip-on-ttf/) --- ## 🎧 PODCAST: Demand destruction & oversupply I was on the **Cleaning Up podcast** this week, talking with Baroness Bryony Worthington about macro shifts in global gas markets and the outlook for the UK energy sector. We covered a lot of ground, so make a coffee and grab your headphones: The episode is also available on [Spotify](https://open.spotify.com/episode/57J9GVNLxytiMsNNuPjc41?ref=energyflux.news) and [Apple](https://podcasts.apple.com/us/podcast/why-does-the-uk-pay-so-much-for-cheap-to-produce-gas/id1524683327?i=1000739549778&ref=energyflux.news), or wherever you get your podcasts. We discussed Bryony’s recent op-ed in *Energy Flux* about the UK’s relationship with Norway, where she argued for a new long-term deal focussed on energy affordability and demand certainty. If you missed it, that piece is free to read here: [UK-Norway gas trade: Time for a New Deal?If we want to avoid populist parties weaponising energy prices we need to think differently, starting with trade relationships between the UK and Norway.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/EF_square_tight-12.jpg)đŸ’„ Energy Flux đŸ’„Bryony Worthington![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/UK-Norway-energy-prices-ele-1.jpg)](https://www.energyflux.news/uk-norway-gas-trade-time-for-a-new-deal/) --- ## Mozambique LNG soldiers on regardless The partners in the Mozambique LNG project are digging deep to cover the cash shortfall created by the withdrawal of UK and Dutch export finance. TotalEnergies has [agreed with project partners to stump up more cash](https://totalenergies.com/news/press-releases/mozambique-lng-clarification-totalenergies-financing-project?ref=energyflux.news) after British and Dutch export credit agencies UK Export Finance and Atradius pulled $2.2 billion in preferential loans for the project, representing 10% of external financing. As documented in *Energy Flux* earlier this year, Mozambique LNG is of critical importance to the country due to the sovereign debt arrangements that backstop the state’s involvement in the development. Read more about why Maputo and the US EXIM Bank are persevering with this deeply troubled project in this **Deep Dive** from April: [The unstoppable tragedy of Mozambique LNGDEEP DIVE: Neither Trump nor Mozambique can afford \*not\* to build this $20 billion megaproject — human rights abuses be damned![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/EF_square_tight-11.jpg)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/https-3a-2f-2fsubstack-post-media-s3-amazonaws-com-2fpublic-2fimages-2fa9029588-ff5f-411d-9dce-aed2f88c707b_1024x608-png-3.jpg)](https://www.energyflux.news/the-unstoppable-tragedy-of-mozambique/) --- ## Oz LNG: a cautionary tale A decade after Australia’s LNG export boom, the country is still dealing with the fallout from soaring prices and industrial bankruptcies. Now, the Labour government is reportedly [poised to unveil](https://www.smh.com.au/politics/federal/labor-set-to-make-major-intervention-to-keep-gas-in-australia-20251203-p5nkja.html?ref=energyflux.news) a new east coast gas reservation scheme that would cap or limit LNG exports to overseas markets such as Japan, a major buyer of Australian LNG. I’ve written extensively about the risk of [political backlash](https://www.energyflux.news/us-lng-vs-america-first/) from uncontrolled expansion of LNG exports. The Australian experience is probably worth keeping in mind as the United States gears up for its own rapid increase in Gulf Coast LNG export capacity between now and 2030... [US LNG vs ‘America first’DEEP DIVE: Can Trump maximise American gas exports without infuriating the MAGA crowd?![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/EF_square_tight-14.jpg)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/https-3a-2f-2fsubstack-post-media-s3-amazonaws-com-2fpublic-2fimages-2f3af7614b-0d42-4ef6-8749-29a35a6bf9eb_1792x1024-jpeg-2.jpg)](https://www.energyflux.news/us-lng-vs-america-first/) That’s all for this week. Thanks for reading. —Seb ### [Redirect] The Energy Flux podcast URL: https://www.energyflux.news/energy-flux-on-air/ Last updated: 2025-12-22T17:39:10.000Z This page has moved. If you are not redirected automatically, [click here](https://www.energyflux.news/the-energy-flux-podcast/). ### Hormuz Closure LNG Supply Impact Model URL: https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/ Last updated: 2026-04-25T14:46:13.000Z The **Hormuz Closure LNG Supply Impact Model** is a premium interactive scenario tool built by *Energy Flux* to help readers quantify how the Iran war, Strait of Hormuz disruption, damaged Qatari LNG capacity and the global wave of new LNG projects could reshape supply balances over time. Adjust key assumptions such as Hormuz reopening timelines, flow restoration rates, Qatar's LNG output recovery, global LNG project start dates and ramp-up speeds – and then track the impact on lost supply, replacement capacity and cumulative market balances. For more background on the model and a discussion of the base case outputs, see [this Deep Dive post](https://www.energyflux.news/war-vs-glut-the-great-lng-reckoning/) (free to read, no paywall): [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?![](https://static.ghost.org/v5.0.0/images/link-icon.svg)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/Hormuz-Hero-image-Games-Con.jpg)](https://www.energyflux.news/war-vs-glut-the-great-lng-reckoning/) And here is a YouTube tutorial that explains in more detail how to use the model: The model itself is available only to paid, logged-in subscribers on the Deep Dive and Premium subscription tiers 👇 ****Subscribe now to unlock the full model** Cut through one of the most consequential periods of uncertainty the LNG market has ever faced, using a framework you can interrogate, stress-test and adapt as events unfold. 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If access is granted before payment is received, this does not waive *Energy Flux*’s right to payment. ### Purchase orders If your organisation requires a purchase order number, vendor onboarding process, procurement approval or similar internal process, you are responsible for arranging this promptly. Your internal procurement requirements do not delay or reduce your obligation to pay an invoice by its due date unless *Energy Flux* has expressly agreed otherwise in writing. ### Taxes Fees are exclusive of VAT, sales tax, withholding tax, transfer tax, duties and similar taxes unless stated otherwise. You are responsible for all applicable taxes, except taxes based on *Energy Flux*’s income. If you are required by law to withhold or deduct tax from any payment, you must increase the payment so that *Energy Flux* receives the full amount it would have received had no withholding or deduction been required, unless prohibited by law. ## 5\. 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A renewal becomes binding when accepted by the Customer, paid by the Customer, confirmed in writing by the Customer, or otherwise agreed between the parties. *Energy Flux* may suspend access when an invoice-based subscription expires or remains unpaid. ## 6\. No Refunds Except where required by applicable law or expressly agreed by *Energy Flux* in writing, all subscription payments are final and non-refundable. You acknowledge that *Energy Flux* provides digital content and services that may be made available immediately after purchase, subscription activation, invoice acceptance or account creation. Where you are a consumer and applicable law gives you a cancellation right, immediate access to digital content may only begin where you expressly request immediate supply and acknowledge that you may lose your statutory right to cancel once supply begins. Nothing in these Terms affects any statutory rights that cannot lawfully be excluded or limited. ## 7\. 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Third-Party Content and Links *Energy Flux* content may reference, cite, summarise or link to third-party data, reports, websites, platforms, publications, exchanges, agencies or other external sources. *Energy Flux* does not control and is not responsible for third-party content, data, availability, methodology, accuracy, licensing terms, security or privacy practices. Your use of third-party resources is at your own risk and may be subject to separate terms and conditions. ## 13\. Forward-Looking Statements, Forecasts and Scenario Analysis *Energy Flux* Materials may contain forward-looking statements, forecasts, projections, assumptions, scenario analyses, model outputs, estimates or opinions about future events. These reflect the author’s views and assumptions at the time of publication and are inherently uncertain. 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Subject to the above, Energy Flux Limited, its directors, officers, employees, contributors, contractors and affiliates shall not be liable for any direct, indirect, incidental, special, consequential, exemplary or punitive damages, or any loss of profits, revenue, goodwill, anticipated savings, contracts, business, opportunity, data, use, reputation or market position, arising out of or in connection with: - your use of, or reliance on, any *Energy Flux* Materials; - any trading, investment, hedging, procurement, policy, operational or commercial decision; - any errors, omissions, inaccuracies, delays or interruptions; - any third-party content, data, platform, service or website; - any market movement, price movement, supply disruption, regulatory action or geopolitical event; - any unauthorised access, credential sharing or misuse of your account; or - any suspension, withdrawal, discontinuation or modification of the service. For business customers, the maximum amount Energy Flux Limited may be required to pay in respect of all claims arising out of or in connection with these Terms, any Order, any subscription, and the Customer’s or any Authorised User’s use of *Energy Flux* shall be limited to the total fees actually paid by the Customer to *Energy Flux* for the relevant subscription during the 12 months preceding the event giving rise to the claim. For consumers, nothing in these Terms affects statutory rights that cannot lawfully be excluded or limited. ## 19\. Termination and Suspension *Energy Flux* may suspend, restrict or terminate access immediately, without notice and without refund, if it reasonably believes that you or any Authorised User have: - breached these Terms; - failed to pay any amount when due; - shared credentials or access links; - allowed unauthorised access; - redistributed, copied, scraped or misused Materials; - exceeded the scope of your subscription or licence; - initiated a false, abusive or bad-faith chargeback or payment dispute; - used *Energy Flux* in breach of applicable law; or - acted in a way that may harm *Energy Flux*, its systems, its intellectual property, its reputation or its commercial interests. Termination or expiry of your subscription does not affect any rights or obligations that accrued before termination or expiry. Clauses concerning intellectual property, payment obligations, restrictions, confidentiality, no investment advice, disclaimers, limitation of liability, governing law and jurisdiction shall survive termination or expiry. ## 20\. Force Majeure *Energy Flux* shall not be liable for any delay, failure, interruption or non-performance caused by events beyond its reasonable control, including but not limited to failure of hosting providers, payment processors, email service providers, analytics providers, data vendors, internet infrastructure, cyber incidents, power outages, strikes, regulatory actions, war, terrorism, civil unrest, natural disasters, pandemics or other events outside its reasonable control. ## 21\. Notices *Energy Flux* may contact you by email, through the website, through your account, through invoice correspondence, or by any other contact method you have provided. You are responsible for keeping your contact details accurate and up to date. Formal notices to *Energy Flux* should be sent to the contact details provided on the *Energy Flux* website or to any other address notified by *Energy Flux* for that purpose. ## 22\. Modifications to These Terms *Energy Flux* may update these Terms from time to time. Continued use of *Energy Flux* after updated Terms take effect constitutes acceptance of the revised Terms. Material changes will be communicated by the website, email or another reasonable method. If you do not agree to the revised Terms, you must stop using *Energy Flux* and, where applicable, cancel your subscription before the next renewal date. ## 23\. Assignment You may not assign, transfer, sublicense or delegate any subscription, licence, account, Order or rights under these Terms without prior written consent from *Energy Flux*. *Energy Flux* may assign or transfer its rights and obligations under these Terms in connection with a merger, acquisition, restructuring, sale of assets, corporate reorganisation or transfer of business. ## 24\. Severability If any provision of these Terms is held to be invalid, unlawful or unenforceable, the remaining provisions shall continue in full force and effect. The invalid, unlawful or unenforceable provision shall be deemed modified to the minimum extent necessary to make it valid, lawful and enforceable, or, if that is not possible, shall be treated as deleted. ## 25\. Entire Agreement These Terms, together with our Privacy Policy and any applicable Order, invoice, licence agreement, enterprise agreement or written agreement, constitute the entire agreement between you and Energy Flux Limited with respect to your access to and use of *Energy Flux*. They supersede all previous discussions, correspondence, representations, understandings or agreements relating to the same subject matter. ## 26\. Governing Law and Jurisdiction These Terms, any Order, and any dispute or claim arising out of or in connection with them shall be governed by and construed in accordance with the laws of England and Wales. The courts of England and Wales shall have exclusive jurisdiction over any dispute or claim arising out of or in connection with these Terms, any Order, or your use of *Energy Flux*, subject to any mandatory consumer law rights that apply in your country of residence. *For billing, subscriptions, and all other enquiries,* [*email us by clicking here*](mailto:hello@energyflux.news)*.* [Return to Home Page](https://energy-flux.ghost.io/?ref=energyflux.news) ### Chart Deck download help URL: https://www.energyflux.news/chart-deck-download-help/ Last updated: 2026-08-18T10:08:48.000Z Download support # Deck won’t download? The Chart Deck is a large file — around **20MB** — and downloads fail in one of two ways. Either something between your device and our server blocks it outright, which usually shows an error the moment you click; or the transfer starts and then stops partway, which happens on an unsteady connection. The steps below cover both, and the first two clear most cases. --- 1. ## Try it again Refresh the page, check you’re still signed in to Energy Flux, then click download once. WhySign-in sessions expire after a few minutes. A fresh click gets a fresh one, and this alone fixes a good share of failures. 2. ## Check your browser’s downloads Fastest check Open your browser’s download list — **Ctrl+J** on Windows, **⌘+J**on a Mac. If the deck is listed but stalled or incomplete, click retry there. WhyDownloads run through your browser’s own download manager, so a broken transfer can be resumed rather than started over. This also tells you which problem you have: a download that appears and stalls is a connection issue, while nothing appearing at all points to something blocking it. 3. ## Move to a steadier connection If the download keeps stopping partway, switch from mobile data to wifi — or to any connection that holds steady — and try again. WhyA 20MB file needs the connection to stay up for several seconds. A brief drop is enough to interrupt it, which is common on mobile networks. 4. ## Come off the VPN or work network Switch off any VPN, or move to a different connection — home wifi, or your phone’s hotspot — then retry. WhyCorporate security tooling is the most common cause of a download that fails instantly rather than stalling partway. 5. ## Use a private window Open the post in a private or incognito window and download from there. WhyPrivate windows run with extensions switched off. If it works, an ad blocker or privacy extension was the culprit. 6. ## Try a different browser Download in another browser — Chrome, Firefox, Safari or Edge. WhyOccasionally one browser’s settings block the file while another lets it straight through. Still no luck ## We’ll send it across directly. Some corporate networks are locked down tight and you simply can’t change them. Don’t lose any more time on it — email us and we’ll send the deck straight to you as an attachment. [Email us for the deck → ](mailto:hello@energyflux.news?subject=Chart%20Deck%20download) Tell us which edition you need and we’ll reply with the file. ### Privacy Notice URL: https://www.energyflux.news/privacy/ Last updated: 2026-07-27T22:29:38.000Z *Last updated: 22 July 2026* ## Who we are *Energy Flux* is operated by **Energy Flux Limited** (“we”, “us”), a company registered in England & Wales (company no. **16021701**; registered office: 60 Tottenham Court Road, Suite 5194a, Fitzrovia, London, W1T 2EW), which is the **data controller** for the personal data described in this notice. *Energy Flux* is an independent, subscription-based research service covering European natural gas and LNG markets, and global energy geopolitics. This notice explains what personal data we collect about our readers, subscribers and forum members, why we hold it, who we share it with, and the rights you have over it. It applies to [**www.EnergyFlux.news**](https://www.energyflux.news/), our newsletters, the **Flux Exchange** community forum at [**www.exchange.EnergyFlux.news**](https://exchange.energyflux.news/?ref=energyflux.news), and any gated or free content we deliver through these and other related channels. **Contact for anything in this notice, or to exercise your rights:** - [hello@energyflux.news](mailto:hello@energyflux.news) - Energy Flux Limited, 60 Tottenham Court Road, Suite 5194a, Fitzrovia, London, W1T 2EW. 📖 **This Privacy Notice should be read in conjunction with our* [**Terms of Service*](https://www.energyflux.news/terms-of-service/)**.* ## The data we collect | Category | Examples | Where it comes from | | ------------------------------- | ------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | | **Identity & contact** | Name, email address | You, when you subscribe or sign up | | **Account & subscription** | Tier, subscription status, sign-up date, member since | Created as you use the service | | **Payment** | Billing name, country, card type/last-4, invoices — **full card details are held by Stripe, not by us** | You, via Stripe at checkout | | **Newsletter engagement** | Whether emails are delivered, opened, and which links are clicked | Automatically, as emails are sent | | **Forum activity** | Username, profile, posts, and technical logs including IP address | You, when you use Flux Exchange | | **Website & device** | Pages viewed, approximate location, device/browser, cookie identifiers, truncated IP | Automatically, via analytics cookies (with your consent) | | **Content downloads** | Which gated decks/PDFs you download, and when | Automatically, via our delivery system | | **Correspondence** | Emails and messages you send us | You | | **Enrichment** (where we do it) | Publicly available professional information about a subscriber or their organisation | Public sources — see the note below | **A note on enrichment.** From time to time we may supplement subscriber records with professional information from **public sources** (for example, a subscriber’s stated organisation) to understand our readership and tailor coverage. Where we do this we rely on our **legitimate interests**, we assess that this is not overridden by your rights, and you can object at any time (see *Your rights*). We do not build sensitive profiles and we do not make decisions about you by solely automated means that produce legal effects. ## Why we use your data, and our lawful basis | Purpose | Data used | Lawful basis | | -------------------------------------------- | ------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------- | | Send the newsletter you signed up for | Identity, contact, engagement | **Consent** (which you can withdraw at any time) | | Provide and manage a **paid** subscription | Identity, account, payment | **Contract** | | Take payment and keep financial records | Payment, transaction records | **Contract** and **legal obligation** (tax/accounting) | | Run and secure the forum | Forum activity, technical logs | **Contract/consent** (to participate) and **legitimate interests** (security) | | Measure and improve content and website | Engagement, website/device | **Consent** (analytics cookies) and **legitimate interests** | | Understand our readership (incl. enrichment) | Account, enrichment | **Legitimate interests** | | Tell you about our paid subscriptions | Identity, contact, engagement | **Legitimate interests** (promoting our own service to existing readers) and, where required, your **consent**. You can opt out at any time | | Protect the service from abuse and fraud | Download logs, technical logs | **Legitimate interests** | | Reply to your enquiries | Correspondence | **Legitimate interests** | Where we rely on **legitimate interests**, we have weighed our interest against your rights and freedoms; you can ask us for that assessment. ## Marketing and your consent We send the newsletter on the basis of your **opt-in consent**. If you are an existing paying subscriber, we may also send you closely related updates about the service on the basis of the **soft opt-in** permitted by the UK’s PECR. We also sometimes contact readers directly about our **paid subscriptions** — for example, if you read us regularly on the free list. We keep a record of those conversations (see *Google Workspace* below). Where you are a **business contact**, we rely on our legitimate interests in promoting our own service; where consent is required, we rely on your consent. **Every** marketing email carries a working unsubscribe link, and you can opt out at any time — including from the paid-subscription emails while continuing to receive the newsletter, or vice versa. We act on it promptly and keep a minimal record of your email solely to make sure we honour that choice. ## Cookies and analytics We use a small number of cookies. Strictly necessary cookies (for login, sessions and security) are always on. **Non-essential cookies** (for Google Analytics) **are set only with your consent**, which you give (or decline, or later change) via our cookie banner. You can change your choice at any time using the “Cookie settings” option on this site. Google Analytics is configured to truncate IP addresses and to retain user-level data for a limited period. ## Who we share your data with **We never, ever sell your personal data.** That would be immoral and probably illegal. We share it only with the service providers (“processors”) that run *Energy Flux* on our behalf, each under a data-processing agreement, and only as needed to deliver the service. | Provider (and group entity) | What it does for us | Data involved | Where it is processed, and safeguard | | ------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **Ghost(Pro)** — Ghost Foundation Ltd | Website, membership database, newsletter sending | Identity, contact, account, engagement | Stored in the **EU** (Amsterdam). Any provider access from outside the EU is covered by **Standard Contractual Clauses** | | **Stripe** — Stripe Payments Europe Ltd (Ireland) | Payment processing for paid tiers | Billing name, email, country, card data (held by Stripe), invoices | **EU and US**, under the **EU-US Data Privacy Framework (UK Extension)** and SCCs. Stripe also acts as its **own controller** for payments, fraud prevention and legal compliance | | **Zapier** — Zapier, Inc. (US) | Automations linking our forum, social accounts and internal tools | Public forum-post content (incl. author username) | **US**, under the **Data Privacy Framework (UK Extension)** and SCCs / UK Addendum | | **DigitalOcean** — DigitalOcean, LLC (US) | Hosts our sign-in bridge between site and forum | Account identifiers | **EU/UK region**; provider transfers under the **Data Privacy Framework (UK Extension)** and SCCs | | **Communiteq** (Netherlands) | Hosts the Flux Exchange forum | Username, email, posts, IP | **EU** (Frankfurt); no transfer outside the EEA | | **Google** — Google Ireland Ltd | Website analytics (GA4) — set only with your consent | Device/behaviour, cookie ID, truncated IP | **EU and US**, under the **Data Privacy Framework (UK Extension)** and SCCs | | **Google Workspace** — Google Ireland Ltd | Our email, documents, and the spreadsheet we use to keep track of reader relationships | Name, email address, subscription status, and our own notes about our contact with you | **EU and US**, under Google’s **Cloud Data Processing Addendum** and the **Data Privacy Framework (UK Extension)** / SCCs | | **Cloudflare** — Cloudflare, Inc. (US) | Content delivery, security, gated-file delivery | IP address, download logs | Gated files and logs pinned to the **EU**; edge traffic is global; transfers under the **Data Privacy Framework (UK Extension)** and SCCs | | **Anthropic** (Claude) — Anthropic Ireland Ltd, with processing by Anthropic PBC (US) | AI assistance for internal readership analysis and for drafting | Subscriber records provided for a specific task — typically name, email address, subscription tier and status, and newsletter engagement. **Never** payment card details, passwords, or special-category data | **US**, under **Standard Contractual Clauses** and the UK Addendum. Under our business terms, inputs are **not used to train AI models** | **A note on our use of AI.** We use AI tooling (Claude, provided by Anthropic) for internal work — principally understanding readership patterns, and drafting. We provide only the minimum data needed for the task in hand, under **business terms that prohibit our data being used to train AI models**. We do not input payment details, passwords, or special-category data, and we do not use AI to make automated decisions about you. A human reviews any conclusion that affects what we do. Where a provider processes data outside the UK/EEA, we rely on an approved safeguard such as the provider’s certification under the **EU-US Data Privacy Framework (and its UK Extension)**, the **UK International Data Transfer Agreement / Addendum**, or **Standard Contractual Clauses**. You can ask us which applies to a given provider. ## How long we keep your data We keep personal data only as long as we need it. In summary: subscriber contact data for as long as you are subscribed (and a short window after); billing records for the period tax law requires; forum data while your account is active; and analytics for a limited window. Our full schedule is set out in our Data Retention Policy, which is available on request. When data is no longer needed, we delete or anonymise it. ## Your rights Under UK and EU data-protection law you have the right to: - **be informed** about how we use your data (this notice); - **access** the personal data we hold about you; - **rectify** inaccurate data; - **erase** your data (“right to be forgotten”), subject to legal-retention exceptions; - **restrict** or **object** to certain processing — including an **absolute right to object to direct marketing**, which we always honour; - **data portability** — receive your data in a portable format; - **not be subject** to solely automated decisions with legal or similarly significant effects (we do not make such decisions about you); and - **withdraw consent** at any time, where we rely on consent. To exercise any of these, contact us at [hello@energyflux.news](mailto:hello@energyflux.news). We respond within one month. There is normally no charge for reasonable requests. You also have the right to complain to the **Information Commissioner’s Office (ICO)** at [ico.org.uk](https://ico.org.uk/?ref=energyflux.news), although we would appreciate the chance to resolve any concern first. If you are in the EU, you may complain to your local supervisory authority. ## Security We take reasonable technical and organisational measures to protect your data, and we work only with providers that offer appropriate security. No system is perfectly secure, but we design our processes to minimise the data we hold and to limit who and what can access it. ## Children *Energy Flux* is a professional research service intended for adults. It is not directed at children, and we do not knowingly collect data from anyone under 18. ## Changes to this notice We may update this notice as our service or the law changes. We will post the updated version here with a revised date, and for material changes tell subscribers by email. ### Welcome to Premium — start here URL: https://www.energyflux.news/welcome-to-premium-start-here/ Last updated: 2026-08-17T16:24:09.000Z Your subscription is active and everything is unlocked. Here’s where to begin. _This page is for subscribers on the Premium tier only._ ### Welcome to the Chart Deck — start here URL: https://www.energyflux.news/welcome-to-chart-deck-start-here/ Last updated: 2026-08-17T16:17:40.000Z Your subscription is active. Let’s get you into the data. _This page is for subscribers on the Chart Deck and Premium tiers only._ ### Welcome to the Deep Dives — start here URL: https://www.energyflux.news/welcome-to-the-deep-dives-start-here/ Last updated: 2026-07-21T06:04:36.000Z Your subscription is active. Let’s get into the analysis. _This page is for subscribers on the Deep Dives and Premium tiers only._ ### [Redirect] Chart Deck URL: https://www.energyflux.news/chart-deck-2/ Last updated: 2026-08-17T14:43:36.000Z This page has moved. If you are not redirected automatically, [click here](https://www.energyflux.news/tag/chart-deck/). ### The EU Gas Winter Stress Tester (2026-27) URL: https://www.energyflux.news/the-eu-gas-winter-stress-tester-2026-27/ Last updated: 2026-09-02T12:28:43.000Z INTERACTIVE DATA MODEL The ****EU Gas Winter Stress Tester** calculates how much more supply (or less demand) Europe’s gas market would need to keep storage levels within the seasonal range, under user-defined market conditions. 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 model is available exclusively to paid subscribers on any subscription tier (Chart Deck, Deep Dive, or Premium). For instant access, join hundreds of subscribers and unlock the [entire paywalled archive](https://www.energyflux.news/page/2/). [👉 Upgrade to Premium 👈 ](#/portal/account/plans) _This page is for paying subscribers only._ ### TTF Risk Cube URL: https://www.energyflux.news/ttf-var-risk-cube/ Last updated: 2026-09-09T15:18:23.000Z INTERACTIVE DATA MODEL · UPDATED WEEKLY The ****TTF Risk Cube** plots every weekly investment-fund position in ICE Endex TTF futures since 2019 in three dimensions: net position on one axis, market volatility on another, and the euro value-at-risk the two produce as height. Rotate, zoom and hover to read any week; isolate a single year from the legend; switch between the full history and the post-2023 window. The record week and the latest print are flagged, so the current position can be placed against everything that came before it — and the same position can be seen carrying very different risk in calm and in volatile markets. The model is updated every week and is available exclusively to paid subscribers on the Chart Deck and Premium subscription tiers. For instant access, join hundreds of subscribers and unlock the entire paywalled archive. [👉 Upgrade to Premium 👈 ](#/portal/account/plans) _This page is for subscribers on the Chart Deck and Premium tiers only._ ### TTF Risk Spine URL: https://www.energyflux.news/ttf-var-risk-spine/ Last updated: 2026-09-09T15:18:24.000Z INTERACTIVE DATA MODEL · UPDATED WEEKLY The ****TTF Risk Spine** takes the value-at-risk carried by investment funds’ net position in ICE Endex TTF futures and splits it exactly into the only three things that can move it: how big the book is, what natural gas costs, and how much the market is moving. Each week’s reading is stated against a fixed “normal week” and the P90 ceiling — the level only one week in ten has exceeded — so you can see at a glance whether risk rose because funds added length or because the market got rougher underneath them. Every bar, flag and figure is regenerated from the latest ESMA/ICE Commitments of Traders report, with history back to 2019. The model is updated every week and is available exclusively to paid subscribers on the Chart Deck and Premium subscription tiers. For instant access, join hundreds of subscribers and unlock the entire paywalled archive. [👉 Upgrade to Premium 👈 ](#/portal/account/plans) _This page is for subscribers on the Chart Deck and Premium tiers only._ ## Posts ### The TTF options paradox, explained URL: https://www.energyflux.news/the-ttf-options-paradox-explained/ Last updated: 2026-09-08T07:00:52.000Z **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 optionsthe number we have always used | 369 | 149 | 219 | | Futures only | 321 | 189 | 133 | | Held through optionsthe 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/09/01_options_split_dumbbell.png) 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. đŸ’„ **Article stats:* 2,600 words, 10-min reading time, 7 charts and tables* _This post is for paying subscribers only._ ### Europe rolls the dice on winter gas URL: https://www.energyflux.news/europe-rolls-the-dice-on-winter-gas/ Last updated: 2026-09-01T10:58:13.000Z 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](https://www.edison.it/en/edison-qatarenergy-extends-force-majeure-additional-5-lng-cargoes?ref=energyflux.news) 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/08/TTF-curve-MOM.png) If anything, the surprise is that it took this long. Regular readers will be familiar with the *Energy Flux* position on the [intractability](https://www.energyflux.news/the-market-that-cried-peace/) of the Hormuz crisis, and on the [blasĂ© confidence](https://www.energyflux.news/the-great-gas-risk-mispricing/) 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%. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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**](https://www.energyflux.news/the-eu-gas-winter-stress-tester-2026-27/), 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](https://www.energyflux.news/the-eu-gas-winter-stress-tester-2026-27/). Unlock instant access [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/08/lock-and-key-1.jpg)](#/portal/account/plans) 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](https://www.energyflux.news/the-eu-gas-winter-stress-tester-2026-27/), plus every other data model, Deep Dive and Chart Deck in the archive. Why not join them? [👉 Upgrade to Premium 👈 ](#/portal/account/plans) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Interactive 3D chart experiment URL: https://www.energyflux.news/interactive-3d-chart-experiment/ Last updated: 2026-08-21T06:50:51.000Z 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](https://www.energyflux.news/interactive-3d-chart-experiment). 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: [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/08/lock-and-key.jpg)](#/portal/signup/free) ✍ Sign up for free to continue reading... [Sign up ](#/portal/signup/free) _This post is for subscribers only._ ### Total eclipse of the market URL: https://www.energyflux.news/total-eclipse-of-the-market/ Last updated: 2026-08-17T16:15:36.000Z **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/08/2017-Total-Solar-Eclipse-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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](https://en.wikipedia.org/wiki/Baily%27s%5Fbeads?ref=energyflux.news), 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](https://wildfiretoday.com/europe-wildfires-continue-to-burn-at-near-record-breaking-pace/?ref=energyflux.news). 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 đŸ’„ ***Article stats** *: 2,000 words, 8-min read time, 128-slide deck download* [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/lock-and-key-2.jpg)](mailto:hello@energyflux.news) [Upgrade to Premium](https://www.energyflux.news/subscribe) 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 👈 ](mailto:hello@energyflux.news) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Unintended consequences URL: https://www.energyflux.news/unintended-consequences/ Last updated: 2026-08-14T02:41:16.000Z **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](https://edition.cnn.com/2026/07/27/middleeast/caspian-sea-iran-ukraine-wars-collide-intl?ref=energyflux.news) 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”](https://www.timesofisrael.com/irans-fm-claims-ukraine-struck-iranian-vessel-at-israels-behest-vows-retaliation/?ref=energyflux.news) 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](https://www.iranintl.com/en/202607288015?ref=energyflux.news). This is the calibrated stalemate in miniature: a real escalation, absorbed and defused, nothing settled, and a sting in the tail. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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](https://newswav.com/article/drone-hits-us-lng-vessel-at-damietta-in-first-attack-on-egyptian-soil-A2607%5FT3e0Iw?ref=energyflux.news) 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 TĂŒrkiye’s BOTAƞ 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. [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/lock-and-key-2.jpg)](mailto:hello@energyflux.news) [Upgrade to Premium](https://www.energyflux.news/subscribe) 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 👈 ](mailto:hello@energyflux.news) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### TTF to the moon? URL: https://www.energyflux.news/dutch-ttf-to-the-moon-eu-gas-price-hormuz/ Last updated: 2026-07-24T06:00:50.000Z > **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](https://www.energyflux.news/priced-for-peace/) [signs](https://www.energyflux.news/the-market-that-cried-peace/) 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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. [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/lock-and-key-2.jpg)](mailto:hello@energyflux.news) [Upgrade to Premium](https://www.energyflux.news/subscribe) 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 👈 ](mailto:hello@energyflux.news) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### How the sun rewrote Pakistan’s LNG strategy URL: https://www.energyflux.news/how-the-sun-rewrote-pakistans-lng-strategy/ Last updated: 2026-08-18T22:55:48.000Z **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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. đŸ’„ *Article stats: 4,000 words, 15-min read time, 2 charts, 1 table* [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/lock-and-key-4.jpg)](#/portal/account/plans) 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 🔓 ](#/portal/account/plans) Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs** [👉 Get in touch 👈 ](mailto:hello@energyflux.news) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### The Hormuz clown show gets serious URL: https://www.energyflux.news/the-hormuz-clown-show-gets-serious/ Last updated: 2026-07-21T15:47:42.000Z ## 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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 plans to ramp up loadings at its Ras Laffan liquefaction megaproject\*, 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. \* *This post has been amended to correct a previous incorrect statement that QatarEnergy had "halted its Ras Laffan mega-expansion project". For clarity: the halt applies only to returning existing capacity to operational status, not the expansion project.* 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 🔓 ](#/portal/account/plans) [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/lock-and-key-2.jpg)](mailto:hello@energyflux.news) Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs** [👉 Get in touch 👈 ](mailto:hello@energyflux.news) **Download this week’s Chart Deck** PowerPoint (.ppsx) Adobe PDF (.pdf) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Will the €50 ceiling hold? URL: https://www.energyflux.news/will-the-eur50-ceiling-hold-gas-ttf-hormuz/ Last updated: 2026-07-10T06:25:32.000Z > “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](https://www.energyflux.news/the-hormuz-half-life/) **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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](https://www.energyflux.news/the-hormuz-half-life/); 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](https://www.energyflux.news/var-the-hidden-ceiling-why-ttf-cant-break-50/). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/40_floor_50_ceiling.png) That ceiling has been [tested before](https://www.energyflux.news/the-ttf-gas-price-ceiling-softens/), 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. đŸ’„ *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 🔓 ](#/portal/signup) [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/lock-and-key-2.jpg)](mailto:hello@energyflux.news) Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs** [👉 Get in touch 👈 ](mailto:hello@energyflux.news) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The Spread is Dead URL: https://www.energyflux.news/the-spread-is-dead/ Last updated: 2026-07-15T14:52:34.000Z **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/chart1_fill_trajectory.png) ## 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](https://www.energyflux.news/gas-industry-goes-to-war-over-eu-storage-rules/) 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?** đŸ’„ *Article stats: 6,000 words, 25-min reading time, 5 charts, 1 table* [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/lock-and-key-1.jpg)](#/portal/signup) 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 🔓 ](#/portal/signup) Credit card not an option? Need group access, or a corporate account? ****We offer flexible subscription options to suit all needs** [👉 Get in touch 👈 ](mailto:hello@energyflux.news) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Asia’s LNG demand: reality check URL: https://www.energyflux.news/asias-lng-demand-reality-check/ Last updated: 2026-07-02T06:45:03.000Z **Oil major Shell this week released its annual LNG Outlook, one of the most closely watched forward views in the global gas market. This year it recasts the long-anticipated supply glut as a temporary dip on the way to renewed tightness. The whole manoeuvre rests on one assumption: a surge in Asian demand in the early 2030s. But the demand trajectory in growth-engine markets, as well as policy responses to the Hormuz crisis, weaken that assumption.** One chart in the Outlook is studied more closely than the rest: Shell’s global LNG supply-demand projection. It is the closest thing the industry has to a shared view of whether the world needs more export capacity, how much, and by when. If the demand range sits above the supply line, it sends a clear message to capital markets: invest in new LNG plants. This year’s message is one of continuity through disruption. According to Shell, the world’s biggest publicly traded portfolio player, LNG remains “a core pillar of the global energy system,” its growth “driven by Asian economic growth and intensifying energy security risks.” The Outlook presents three shocks in six years as stress tests the market passed: the pandemic, the war in Ukraine, and now the Hormuz crisis in the Middle East. The headline number reaches further than before. For the first time it extends to 2050, and puts global LNG demand at around 685 million tonnes per annum (mtpa) by then, roughly 60% above 2025\. Beneath that sits a “structural supply gap in 2050”: a \~200 mtpa wedge of future demand that sanctioned projects do not yet cover and which, in Shell’s telling, can only be filled by more liquefaction investment. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/Shell-SD-balance-projection---gap.png) **Source: Shell LNG Outlook 2026* Almost all of that growth comes from Asian economies. Shell points to economic growth, urbanisation, and domestic production declines as the drivers. This is contingent upon a massive >140 mtpa infrastructure rollout which, as regular *Energy Flux* readers will recall, is highly unlikely to materialise (see [*Asia’s LNG bottleneck*](https://www.energyflux.news/asias-lng-bottleneck-part-1/) for a two-part Deep Dive into regasification constraints). [Asia’s LNG bottleneck (part 1)DEEP DIVE: Will infrastructure constraints burst the Asian LNG demand growth narrative?![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/EF_square_tight-a6dcc2ee-6450-4949-a41e-8f68c03189d6.jpg)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/https-3a-2f-2fsubstack-post-media-s3-amazonaws-com-2fpublic-2fimages-2f35e9d839-8449-43a9-ac3d-48bc0bcbb119_1792x1024-jpeg-2-4fdf5044-fd8b-4d81-bdd6-732bf0f9d718.jpg)](https://www.energyflux.news/asias-lng-bottleneck-part-1/) ## The hump that has to hold Leaving aside the regas capacity issue, there is a more pressing question: post-Hormuz, is Asia both *willing and able* to buy up all the new LNG supply that is on the horizon? Before the 2026 Middle East crisis, the dominant story in LNG was a coming glut: a wall of new supply from the United States and Qatar arriving between 2026 and 2030, outrunning demand and pushing prices down. The question was when the two lines would cross, with looser market conditions expected to drag prices below the [affordability threshold for price-sensitive economies](https://www.energyflux.news/asia-lng-price-pain-threshold-energy-natural-gas/). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Shell’s 2026 edition does two things to that picture. First, the supply wave got bigger. A record run of LNG project final investment decisions (FIDs) in 2025 pushed committed supply (operational plus under construction) well above what Shell projected a year ago. By the mid-2030s, Shell now shows roughly 46 mtpa more committed supply than in its 2025 Outlook. More supply, arriving later. On its own, that deepens the glut rather than resolving it. ![Shell's supply wave got bigger: committed LNG supply now runs about 45 Mt per year above Shell's 2025 outlook by 2035](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/supply_wave.png) Second, in the 2026 edition, the demand line rose to meet it. Compared to last year, the demand range for 2030 and 2040 is essentially unchanged. What changes is the shape in between. A new bulge appears across the early 2030s, adding roughly \~44 mtpa of extra demand at its peak in 2033–34, before the two editions converge. ![Shell's demand hump moved up and forward: the 2026 edition adds 30-45 Mt per year of demand in 2032-2036, then reconverges](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/Shell-demand-hump-2.png) An early-2030s lift in demand is precisely what is needed to absorb a late-2020s glut. Raise the demand line in the years when the surplus lands, and an oversupply becomes a temporary dip before a renewed shortage justifies the next wave of liquefaction investment. Shell does not dispute the surplus. In its view, an early-2030s demand surge turns it into a passing dip, and the shortage on the far side becomes the reason to keep building. This thesis rests entirely on that surge in Asian LNG demand. Will it show up? đŸ’„ *Article stats: 3,500 words, 14-min reading time, 20 interactive charts & graphs* [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/07/lock-and-key.jpg)](#/portal/signup) **Below the paywall, we test the demand hump against seventeen years of cargo data and the choices every major importer has made since the Hormuz crisis.* **The question is not whether Asia still needs gas. It is whether Asia is positioned to mop up the surplus fast enough to rescue the next wave of LNG investment.* **The picture that emerges challenges the growth narrative that capital markets are prone to believe.* [Unlock this Deep Dive and dozens more in the Archive 🔓 ](#/portal/signup) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### From Moscow to Mar-a-Lago URL: https://www.energyflux.news/from-moscow-to-mar-a-lago/ Last updated: 2026-06-30T13:18:50.000Z ✍ **This is a special guest post by Brussels-based American-European journalist* [**Dave Keating*](https://www.linkedin.com/in/davekeating/?ref=energyflux.news) **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for free to continue reading đŸ’„ Energy Flux đŸ’„ **—* **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._ ### The Hormuz Half-Life URL: https://www.energyflux.news/the-hormuz-half-life/ Last updated: 2026-06-26T06:06:51.000Z **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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](https://www.energyflux.news/interview-the-iran-deal-is-an-unmitigated-disaster-for-the-us/) 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](https://www.pbs.org/newshour/world/un-agency-pauses-evacuation-of-ships-through-strait-of-hormuz-after-uk-says-a-vessel-was-hit?ref=energyflux.news) 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. [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/06/lock-and-key-3.jpg)](#/portal/signup) 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... ](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Priced for peace? URL: https://www.energyflux.news/priced-for-peace/ Last updated: 2026-06-20T15:02:15.000Z 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 LiberatiĂłn interview](https://www.energyflux.news/interview-the-iran-deal-is-an-unmitigated-disaster-for-the-us/). 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. đŸ’„ ***Article stats: 1,000 words, 121 slides (PDF / PPSX download)*** [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/06/lock-and-key-3.jpg)](#/portal/signup) ****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 🔓 ](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### INTERVIEW: The Iran deal is an unmitigated disaster for the US URL: https://www.energyflux.news/interview-the-iran-deal-is-an-unmitigated-disaster-for-the-us/ Last updated: 2026-06-18T11:01:38.000Z I was interviewed by French broadsheet newspaper LiberatiĂłn 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. LiberatiĂłn have kindly allowed me to reproduce the Q&A in full on these pages. For the Francophones, the original (in French) is [here](https://www.liberation.fr/international/moyen-orient/petrole-il-ny-aura-pas-de-veritable-retour-a-la-normale-car-liran-ne-renoncera-pas-au-controle-du-detroit-dormuz-20260617%5FUMN3F3P6VJEILLG22A4RGFB4AA/?ref=energyflux.news). I have appended some details on what is actually included in the text of the deal in the post-script. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for free to continue reading đŸ’„ Energy Flux đŸ’„ **—* **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._ ### Gas industry goes to war over EU storage rules URL: https://www.energyflux.news/gas-industry-goes-to-war-over-eu-storage-rules/ Last updated: 2026-07-21T03:30:56.000Z **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](https://www.eurogas.org/resource/rethinking-gas-storage-in-the-review-of-the-security-of-supply-framework/?ref=energyflux.news) 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](https://www.gie.eu/wp-content/uploads/filr/13757/2026.03.12%5FGIE%5Fposition%5FQuantifying%5FGas%5FStorage%5FNeeds.pdf?ref=energyflux.news) 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](https://www.gasunietransportservices.nl/en/news/gts-publishes-resilience-analysis?ref=energyflux.news) 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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](https://energy.ec.europa.eu/news/gas-market-task-force-presents-its-findings-functioning-eu-gas-and-gas-derivatives-markets-2026-06-02%5Fen?ref=energyflux.news) 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/06/GAS-STORAGE_001.png) 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. đŸ’„ *Article stats: 3,600 words, 3 charts, 14-min reading time* [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/06/lock-and-key-2.jpg)](https://www.energyflux.news/#/portal/signup/684aaffa1045ff0001e3f401/monthly) 💡 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 🔓 ](https://www.energyflux.news/#/portal/signup/684aaffa1045ff0001e3f401/monthly) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### The Fog of Peace URL: https://www.energyflux.news/the-fog-of-peace/ Last updated: 2026-06-15T06:16:19.000Z **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/06/TTF-selloff.png) Source: [ICE Endex](https://www.ice.com/products/27996665/Dutch-TTF-Gas-Futures/data?marketId=6243134&ref=energyflux.news) 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](https://www.rferl.org/a/trump-iran-peace-agreement-pakistan-israel-lebanon/33780270.html?ref=energyflux.news) “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](https://www.youtube.com/watch?v=fzSwC8Rv7Fw&ref=energyflux.news) 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](https://www.youtube.com/watch?v=fzSwC8Rv7Fw&ref=energyflux.news)). 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 on the Premium tier only._ ### The market that cried peace URL: https://www.energyflux.news/the-market-that-cried-peace/ Last updated: 2026-06-12T08:49:51.000Z 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](https://exchange.energyflux.news/t/s-korea-el-nino-trump-flux-briefing-12-06-2026/5796?ref=energyflux.news). 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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](https://www.energyflux.news/eu-gas-review-flags-algo-trading-risks/) 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. [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/06/lock-and-key-1.jpg)](#/portal/signup) 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 🔓 ](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The ceiling softens URL: https://www.energyflux.news/the-ttf-gas-price-ceiling-softens/ Last updated: 2026-06-04T07:15:51.000Z 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](https://www.energyflux.news/var-the-hidden-ceiling-why-ttf-cant-break-50/). 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/06/sigma_20d_expanding-1.png) **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? [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/06/lock-and-key.jpg)](#/portal/signup) 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 🔓 ](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### EU review flags algo-trading risks URL: https://www.energyflux.news/eu-gas-review-flags-algo-trading-risks/ Last updated: 2026-06-02T18:51:17.000Z **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](https://ec.europa.eu/transparency/documents-register/detail?ref=SWD%282026%29147&lang=en) 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 ](#/portal/signup/free) _This post is for subscribers only._ ### Quantum transits URL: https://www.energyflux.news/quantum-transits-strait-hormuz-lng/ Last updated: 2026-06-01T23:26:43.000Z **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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](https://en.wikipedia.org/wiki/Peso%5Fproblem%5F%28finance%29?ref=energyflux.news)’ 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. đŸ’„ *Article stats: 3,000 words, 12-min reading time, 2 charts, 1 interactive data model* [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/05/lock-and-key.jpg)](#/portal/account/plans) Need access? [Unlock the Deep Dive + interactive model 🔓 ](#/portal/account/plans) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Spreads blow out URL: https://www.energyflux.news/ttf-jkm-lng-spreads-blow-out/ Last updated: 2026-06-04T06:17:29.000Z **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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 🔓 ](#/portal/account/plans) **Download this week’s Chart Deck** PowerPoint (.ppsx) Adobe PDF (.pdf) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Countdown to the Commodities Crunch URL: https://www.energyflux.news/countdown-to-the-commodities-crunch/ Last updated: 2026-05-20T06:00:01.000Z 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 ](#/portal/signup/free) _This post is for subscribers only._ ### The slow grind higher URL: https://www.energyflux.news/ttf-gas-the-slow-grind-higher/ Last updated: 2026-05-15T06:00:28.000Z **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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](https://www.energyflux.news/tag/chart-deck-2/) 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](https://www.energyflux.news/var-the-hidden-ceiling-why-ttf-cant-break-50/) 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](https://www.bnr.nl/nieuws/economie/10600842/gasunie-slaat-alarm-ingrijpen-nodig-om-vuldoel-voor-winter-te-halen?ref=energyflux.news), calling for gas storage subsidies to avert a winter supply crunch. German utility RWE chimed in, [calling for](http://reuters.com/business/energy/rwe-calls-strategic-gas-reserves-middle-east-conflict-empties-caverns-2026-05-13/?ref=energyflux.news) 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](https://www.energyflux.news/the-next-narrative-whipsaw-ttf-lng-gas-hormuz/). 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 🔓 ](#/portal/account/plans) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The Hidden Ceiling URL: https://www.energyflux.news/var-the-hidden-ceiling-why-ttf-cant-break-50/ Last updated: 2026-08-18T22:56:24.000Z > 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## 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. **đŸ’„ *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 🔓 ](#/portal/signup) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Crossing the Hormuz chasm URL: https://www.energyflux.news/crossing-the-hormuz-chasm-oil-lng-iran/ Last updated: 2026-05-06T06:04:23.000Z ✍ **This is a special guest post co-authored by* [***Gareth Miller**](https://www.linkedin.com/in/gareth-miller-673aba3/?ref=energyflux.news) *and* [***Seb Kennedy**](https://www.linkedin.com/in/sebkennedy/?ref=energyflux.news) #### Article summary đŸ”œ - ****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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for free to continue reading đŸ’„ Energy Flux đŸ’„ **—* **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._ ### The post-Hormuz cliff edge URL: https://www.energyflux.news/the-next-narrative-whipsaw-ttf-lng-gas-hormuz/ Last updated: 2026-05-01T08:03:04.000Z **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 ](#/portal/account/plans) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The shock absorber cracks URL: https://www.energyflux.news/the-shock-absorber-cracks/ Last updated: 2026-04-24T10:25:38.000Z Yesterday, Pakistan issued its first spot tender since December 2023\. Pakistan LNG Limited wants three cargoes of approximately 140,000 mÂł 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](https://ieefa.org/resources/pakistans-lng-surplus-crisis-assessing-evolving-energy-dynamics-and-need-flexibility?ref=energyflux.news), 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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. [đŸ—ïž Unlock full analysis + Chart Deck download ](#/portal/account/plans) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Groundhog Strait URL: https://www.energyflux.news/groundhog-strait-hormuz-lng/ Last updated: 2026-04-22T06:26:49.000Z After a short break, Victor Ponsford and I reconnected on [the *Energy Flux* podcast](https://www.youtube.com/watch?v=VNw9Q%5Frnc6g&t=14s&ref=energyflux.news). 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**](https://www.energyflux.news/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](https://www.youtube.com/watch?v=VNw9Q%5Frnc6g&list=PLcDbICh3ZDbmUlFk3HSgswT7V%5FFa9i%5F06&index=1&t=13s&ref=energyflux.news): 🎧 Listen on [Apple](https://podcasts.apple.com/us/podcast/groundhog-strait-hormuz-lng-and-prolonged-uncertainty/id1795806284?i=1000763005964&ref=energyflux.news) 🎧 Listen/watch on [Spotify](https://open.spotify.com/episode/5FEhMrPM8llKRl1ZlNsjmn?si=zN3QOMBTQoWDkcCUk-medw&ref=energyflux.news) 📣 ****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](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) and log in. Need access? 👇 [Upgrade to Premium](#/portal/account/plans) --- ## đŸ“ș 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](https://exchange.energyflux.news/?ref=energyflux.news) ### A market at war with itself URL: https://www.energyflux.news/a-market-at-war-with-itself-gas-lng-ttf-jkm/ Last updated: 2026-06-01T23:25:36.000Z **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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: bullish 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**](https://www.energyflux.news/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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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 bearish edge of the analogy, and it is the one markets seem to be pricing. The bullish 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](https://www.reuters.com/business/energy/eu-member-states-must-coordinate-energy-prices-amid-iran-conflict-von-der-leyen-2026-04-13/?ref=energyflux.news) 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](https://www.energyflux.news/germany-bites-the-gas-storage-bullet/). 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 ](#/portal/account/plans) **👇 DOWNLOAD: 99 slides in .ppsx and .pdf format 👇** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Update to the Hormuz LNG supply model URL: https://www.energyflux.news/update-to-the-hormuz-lng-supply-model/ Last updated: 2026-04-16T07:38:25.000Z Following user feedback, I have implemented several major improvements to the [Hormuz Closure LNG Supply Impact Model](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/), which was released on Tuesday alongside a free-to-read [Deep Dive](https://www.energyflux.news/war-vs-glut-the-great-lng-reckoning/). 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/image-8-1.png) Source: [****Hormuz Closure LNG Supply Impact Model**](https://www.energyflux.news/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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/image-9-1.png) Source: [****Hormuz Closure LNG Supply Impact Model**](https://www.energyflux.news/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](mailto:seb@energyflux.news) or leave a comment on [this thread in Flux Exchange](https://exchange.energyflux.news/t/war-vs-glut-the-great-lng-reckoning/2871/2?ref=energyflux.news). ## 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](https://www.reuters.com/business/energy/edison-says-qatar-may-extend-gas-force-majeure-sees-us-lng-filling-gap-2026-04-15/?ref=energyflux.news) 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](https://www.energyflux.news/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.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/size/w1200/2026/04/Hormuz-Hero-image-Games-Con.jpg)](https://www.energyflux.news/war-vs-glut-the-great-lng-reckoning/) 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](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) 👇 [Hormuz Closure LNG Supply Impact ModelAn interactive chokepoint closure scenario engine, supported by a global LNG project tracker and user override layer![](https://static.ghost.org/v5.0.0/images/link-icon.svg)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/Model-screenshot.jpg)](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) Thanks for reading, Seb [Upgrade to Paid](#/portal/account/plans) P.S. If you want to upgrade to a paid plan but cannot do so via credit card, please [contact us](mailto:hello@energyflux.news) 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 wellđŸ€ž ### War vs. Glut: The Great LNG Reckoning URL: https://www.energyflux.news/war-vs-glut-the-great-lng-reckoning/ Last updated: 2026-04-28T22:54:51.000Z **The global LNG market has entered a phase of extreme uncertainty where outdated narratives go to die.** For the last 18 months or so, 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 social media timelines. That tension now defines the market. So we built a tool to measure it. Today, *Energy Flux* launches the [Hormuz Closure LNG Supply Impact Model](https://www.energyflux.news/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. The model comes with pre-loaded assumptions that provide insightful conclusions in their own right. But the true value lies in the model’s interactive functions. Users can input their own assumptions, intelligence and market judgement to generate unique LNG supply projections. [Load up the model](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## The Base Case: structurally tight until end-2028 Start with the default assumptions and the conclusions are rather stark. Under the *Energy Flux* base case, Hormuz only partially reopens in September, after which Middle East LNG transits gradually recover towards full flows in mid-2028\. The two damaged Qatari liquefaction trains remain offline for four years, and new LNG projects continue to ramp at a realistic rather than miraculous pace. Result: the supply hole is not repaired quickly. The model indicates that new global LNG capacity additions do not offset lost Hormuz-dependent capacity until **September 2027**. That is the point at which new non-Hormuz LNG capacity additions finally match the annualised capacity removed from the system. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/image-2.png) Source: [****Hormuz Closure LNG Supply Impact Model**](https://www.energyflux.news/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: **almost 60 mt**, or more than 13% of total worldwide LNG trade in 2025, by December 2026. If disruption endures per the Base Case assumptions, the cumulative volume supply deficit stretches almost until the end of the decade. Assuming a 10% resumption of Hormuz flows and gradual recovery thereafter, cumulative supply from new LNG project additions since 1 March 2026 would offset cumulative lost Middle East LNG supply volumes in **December 2028**. 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 has been deepening every day since the US and Israel started their joint attacks on Iran. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/image-3.png) ****Source:** [****Hormuz Closure LNG Supply Impact Model**](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) ## The optimistic take: a slow reversal of misfortune The conclusions above are based on assumptions that could quickly be overtaken by events – which is why the [Hormuz Closure LNG Supply Impact Model](https://www.energyflux.news/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 recover to 80% by August 2026, and to 100% by mid-2027 ✅ The damaged Ras Laffan trains are repaired within three years ✅ The entire global LNG supply wave is accelerated by six months âžĄïž then the picture changes dramatically. New capacity additions would replace lost Hormuz-dependent liquefaction as early as **end-November 2026**
 ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/image-4.png) ****Source:** [****Hormuz Closure LNG Supply Impact Model**](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) 
 and the cumulative physical supply loss from Hormuz closure could be completely eliminated by **October 2027**. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/image-5.png) ****Source:** [****Hormuz Closure LNG Supply Impact Model**](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) The divergence is substantial: in this more optimistic scenario, lost capacity would be replaced by new additions 10 months earlier than in the Base Case, and cumulative lost volumes would be fully replaced a full 14 months earlier. This highlights the heightened sensitivity of LNG supply to ongoing diplomatic efforts, the double-blockade of Hormuz, and the threat of resumed conflict in this contested waterway. ## The supply wave cometh? The divergent modelling outcomes also demonstrate the market’s sensitivity to the timing of new LNG projects. While Hormuz is the critical factor determining near-term market balances, the coming supply wave is so big it has the clear potential to replace Middle Eastern supply altogether. Plaquemines is already shipping 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. If these projects can accelerate their deployment, the market will rebalance much sooner. But if there are widespread delays (which users can model by adjusting the Global LNG Ramp Pace Shift input variable), then the optimism depicted above becomes illusory. For example, if the entire global LNG supply wave is delayed by nine months due to labour shortages and materials cost inflation – a very real possible outcome of the US-Iran war – then lost LNG capacity will not be replaced until **January 2028**
 ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/image-6.png) ****Source:** [****Hormuz Closure LNG Supply Impact Model**](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) 
 and the LNG market would not rebalance until **mid-2029**. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/image-7.png) ****Source:** [****Hormuz Closure LNG Supply Impact Model**](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) 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. And all the while, the supply deficit is deepening is day by day, and all sides in the conflict are entrenching their positions. [Load up the model & test your own assumptions](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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. On Monday 13 April, 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 will Washington make another move 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](https://www.energyflux.news/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 matter the most. ## 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 partial reopening date - Percentage of flows restored after reopening - Hormuz final full reopening date - 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 - Full-capacity ramp dates - Risk classifications - Ramp profiles - Global acceleration or delay factors applied across the global project queue In short: you can model your own market, not ours. ⚙ If you believe diplomacy restores 80% of LNG flows by August, model it. ⚙ If you think the US LNG construction wave hits a six-month delay, model it. ⚙ If you think Qatar recovers much faster than advertised, model it. ⚙ If you think war keeps Hormuz closed for years and everything slips, model that too. ## Why this matters now The geopolitical backdrop remains almost 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. Leaders talk of peace in one breath and destructive threats in the next. 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. [Find out how LNG supply is evolving: load up the model](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) ## 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**](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) is designed to do exactly that: turn chaos into concrete 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 nuanced, and slightly provocative. Whether you take a more optimistic or pessimistic line, your assumptions can now be modelled to visualise how the supply side of the global LNG ledger might evolve from here. Subscribers can access the model right now on the *Energy Flux* platform. Just [click here](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/), log in, and stress-test your view of the market to see when, where and how the market balances. **Seb Kennedy | Energy Flux | 15 April 2026** ****You read the Deep Dive. Now check out the model behind the analysis.** The **Energy Flux* Hormuz Closure LNG Supply Impact Model is available only to subscribers on the Deep Dive and Premium subscription tiers. A paid subscription gives you access to a wealth of insights. Can you afford not to arm yourself with unique market-shaping knowledge at this critical moment in history? [Upgrade for instant access to the model ](https://www.energyflux.news/hormuz-closure-lng-supply-impact-model/) ### America’s Suez moment URL: https://www.energyflux.news/americas-suez-moment-iran-middle-east-war/ Last updated: 2026-04-09T07:31:39.000Z **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](https://abcnews.com/Politics/iran-nuclear-deal-trump-united-states/story?id=123020009&ref=energyflux.news) 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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 đŸ—ïž ](#/portal/account/plans) _This post is for subscribers on the Premium tier only._ ### Easter Escalation URL: https://www.energyflux.news/easter-escalation-trump-gas-lng-qatar-iran-war/ Last updated: 2026-04-07T08:20:32.000Z **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](https://truthsocial.com/@realDonaldTrump/posts/116351998782539414?ref=energyflux.news) 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](https://www.politico.com/news/2026/04/06/pentagon-iran-war-crime-accusations-00860468?ref=energyflux.news) 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](https://www.tradewindsnews.com/gas/first-lng-carrier-braves-strait-of-hormuz-exit-in-ballast/2-1-1969392?ref=energyflux.news) 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/Sohar-LNG.jpg) 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/Al-Daayen.jpg) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/Al-Rasheed-1.jpg) Source: Kpler That deal, reportedly [mediated](https://www.reuters.com/world/middle-east/loaded-qatar-lng-vessels-retreat-after-nearing-strait-hormuz-ship-tracking-data-2026-04-06/?ref=energyflux.news) 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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](https://apnews.com/article/iran-us-pilot-military-rescue-fde473d07fb59e871a71cd2ad2ffe4fe?ref=energyflux.news) 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](https://www.bbc.com/news/articles/cx2vpz1kwreo?ref=energyflux.news). Iran’s Foreign Ministry spokesman Esmaeil Baghaei suggested the operation may have been deceptive plan aimed at [“stealing uranium”](https://x.com/DropSiteNews/status/2041309528395002323?s=20&ref=energyflux.news). 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/04/image-1-1.png) Source: [Truth Social](https://truthsocial.com/@realDonaldTrump/posts/116351998782539414?ref=energyflux.news) On Monday 6 April, he [doubled down](https://www.ynetnews.com/article/bypt8czhbl?ref=energyflux.news): “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 đŸ—ïž ](#/portal/account/plans) --- _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Weaponising the fog of war URL: https://www.energyflux.news/weaponising-the-fog-of-war-trump-hormuz-lng-ttf/ Last updated: 2026-04-02T07:46:10.000Z **Last week, *Energy Flux* laid out the case that gas markets are catastrophically mispricing the supply shock unfolding in the Middle East. That** [**thesis**](https://www.energyflux.news/the-great-gas-risk-mispricing/) **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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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: đŸ’„ **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. đŸ’„ **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)**. đŸ’„ **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)**. đŸ’„ **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. đŸ’„ **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)**. đŸ’„ **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)**. đŸ’„ **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)**. đŸ’„ **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 ](#/portal/account/plans) **👇 DOWNLOAD: 95 slides in .ppsx and .pdf format 👇** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Armageddon deferred? URL: https://www.energyflux.news/us-iran-war-armageddon-deferred-podcast-gas-lng-oil/ Last updated: 2026-03-27T08:00:49.000Z 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](https://www.youtube.com/watch?v=HXkCPO6Ey38&ref=energyflux.news): ### 🎧 Listen/watch on [Spotify](https://open.spotify.com/episode/4hUzwO9lX0870sldaN8xhu?ref=energyflux.news): ### 🎧 Listen on [Apple podcasts](https://podcasts.apple.com/us/podcast/us-iran-war-armageddon-deferred/id1795806284?i=1000757600626&ref=energyflux.news): --- ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## đŸ“ș 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](https://www.energyflux.news/the-great-gas-risk-mispricing/)). 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.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/EF_square_tight-21.jpg)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/w_1200-h_600-c_fill-f-q_auto:good-fl_progressive:steep-g_auto/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2fpodcast-episode_1000705593759.jpg)](https://www.energyflux.news/media-appearances/) --- ## đŸ—žïž 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. [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/image.png)](https://www.reuters.com/business/energy/iran-war-damage-qatar-hits-global-lng-outlook-upends-asia-demand-growth-2026-03-26/?ref=energyflux.news) Source: [Reuters](https://www.reuters.com/business/energy/iran-war-damage-qatar-hits-global-lng-outlook-upends-asia-demand-growth-2026-03-26/?ref=energyflux.news) 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.” [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/image-1.png)](https://www.reuters.com/business/energy/iran-war-damage-qatar-hits-global-lng-outlook-upends-asia-demand-growth-2026-03-26/?ref=energyflux.news) Source: [Reuters](https://www.reuters.com/business/energy/iran-war-damage-qatar-hits-global-lng-outlook-upends-asia-demand-growth-2026-03-26/?ref=energyflux.news) 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](https://www.reuters.com/business/energy/iran-war-damage-qatar-hits-global-lng-outlook-upends-asia-demand-growth-2026-03-26/?ref=energyflux.news). 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 ](https://exchange.energyflux.news/c/flux-briefing/20?ref=energyflux.news) ### The Great Gas Risk Mispricing URL: https://www.energyflux.news/the-great-gas-risk-mispricing/ Last updated: 2026-05-12T20:10:03.000Z **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](https://www.energyflux.news/the-middle-east-energy-war-is-spiralling-out-of-control/) 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 high-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](https://www.energyflux.news/hormuz-closure-triggers-record-ttf-liquidation/); 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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: đŸ’„ TTF, JKM and Henry Hub price action and volatility (**slides 5-19**) đŸ’„ NWE-TTF basis spreads & EU-Asia tug of war for scarce cargoes (**slides 44-51**) đŸ’„ Asian LNG pricing across oil-indexed, HH-linked and spot channels (**slides 52-58**) đŸ’„ 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.* [đŸ—ïž Unlock the Chart Deck ](#/portal/account/plans) **👇 DOWNLOAD: 99 slides in .ppsx and .pdf format 👇** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Lies, damned AIs, and oil prices URL: https://www.energyflux.news/lies-damned-ais-and-oil-prices/ Last updated: 2026-03-24T09:00:13.000Z **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](https://www.energyflux.news/hormuz-closure-triggers-record-ttf-liquidation/) 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.” ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/ICE-Endex-Dutch-TTF-intraday-2026-03-23.jpg) 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 ](#/portal/account/plans) _This post is for subscribers on the Premium tier only._ ### The Middle East energy war is spiralling out of control URL: https://www.energyflux.news/the-middle-east-energy-war-is-spiralling-out-of-control/ Last updated: 2026-03-19T17:11:13.000Z **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](https://www.reuters.com/business/energy/iran-attack-damage-wipes-out-17-qatars-lng-capacity-three-five-years-qatarenergy-2026-03-19/?ref=energyflux.news) 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 [last night](https://www.energyflux.news/israel-takes-energy-warfare-to-the-next-level/), 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. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for free to continue reading đŸ’„ Energy Flux đŸ’„ **—* **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._ ### Israel takes energy warfare to the next level URL: https://www.energyflux.news/israel-takes-energy-warfare-to-the-next-level/ Last updated: 2026-03-19T14:14:05.000Z **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, TĂŒrkiye, 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. đŸ’„ **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 ](#/portal/signup) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### The Price of Vassalage URL: https://www.energyflux.news/the-price-of-vassalage/ Last updated: 2026-07-21T03:44:59.000Z **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](https://www.energyflux.news/war-in-iran-convulses-energy-markets/), triggered a [dramatic repricing](https://www.energyflux.news/hormuz-closure-triggers-record-ttf-liquidation/) of risk in EU gas markets, delivered [spectacular LNG windfall profits](https://www.energyflux.news/war-profits-quantified/), and exposed the [ugly reality](https://www.energyflux.news/iran-war-us-energy-dominance-laid-bare-lng-gas-geopolitics/) 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. đŸ’„ **Article stats: 2,200 words, 9-min reading time* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### The Pain Factor URL: https://www.energyflux.news/the-pain-factor/ Last updated: 2026-03-14T15:08:22.000Z After a long hiatus, I finally managed to record a new episode of the Energy Flux podcast. This one is rather special – I was joined by [Victor Ponsford](https://www.linkedin.com/in/victorponsford/?ref=energyflux.news), an independent energy strategic communications consultant, to discuss the unfolding crisis in the Middle East. The conversation delves into the likely duration of the Hormuz closure, and why political and military factors are conspiring to keep this strategic maritime chokepoint closed for months rather than weeks. We also talked about how physical and financial market players in the European gas market are positioning to manage risk and capitalise on the repercussions of prolonged loss of 20% of global LNG supply. For me, the main takeaway was Victor's observations about the pain factor in diplomacy: how both sides must be hurting (militarily and economically) at an intolerable level before returning to the negotiating table. We have not yet reached that point. We recorded the episode on Thursday 12 March, the day before the US military conducted what are claimed to be targeted air strikes against military installations on Kharg Island, the export point for around 90% of Iran's crude oil. Kharg is strategically vital to Iran's war effort. If exports are impaired from Kharg, as [appears to be the case](https://www.linkedin.com/posts/sebkennedy%5Fcapterios-real-time-gas-flare-tracking-identifies-activity-7438568248641650688-I2lk?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop&rcm=ACoAAAJvzgwBvCHdWBI1dN%5F0QsOZ96ew1O9XDKQ), then questions arise around Tehran’s ability to sustain a war of attrition with reduced or zero oil export revenue. At the same time, it is not clear that America can sustain its military campaign against an oil price spiralling above $100/barrel. Without the reopening of Hormuz transits, $200/barrel oil becomes inevitable. It is only a matter of time. Thus, the war is firmly in the phase of delivering maximum pain to boost leverage and coerce the adversary into concessions first. It is sheer brinksmanship, and the stability of the global economy, lives and livelihoods the world over are all at stake. Anyway, I found the conversation with Victor illuminating and sobering. I hope you do too. 🎧 Listen/watch on [YouTube](https://www.youtube.com/watch?v=f38gGc3yL40&ref=energyflux.news): 🎧 Listen on [Apple](https://podcasts.apple.com/us/podcast/the-pain-factor-why-markets-anticipate-a-long/id1795806284?i=1000755152005&ref=energyflux.news): 🎧 Listen/watch on [Spotify](https://open.spotify.com/episode/5oYHv538cTiX6dHEcu3hNf?ref=energyflux.news): Have a great weekend. –Seb P.S. In future episodes, we will take listener questions. You can submit these via **Flux Exchange**, the community forum. Questions from Premium subscribers are prioritised – if you have an active subscription, log into **Flux Exchange** and start a new Topic in the Podcast category: [Take me there](https://exchange.energyflux.news/c/podcast/12?ref=energyflux.news) Alternatively, hit reply to this email and I will post questions into Forum as they drop in. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ### Hormuz closure triggers record TTF liquidation URL: https://www.energyflux.news/hormuz-closure-triggers-record-ttf-liquidation/ Last updated: 2026-03-12T08:31:45.000Z **The sudden closure of the Strait of Hormuz has forced global gas markets into a rapid and painful reassessment of risk. In a matter of days, traders have had to price a scenario that until recently sat firmly in the realm of tail risk: a disruption to Persian Gulf LNG exports at the very moment Europe is preparing to refill storage after a difficult winter.** Markets are still struggling to determine whether this shock represents a temporary disruption or the start of a much more serious tightening of global gas balances. The initial reaction has been chaotic. Prices surged, freight markets exploded, and LNG trade flows began to shift as Atlantic Basin cargoes chased higher netbacks in Asia. But the deeper story now emerging is not just the price spike itself. It is how different market participants are positioning for what comes next. 💡 **Here’s the must-read overview (premium subscribers can download the full* ***90-slide Chart Deck** *via the paywalled link below).* ## Everything must go: funds ignite fire sale The Hormuz closure has triggered the most violent repricing in European gas futures since Russia’s invasion of Ukraine in 2022\. In the week ending 6 March, investment funds trading on ICE Endex executed one of the largest repositioning moves ever recorded in TTF. Shorts were slashed by 202 TWh and longs were reduced by 127 TWh, resulting in 330 TWh of gross exposure liquidated in total. The net effect was a +75 TWh swing toward net-long positioning, pushing fund exposure from +121 TWh to +196 TWh, the highest level since February 2025 (**slides 21-27**). This was not a routine shift in positioning. It was a rapid risk reset. Funds were caught off guard by the scale of the geopolitical shock and moved quickly to reduce exposure while covering shorts. The result was the largest gross liquidation event on record in TTF futures. Price action reflected the shock. Front-month TTF jumped €20/MWh week-on-week to settle at €52.29/MWh on 6 March, spiked to €55.49/MWh on 9 March, retreated to €46.71/MWh on 10 March as the Trump administration sought to ease jitters, then rebounded to €49.29/MWh yesterday when oil tankers were [set ablaze](https://x.com/mercoglianos/status/2031881472148156906?s=20&ref=energyflux.news) near Iraq (**slide 11**). The forward curve remains elevated across all tenors and in backwardation, reflecting deep uncertainty over how long the disruption will last (**slides 17-18**). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Funds move first, commercials recalibrate Speculative capital moved aggressively. Commercial market participants exercised caution. Commercial gas operators recorded a mere +0.75 TWh net change in positioning during the same week. At first glance that suggests stability, but the underlying flows tell a different story. Within commercial portfolios there was a \~75 TWh internal rotation (**slides 28-33**). Risk-reduction hedges increased by +38 TWh, effectively lifting some upside protection and allowing greater exposure to rising prices. At the same time, discretionary trading books sold longs and added shorts totalling −37 TWh, positioning against the geopolitical rally (**slide 30**). The offset between those two books left the overall commercial position largely unchanged. In practical terms, physical players hedged their underlying exposure while opportunistically trading the volatility created by the Iran shock. The divergence is telling. Funds repositioned around a new geopolitical risk regime. Commercial participants treated the price spike as a trading opportunity while keeping their physical portfolios balanced. ## Europe & Asia struggle to price shock Gas markets are struggling to price a disruption whose duration is unknown. In the immediate aftermath of the Strait closure, European gas prices surged relative to Asian LNG benchmarks. On 3 March, front-month TTF briefly traded at a $2.22/MMBtu premium to JKM. That spread widened above $5/MMBtu on Monday as TTF spiked close to $19/MMBtu while JKM traded around $13.5/MMBtu (**slides 12-14**). The gap then closed almost entirely by 10 March as Asian prices caught up. These violent swings reflect a market grappling with two competing possibilities: a short-lived disruption that quickly reverses, or a prolonged outage that forces Europe and Asia into direct competition for flexible LNG cargoes. The forward curve currently suggests the latter risk is rising. JKM is trading at a $1.86/MMBtu premium to TTF for May, $1.69/MMBtu in June, and $1.10/MMBtu in July, indicating growing competition for summer LNG supply. Freight markets reinforce that signal. Charter rates for 174,000-cm LNG carriers surged from roughly $20,000/day a month ago to nearly $300,000/day on 5 March, before easing back to around $200,000/day. The surge reflects both disrupted Gulf traffic and longer voyages as cargoes reroute around the Cape of Good Hope (**slides 43-45**). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Storage economics: refill problem gets harder Europe enters this crisis from an already weak storage position. EU gas inventories stood at 334.7 TWh on 9 March, equivalent to 29.3% full. A year earlier storage was 420.4 TWh (36.6%), leaving a deficit of roughly 86 TWh. Relative to the long-run seasonal average, storage levels are 11.8 percentage points below normal (**slides 46-49**). The refill task is demanding even without supply disruption. To reach the EU’s 90% storage target by 1 November, the system must inject roughly 694 TWh over about 235 days, implying an average injection rate close to 3 TWh per day. During the 2025 refill season, peak injections averaged around 2.5 TWh/day. At the same time, the forward curve is now working against storage operators. Front-month TTF settled at €46.71/MWh on 10 March, compared with €45/MWh three months forward and €44.12/MWh six months out. Summer 2026 contracts average roughly €46/MWh, while Winter 2027 trades closer to €43/MWh (**slides 15-16**). This backwardated structure undermines the traditional storage trade. Buying gas today for injection and selling winter futures locks in a loss on paper. Procuring 694 TWh at a negative seasonal spread of -€3/MWh implies a carry loss of €2 billion. Without regulatory pressure or government intervention, the price signal is discouraging injections at precisely the moment Europe needs them most. ## The Storage-Speculation Nexus shifts down the curve The most revealing signal from the data may not be the price spike itself, but where speculative capital is moving next. The *Energy Flux* **Storage-Speculation Nexus** [regression model](https://www.energyflux.news/the-storage-speculation-nexus-revisited/), which tracks the relationship between fund positioning and movements along the TTF curve, shows a clear shift in behaviour. Until recently, the strongest correlation between fund flows and price movements was concentrated in the prompt and Summer-26 contracts. That pattern has now begun to change. In the week to 6 March, the correlation between fund positioning and the March-26 contract dropped sharply, with the R-squared falling from 0.65 to 0.47\. Similar weakening appeared across the near curve. Further along the curve, however, correlations strengthened. The March-27 contract rose from 0.22 to 0.36, while April-27 increased from 0.02 to 0.19 (**slides 40-41**). In short, **speculative attention is migrating down the curve.** Funds increasingly appear to be pricing a scenario in which Europe avoids aggressive buying during the current refill season because prices are too high, enters Winter 2026 with depleted inventories, and faces an even more severe refill challenge in Summer 2027. ## Parsing the risk of binary outcomes The *Energy Flux* **TTF Risk Model** captures a market caught between two competing narratives (**slides 35-38**). On one side is the expectation that the Strait of Hormuz disruption proves temporary. If shipping resumes and Qatari LNG flows return quickly, the price spike will fade and the structural LNG surplus expected later this decade will reassert itself. On the other side is the possibility that the disruption persists for many months, or that Qatari LNG exports never quite recover. In that scenario, the loss of Gulf exports would tighten global LNG balances just as the Northern Hemisphere moves toward winter. The latest **TTF Risk Model** run reflects that tension. Fund positioning signals have shifted sharply after the large repositioning visible in ICE data, indicating that speculative capital is no longer comfortable maintaining large short exposures. At the same time, parts of the forward curve continue to trade as if the disruption may prove temporary. The resulting Risk Score signals elevated risk but not outright panic (**slides 35-38**). Markets are no longer pricing a single outcome. They are pricing two radically different futures at once. **Seb Kennedy | Energy Flux | 12 March 2026** ****You read the commentary. Now get the data.** Unlock instant access to this week’s 90-slide ****Chart Deck** and see for yourself what the positioning, flows and curves actually say — not what the market is shouting. [👉 Unlock the Chart Deck ](#/portal/account/plans) **đŸ’„ DOWNLOAD: 90+ slides in .ppsx and .pdf format 👇** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Strategic shock in the Middle East URL: https://www.energyflux.news/strategic-shock-in-the-middle-east/ Last updated: 2026-03-09T08:59:44.000Z **War in Iran is no longer simply a regional military crisis. It has become a test of the Middle East’s wider strategic order. What is unfolding is not just a contest of missiles and deterrence, but a struggle over economic resilience, maritime security, alliance credibility, and the capacity of states to absorb systemic shock.** At the centre of this instability lies the Strait of Hormuz, the narrow waterway that carries roughly one-fifth of global oil and liquefied natural gas (LNG) flows. Disruption in the strait therefore reverberates far beyond the Gulf, transmitting geopolitical tension directly into global markets. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/Hormuz-flow-chart.jpg) Graphic: FT.com The market reaction has already revealed the scale of the danger. In early hours trading on 9 March, Brent surged \~30% to peak above $110/barrel, following speculation that US officials discussed seizing Kharg Island, Iran’s main oil export terminal. Prices retreated towards $100/barrel on reports that G7 ministers are considering releasing oil from storage to tame prices. These are not ordinary price movements. They are early warnings of a deeper strategic rupture, one in which instability around Iran is beginning to reshape expectations across energy markets, trade routes, maritime security, investment flows, and alliance systems. At stake is not only the balance of military power, but whether the commercial and strategic systems that underpin stability in the Gulf can survive the fallout of great-power confrontation, write **Imran Nasir Sheikh** and **Asim Riaz** in this guest article for *Energy Flux*. #### IN THIS DEEP DIVE - ****Beyond missiles:** How Iran weaponised risk to undermine shipping and exert maximum economic pain on its adversaries. - ****Kharg Island:** Why seizing Iran's oil hub would mark a dramatic escalation, not contain the war. - ****Allies recalculating:** Why Gulf states now see US bases as a liability and are quietly repricing their alliances. - ****Power redefined:** How endurance and systemic disruption now trump military might, and who really wins. ****See through the fog of war.** Get cutting edge geopolitical insight and strategic analysis of fast-moving military events affecting global commodity trade flows. [👉 Unlock the Deep Dive ](#/portal/signup) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### War in Iran convulses energy markets URL: https://www.energyflux.news/war-in-iran-convulses-energy-markets/ Last updated: 2026-03-06T09:45:07.000Z **It has been a week of fire-hose news flow.** Energy markets are shuddering under the immensity of the loss of one-fifth of global oil and gas supply. Potentially catastrophic second- and third-order effects are rippling menacingly through global supply chains and financial systems. Barely a week into the abrupt outbreak of war in Iran, the temporary closure of the Strait of Hormuz – a vital artery in Middle Eastern hydrocarbon outflows – has the world economy braced for another hyper-inflationary energy supply shock. Dizzying questions abound. Can further escalation be avoided? Is this 2022 all over again? How long might this untenable situation endure? The yardstick for gauging seismic energy supply shocks is Russia’s full invasion of Ukraine. The loss of more than 100 billion cubic metres (Bcm) of Russia pipeline gas propelled European hub prices as high as €340 per MWh in August 2022. We are a still long way from those extremes. Dutch TTF has achieved an uneasy equilibrium around the €50/MWh mark, having spiked +70% at the start of this week. Whether this is the high watermark of 2026 belligerence pricing or the mere foothills of a much greater crisis depends entirely on one factor: the ultimate duration of Hormuz transit disruptions. ## Excruciating uncertainty Against a backdrop of indiscriminate destruction and horrific human tragedy, attempts to restore safe passage are underway. The Trump administration is seeking to underwrite war risk premiums that were cancelled when conflict broke out; China is reportedly seeking to broker a backroom deal with Tehran to restore oil and LNG outflows. Whether these initiatives bear fruit remains to be seen. In the meantime, drones, mines and missiles pose a material threat to the physical integrity of commercial tankers and vessels. Passage in these conditions remains perilous, regardless of sovereign guarantees of financial and physical protection. QatarEnergy, which declared force majeure on LNG supplies after drones damaged infrastructure, anticipates resumption of exports within four weeks. Technically this is achievable, [according to experts](https://www.linkedin.com/pulse/how-shut-down-restart-worlds-largest-lng-facilities-mehdy-touil-ijtxe?ref=energyflux.news). But fixing damaged liquefaction facilities is only part of the challenge at hand. With thousands of cheap Shahed drones at its disposal, Iran has the capability to disrupt Hormuz tanker traffic for months. The Islamist regime has proven resilient to the loss of its ayatollah and is intent upon exploiting the benefits, however slim, of asymmetrical warfare against a vastly superior military adversary. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Drama in the data Against this deeply uncertain backdrop, natural gas and LNG markets are proving remarkably sanguine. This special edition of the subscriber-only *Energy Flux* **Chart Deck** breaks it all down in the usual forensic detail: exchange data, fund positioning, regional LNG flows, proprietary analysis of US LNG netbacks, arbitrage economics, and rolling assessment of Asian spot versus oil indexed LNG. 💡 **Here’s the must-read overview (premium subscribers can download the full 9* **0-slide Chart Deck** *via the paywalled link below).* The headlines are screaming about extreme price volatility. Undeniably (and predictably), benchmark prices have rallied to multi-year highs (**slides 9 & 10**). But that's not only part of the story. The biggest contortions occurred in the LNG freight market, which immediately priced in stranded tonnage and the need to ship Atlantic cargoes longer distances to Asian markets deprived of Qatari LNG. Spot charter rates registered successive day-on-day record increases to peak at a staggering $300,000 per day (**slide 43**). This could work to Europe’s advantage; while the US-Asia arbitrage is marginally open for immediate shipments in April and May, the arb window is still priced as closed for the remainder of the year (**slides 67-69**). ## The stuff of logistical nightmares This is particularly true for US LNG transiting the Cape of Good Hope, the southernmost tip of Africa, to reach Asian markets. Exorbitant freight rates render this 80-day round-trip voyage uneconomic compared to delivering cargoes into much closer European terminals (**slide 44**). That is not to say that Atlantic basin cargoes are staying put. On the contrary, a spate of diversions is underway as numerous traders seek to capitalise on heightened spot demand in Asia, the primary destination for Qatari LNG that is temporarily shut-in (**slides 76-80**). Perhaps the calculus is that netbacks will have increased substantially by the time vessels complete the 30-day, 15,000-nautical mile journey. Or maybe these players treat shipping as a sunk cost. Amidst this confusing outlook, the unprecedented sinking of a sanctioned Russian LNG tanker in the Mediterranean, purportedly by a Ukrainian drone, has added a fresh layer of logistical complexity. Several vessels linked with Russian LNG trade are diverting away from the Mediterranean to avoid suffering a similar fate (**slides 72-75**). Longer voyages and reduced capacity threaten to curtail shipping capacity from the heavily sanctioned Arctic LNG 2 plant at an inopportune moment. ## Reassessing the refill challenge Much has been said about the immense challenge of refilling depleted European gas storage facilities while competing with gas-starved Asian markets for flexible LNG cargoes. Certainly, the resurgence of inverse summer-winter spreads and extreme backwardation renders storage procurement profoundly loss-making (**slides 14-15**). Still, the outlook is not unremittingly dire. The rate of European storage withdrawals has dropped to unseasonal lows, reducing somewhat the refill burden that awaits (**slides 45-48**). With milder temperatures beckoning and indications that the US and China have a shared interest in resuming Hormuz transits, Europe may find it can weather the worst of the storm with steady LNG inflows and attack the bulk of the refilling challenge in calmer market conditions. ## Impossible cost of replacement Markets are assuming that unmet Asian demand will spill over into the spot market. But the cost of replacing lost Qatari volumes will be immense. At current JKM prices, oil indexed LNG is up to $10/MMBtu cheaper than spot. At a 10% slope to JCC oil, the cost difference for a single cargo is more than $45 million (**slides 50-55**). Replacing lost Qatari volumes in the spot market will thus be painful – perhaps prohibitively so for many price-sensitive Asian buyers. Is there any end-use application with margins that justify a $45 million markup? Cheaper alternatives must be sought, and if not available, the temptation will be to go without. Demand destruction must play a big role in balancing the market, especially if Hormuz remains closed for several months. ## Take solace in the long view Looking further ahead, the picture is less catastrophic. The Dutch TTF forward curve gapped up for all maturities as far out as Q1 2027, but long-dated contracts for all subsequent delivery months are still trading at pre-war price levels (**slides 16-18**). Essentially, the long-view is unchanged: gas markets are still heading towards a structurally looser supply panorama. It might just take a bit longer to get there. The economic shock of Middle East regional war is only just starting to be felt, and the worst effects will compound and metastasise over the coming months. But this too shall pass. The enduring human urge for peace and stability always outlasts the fleeting impulses of aggression, greed and hubris that drive conflict. The path to a stable energy future has undeniably become more treacherous, narrow, and expensive. The complexity and chaos of unravelling alliances and deep geopolitical turmoil is not to be taken lightly. At the same time, there is nothing remotely sustainable about all this. When history books are written about the events of 2026, they might describe a fate far less cataclysmic than the one that today, in the midst of war, might seem inevitable. **Seb Kennedy | Energy Flux | 6 March 2026** ****See beyond the fog of war.** Get instant access to this week’s 90-slide ****Chart Deck** and see what the positioning, flows and curves actually say — not what the market is shouting. [👉 Unlock the Chart Deck ](#/portal/signup) **đŸ’„ DOWNLOAD: 90+ slides in .ppsx and .pdf format 👇** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### War profits, quantified URL: https://www.energyflux.news/war-profits-quantified/ Last updated: 2026-04-28T22:53:19.000Z **The Strait of Hormuz is closed. Qatari exports are shut-in. Missiles are raining down across the Middle East
 and the profitability of US LNG is sky-rocketing.** As the US-Iran conflict escalates, European gas and Asian LNG prices are surging. QatarEnergy declared force majeure on its LNG exports on 2 March after liquefaction facilities were damaged by an Iranian drone strike. Without a clear timeline for repairs, the market is scrambling to reprice uncertainty. And the rally is showering additional export value for US LNG volumes entering Europe and Asia. The nominal profit margin of a single LNG cargo delivered into Europe jumped from \~$25 million last week to more than $50 million as of 2 March, according to *Energy Flux* calculations. US LNG profits in Asia also spiked. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/US-LNG-war-profits---Energy-Flux.png) Based purely on today’s prices, exporters and traders of American LNG are set to accumulate roughly **$870 million per week** in additional margin above their pre-crisis baseline. And that rate is climbing. The scale of potential gain depends almost entirely on one variable: duration. New data modelling by *Energy Flux* estimates that American LNG exports could generate up to **$4 billion** in windfall profits if the force majeure remains in effect for one month. This figure could rise as high as **$20 billion per month** if the market is deprived of Qatari supply until the summer. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/Monthly-US-LNG-windfall-profits_001.png) Cumulatively, US LNG war profits rise sharply the longer the Middle East conflict drags on, as prices spiral on physical tightening of global balances. Over the first four months, US LNG profitability could reach more than **$33 billion** above the pre-Iran average. Over eight months, that figure rises to **$108 billion**. And if, in an extreme scenario, Qatari LNG is shut-in for a full year, the excess profits raining down on US LNG traders could stack up to almost **$170 billion** — a figure that would represent one of the most concentrated commodity windfalls of the post-2000 era. To put that in context, the 12-month Ukraine war windfall accruing to US LNG exports, from August 2021 through August 2022, is estimated at **$84 billion**. Iran could, in certain circumstances, eclipse that total in just over six months. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/Cumulative-US-LNG-windfall-profits_001.png) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Qatar in a Strait jacket Qatar’s LNG export terminals, with a nameplate capacity of \~80 million tonnes per annum (mtpa), were shuttered after being damaged in an Iranian drone strike. QatarEnergy’s declaration of force majeure dropped just as insurers [withdrew war-risk insurance coverage](https://www.aljazeera.com/economy/2026/3/3/maritime-insurers-cancel-war-risk-cover-in-gulf-will-it-spike-energy-cost?ref=energyflux.news) for Strait of Hormuz transit, essentially closing the waterway to all commercial traffic. Ships dropped anchor either side of the narrow maritime bottleneck, and Middle East hydrocarbon outflows slowed to a trickle. The effects are only just starting to be felt in global commodity markets. TTF, the European gas benchmark, rallied 70% in two days to settle at €54/MWh ($18.60/MMBtu) on 3 March. The price action was even more dramatic in Asia, the primary destination for Qatari LNG. Platts JKM, the spot LNG benchmark, spiked 96% over the same timeframe to hit $21/MMBtu for May’26 delivery. The extreme response reflects the market factoring in Asian buyers leaning on the spot market to replace lost Qatari supply during a prolonged Hormuz closure. An immense wealth transfer from LNG importing economies to exporters and traders is looming. To gauge the size of the prize, *Energy Flux* developed a bespoke **War Profits Model** to test various assumptions and scenarios. The model assumes European and Asian prices will nearly triple from today’s levels before demand destruction and partial supply responses begin to cap the rally. The model is downloadable and can be modified by users to test different geopolitical outcomes. To be clear, it models worst-case scenarios that may or may not materialise. There are myriad reasons for the most extreme eventualities to be averted, not least the political incentive to avoid another energy inflation cost spiral. The model gauges the size of US LNG netbacks under certain scenarios and price assumptions. It does not seek to establish *who* is in line to benefit from windfall profits. This is determined by contractual arrangements. US LNG exporters with exposure to the spot market, such as Venture Global, are primed to benefit handsomely. But others, which sell most or all of their volumes under long-term Henry Hub cost-plus sales and purchase agreements, less so. In this case, their customers – traders, oil and gas majors, and utilities – will capture the higher rents accumulating from the loss of Qatari LNG. The model establishes the baseline profitability of US LNG before and after the Qatari FM declaration, and calculates the difference between the two as the windfall. Who ultimately benefits is a function of this market structure, and is outwith the scope of the model. ****This model is not a forecast, but an interactive tool.** Premium subscribers can download it, explore the full methodology, and modify the inputs around their own assumptions about how the Middle East war will unfold across energy markets (download link at end of article). ****Get the full picture with instant access:** upgrade your subscription to Premium 👇 [Upgrade ](#/portal/signup) đŸ’„ **Article stats:* 2,800 words, 11-min reading time, six charts, 1 downloadable data model* ## Methodology: How the model works The *Energy Flux* **War Profits Model** is built around a standard LNG netback calculation. For each month in the 12-month projection window, it computes the revenue a US LNG exporter earns from selling a standard cargo into Europe (priced at TTF) or Asia (priced at JKM), after deducting the cost of Henry Hub feed gas (multiplied by 115% to account for liquefaction fuel use), and freight costs to each destination. A standard cargo is assumed to be 3.74 million MMBtu (equivalent to a 160,000 cubic metre LNG carrier). Monthly cargo counts are derived from actual EIA export volume data: 500 Bcf per month in 2026, split 50% to Europe and 37% to Asia (with the remainder going to other markets). These destination splits reflect the actual 2022 pattern, when the Ukraine crisis redirected US supply heavily toward Europe while Asia Pacific remained a strong secondary destination. Windfall is defined as the per-cargo profit above the pre-crisis baseline, multiplied by total cargo volumes. The pre-Iran baseline is derived from actual weekly market data across the six months preceding the force majeure declaration, from 1 September 2025 to 1 March 2026\. This gives a baseline EU cargo profit of $22.1 million and a baseline Asia cargo profit of $21.6 million per cargo, reflecting the relatively modest netbacks available at pre-crisis price levels. The Ukraine benchmark figures are calculated using the same methodology applied to actual historical price data. Both the baseline period (24 February to 23 August 2021) and the crisis period (24 August 2021 to 23 August 2022) are derived from real weekly market observations, making these genuinely comparable data points rather than modelled estimates. ## The Ukraine benchmark: putting the numbers in context The most useful reference point for the Iran scenario is the Ukraine war cycle of 2021-22, which produced the last major LNG windfall for American exporters and remains the most thoroughly documented gas crisis of recent times. Calculating Ukraine-era windfall accurately requires care. Russia did not wait for the February 2022 invasion to begin manipulating European gas markets. From mid-2021, Gazprom began systematically reducing pipeline flows to Europe, driving TTF from less than €30/MWh ($10/MMBtu) to nearly €90/MWh ($30/MMBtu) before the first Russian tank crossed the Ukrainian border. The *Energy Flux* model therefore uses a clean baseline period of **24 February to 23 August, 2021** — six months of relatively undistorted market conditions before the Russian manipulation began. The Ukraine crisis period runs from 24 **August 2021 to 23 August 2022**, spanning both the six-month pre-invasion manipulation phase and the 6-month post-invasion price spike. Over this window, the average profitability of a single US LNG cargo delivered to Europe rose from $16.6 million at baseline to $101.8 million during the crisis. The average per-cargo windfall (profitability minus baseline) was thus $85.2 million on European deliveries. Under this methodology, the total 12-month Ukraine windfall accruing to US LNG exports is estimated at **$83.7 billion**. Against that benchmark, the Iran war windfall scenario is twice as large over a comparable 12-month horizon, at **$168.7** **billion**. Three structural factors explain the difference: - US LNG export capacity has grown materially since 2021-22, adding roughly 2.4x Asia-bound cargo volume and 1.3x European capacity. - The pre-Iran baseline is lower than pre-Ukraine, meaning the gap between normal and crisis conditions is wider. - The projected escalation in EU and Asian prices, while more conservative than the extremes of the Ukraine cycle, is applied to a larger and more globally-integrated US export base. At the Iran scenario’s average monthly windfall rate of $14.1 billion per month, it would take approximately **six months of sustained disruption** for cumulative Iran windfall to exceed the entire Ukraine 12-month total. ## Core assumption & rationale: TTF/JKM price escalation The most consequential element of the model is the price escalation schedule: the assumed path for TTF and JKM prices across the 12-month projection window. Unlike the Ukraine analysis, which uses observed market prices, the Iran scenario requires forward assumptions about how gas markets will evolve. These assumptions are disclosed in full and are deliberately conservative relative to the Ukraine price experience. - **Month 1 (March 2026): TTF $18.50/MMBtu.** This is a modest step up from the \~$17 current price on 3 March. The immediate market response is muted as participants assess the initial disruption and inventory drawdowns begin. Charter markets and shipping routes are already repricing. - **Months 2–3 (April–May 2026): TTF $25–$33/MMBtu.** The supply gap becomes undeniable. European storage refill season is underway, competition for LNG cargoes intensifies, and freight costs rise sharply as Atlantic Basin cargoes ship longer routes to Asia to capture higher netbacks, tightening freight market tonnage. - **Months 4–7 (June–September 2026): TTF $43–$60/MMBtu.** The model’s central case peaks at $60/MMBtu in September 2026 (approximately €180/MWh). TTF surges ahead of JKM, as the EU gas restocking challenge becomes acute. For context, TTF peaked at around $90/MMBtu (nearly €280/MWh) during the August 2022 Ukraine crisis. The Iran TTF price peak is assumed to be lower on the basis that European demand has fallen materially since 2022\. This is a deliberately conservative assumption. - **Months 8–12 (October 2026–February 2027): TTF $58–$42/MMBtu.** Demand destruction in European industry, partial supply substitution from other LNG producers, and potential diplomatic progress all weigh on prices. The model shows a gradual descent toward $42/MMBtu by month 12, still elevated relative to pre-crisis levels but no longer in full-blown crisis territory. Henry Hub is assumed to rise in parallel: from $3.04/MMBtu today toward a peak of $6.50/MMBtu in the model’s central case, reflecting rising US domestic gas demand from LNG facilities running at capacity and some pull-through from global price signals. Higher HH prices reduce netback margins, so a more elevated domestic price path would modestly compress the windfall figures shown here. Users of the model can modify the entire escalation schedule freely. The model is explicitly designed to allow scenario testing. A more bearish price path — say, a swift diplomatic resolution within two months and TTF peaking at $25/MMBtu — produces drastically different results. So does a more bullish one. The numbers presented here represent one plausible central case, not a range of outcomes. That range is captured in the sensitivity analysis. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/Price-is-everything_001.png) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/Timing-is-everything_001.png) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/Volume-is-everything_001.png) Sensitivity analysis: Iran US LNG windfall profits under differing price, duration and export volume scenarios #### Important caveats: what the model shows, and what it omits The figures above are the output of a quantitative model, not a market forecast. They are designed to answer a specific, bounded question: given reasonable assumptions about how European and Asian prices might evolve during a sustained Qatari supply disruption, what additional gross profit would flow to US LNG exporters above the pre-crisis baseline? The model is deliberately transparent about what it captures and what it does not. It captures the netback economics of exporting a standard LNG cargo — destination price minus Henry Hub feed gas cost, minus liquefaction toll, minus freight — applied to actual US export volumes and destination splits. Everything else is excluded by design. What the model does **not* capture is equally important. - It makes no allowance for demand destruction at high prices, which would be substantial in European industry above $50/MMBtu. - It assumes no meaningful competing supply response from Australia, Norway, Russia or other producers, all of which would divert cargoes to premium markets and dampen the rally. - It treats US LNG export volumes as constant at 500 Bcf per month regardless of price signals, which would not be the case in practice. - And it calculates gross windfall (the additional revenue above the pre-crisis baseline), not net profit after taxes, hedging positions, corporate overhead, or royalties. These are not apologies for the model. They are the necessary framing for any reader who wants to understand its limitations. The numbers represent a plausible upper bound: the windfall the market **could* deliver to US exporters under a sustained, unmitigated disruption. Reality will probably land somewhere short of that, at a point determined by geopolitics, diplomacy, insurance markets, and demand elasticity. The model’s value lies not in predicting where that point is, but in quantifying the stakes. ## Duration is everything If there is a single variable that matters most in this analysis, it is the duration of the Strait of Hormuz closure and Qatari LNG outage. The sensitivity analysis makes this stark. A one-month disruption generates **$3.8 billion** — significant, but within the noise of normal commodity market volatility. A three-month disruption yields **$19.8 billion**. At six months, cumulative windfall reaches **$69.4 billion**. The jump to a nine-month disruption — **$125.8 billion** — represents the point at which market structures begin to change: EU storage injections are subsidised or stall, and European industrial demand craters (again). At 12 months, the **$168.7 billion** total represents something qualitatively different: a sustained structural shift in who captures value from global gas markets. It would be among the largest commodity windfalls in recent history, concentrated almost entirely in the United States and accruing principally to the operators and long-term offtakers of the six major US LNG export complexes: Sabine Pass, Corpus Christi, Cameron, Sabine Pass Train 6, Freeport, and Cove Point, together with the upstream gas producers whose molecules they liquefy. The duration variable is, at present, entirely a function of geopolitics. A rapid diplomatic resolution could truncate the disruption within weeks and render the analysis presented here as moot. This would require Iranian assurances of non-interference with Strait of Hormuz traffic, and the restoration of war-risk insurance coverage. The same outcome could result from sustained US Navy protection guarantees for commercial tanker traffic through the Strait (although this appears questionable as [doubts swirl](https://www.lloydslist.com/LL1156505/US-signals-U-turn-on-naval-convoys-to-restart-Hormuz-transits?ref=energyflux.news) around the US Navy capacity to escort shipments). In either case, accelerated repair of damaged Qatari export infrastructure is also a prerequisite. ## Risk skewed to the upside As of the date of this analysis, the geopolitical signals are not pointing toward rapid de-escalation. Iran’s Islamic Revolutionary Guard today [claimed full control](https://www.aljazeera.com/news/2026/3/4/irgc-says-iran-in-complete-control-of-strait-of-hormuz-amid-trump-threats?ref=energyflux.news) of the Strait of Hormuz, in defiance of US president Donald Trump’s pledge to guarantee safe passage. Meanwhile, Iran’s violent scattergun response is provoking neighbours and drawing neutral parties into the war. At the same time, Israeli [rhetorical pressure](https://www.politico.eu/article/europe-war-iran-israel-eu-ambassador-avi-nir-feldklein/?ref=energyflux.news) seeks to engage Europe in the conflict. None of these developments necessarily leads to a full-blown regional war. History is full of crises that looked irreversible at their peak and resolved through back-channel diplomacy that was invisible to markets. The pattern of escalation and managed de-escalation has been the defining feature of Middle Eastern geopolitics for decades. But the structural difficulty of putting this genie back in the bottle should not be underestimated. The QatarEnergy force majeure is not simply a logistical disruption; it is proof that the global LNG supply chain, which has operated with remarkable resilience since the first Qatar LNG trains came online in 1996, is now exposed to direct physical disruption at its most concentrated point. Markets have not fully priced in the duration risk. TTF at \~$17/MMBtu on the day the force majeure was declared reflects a market that is digesting an unexpected event, not one that has concluded the disruption will be sustained. The escalation schedule in this model is an attempt to trace a plausible price path if the market progressively prices in a prolonged outage. The model does not predict that outcome. It quantifies the consequences if it occurs. What we can say with confidence is that the economic incentive structure has shifted dramatically. US LNG exporters are now the marginal supplier for a significant share of global gas demand. The wider and longer the supply gap, the more extraordinary the rents they can extract. The market, in its present configuration, rewards the continuation of disruption with parabolic escalation. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/US-LNG-windfall-profits-in-Asia_001.png) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/US-LNG-windfall-profits-in-Europe_001.png) How high will the windfall profits climb? ## Download the model The complete model is available for download to Premium subscribers, via the link below the paywall. It is built in Excel and is fully interactive: every assumption in the price escalation schedule, every volume figure, and every cost parameter can be modified directly. The model includes a sensitivity analysis covering TTF price scenarios, disruption durations from one to twelve months, and export volume assumptions. A ‘Read Me’ tab explains the methodology, the editable inputs, and the key caveats in full. To be clear and to reiterate: the model is an analytical tool designed to help readers understand the economic stakes of different scenarios. It is not a forecast, not a trading signal, and not a prediction of market outcomes. The assumptions driving the central case are disclosed and debatable. The purpose is to equip readers with a framework for thinking about how geopolitical events translate into US LNG export economics, not to provide a definitive answer to a question that geopolitics has not yet resolved. **Seb Kennedy | Energy Flux | 4 March 2026** --- **👇 MAKE IT YOURS: Download the *Energy Flux* War Profits Model (Premium subscription required) 👇** _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Iran: US Energy Dominance laid bare URL: https://www.energyflux.news/iran-war-us-energy-dominance-laid-bare-lng-gas-geopolitics/ Last updated: 2026-03-02T16:37:06.000Z Hours before US and Israeli warplanes began pummelling Iran on 28 February, Oman’s foreign minister Badr Albusaidi [told CBS](https://www.cbsnews.com/news/us-iran-deal-within-our-reach-oman-mediator-says/?ref=energyflux.news) that a breakthrough had been reached in nuclear talks. Iran had agreed to zero stockpiling of enriched uranium with full International Atomic Energy Agency verification, a concession that went further than anything achieved under the JCPOA, the Obama-era Iran nuclear agreement. A new deal, Albusaidi said, was “within our reach”. It was not reached. Instead, Operation Epic Fury killed Supreme Leader Ayatollah Khamenei, flattened military and civilian infrastructure across Iran, and triggered retaliatory missile strikes on the United Arab Emirates, Kuwait, and Bahrain. President Trump’s 2:30am [video statement](https://apnews.com/article/iran-us-trump-address-f662a4f3378535d81197be699fb35a3e?ref=energyflux.news) made the objective explicit: regime change. A diplomatic off-ramp existed, but was torched. The question the world must confront is not whether this war was avoidable, but who benefits from it. The Strait of Hormuz is the [jugular of the global LNG trade](https://www.energyflux.news/strait-of-hormuz-on-the-brink-iran-us-tensions-standoff-lng-oil-gas-qatar/). Qatar ships more than 80 million tonnes per annum (mtpa) of LNG through this 33-kilometre bottleneck, around one fifth of total global supply. Its buyers are overwhelmingly in Asia: China, South Korea, Japan, India, Taiwan, Pakistan and Bangladesh collectively absorb more than 80% of Qatari cargoes under long-term, oil-indexed contracts stretching as far out as 2050. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/World-weekly-annual-LNG-exports-via-Strait-of-Hormuz.png) In peacetime, tankers load at Ras Laffan, transit Hormuz, and deliver on schedule. In open conflict, that choreography disintegrates. Iran has already demonstrated its willingness to strike back by launching missiles at countries hosting US bases. Credible threats to safe passage through Hormuz, even without a full closure, are enough to spike war-risk insurance premiums, disrupt shipping schedules, and force buyers to scramble for alternatives. Qatar this morning [suspended](https://www.qatarenergy.qa/en/MediaCenter/Pages/newsdetails.aspx?ItemId=3892&ref=energyflux.news) LNG production after its Ras Laffan and Mesaieed industrial facilities were damaged by Iranian drones. The company is expected to declare force majeure on LNG exports. QatarEnergy will do everything in its power to honour as many of its contractual commitments as possible, likely by arranging swap deals to redirect cargoes from other sources. But the capacity to do this is tiny compared to the immensity of the lost LNG volumes. Everything now depends on two variables: the duration of the conflict, and the willingness of insurers to underwrite passage through a contested waterway. If war-risk premiums become prohibitive, or if a single LNG carrier is struck, the entire edifice of Qatari LNG trade is at risk of prolonged paralysis, regardless of how long the FM declaration lasts. The pricing implications are savage. Dutch TTF soared +30% to €45/MWh during trade on Monday, and JKM futures – the Asian spot LNG benchmark – soared +40%. And this is just the start: markets are pricing in uncertainty, not physical tightening, because LNG shipments take weeks to arrive. As Qatari LNG outflows dry up, Asian buyers will turn to the spot market to make up for the shortfall. Qatar’s long-term contracts are overwhelmingly oil-indexed, meaning the cost of replacement cargoes rises in lockstep with crude prices that are themselves surging on a colossal Iran risk premium, since around 20% of world crude supply transits the same Hormuz chokepoint. Buyers forced into the LNG spot market face a double hit: higher benchmark prices and a shrinking pool of available cargoes. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Disruption beyond borders The fallout extends well beyond Hormuz. Israel [suspended](https://english.ahram.org.eg/NewsContent/3/16/563149/Business/Energy/Israel-suspends-gas-exports-to-Egypt-amid-regional.aspx?ref=energyflux.news) 1.1 billion cubic feet per day (Bcf/d) of natural gas exports to Egypt on 28 February, invoking force majeure on supply contracts from the Tamar and Leviathan offshore fields. Egypt, which only last year signed a [landmark $35 billion, 15-year gas import deal with Israel](https://www.spglobal.com/energy/en/news-research/latest-news/natural-gas/121825-israel-approves-35-bil-egypt-gas-export-deal?ref=energyflux.news), is scrambling to bring forward contracted LNG deliveries. A country that had been wavering on the edge of energy self-sufficiency is now pivoting back to net LNG importer status, adding incremental demand to an already tightening Atlantic market. Then there is Turkey. Iran supplied 8.2 billion cubic meters (Bcm) of pipeline gas to Turkey in 2025, making it Ankara’s second-largest supplier after Russia. Those flows are now at risk. The Tabriz–Ankara pipeline, with a nameplate capacity of 14 Bcm per year, runs directly through Iranian territory that is being systematically targeted by US and Israeli ordnance. Even a temporary outage would force Turkey to procure additional spot LNG cargoes at precisely the moment when every spare molecule is being bid up. On a monthly basis, Qatar alone ships roughly 6.7 million tonnes of LNG through the Strait of Hormuz; Israeli gas to Egypt amounts to around 700,000 tonnes of LNG-equivalent; Iran’s pipeline exports to Turkey translate to roughly 500,000 tonnes of additional LNG demand. That is close to 8 million tonnes of supply at risk or requiring replacement if Hormuz transits and wider Middle East gas exports are compromised. All of this could happen in a market where the margin of comfort is already thin. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/03/Middle-East-gas-LNG-disruption-map.png) A month-long disruption is not impossible; Iran [rehearsed](https://maritime-executive.com/article/report-iran-loaded-out-naval-mines-in-preparation-to-close-hormuz?ref=energyflux.news) its mine-laying capability last June in preparation for conflict. If Iranian forces deploy subsea explosives, their removal would require not just a ceasefire but dedicated US Navy minesweeping operations. In the best case, disruptions are short-lived and resolved through swaps, rerouting, and de-escalation within days. In the worst case, an extended conflict and insurance market paralysis could remove supply from global markets for weeks or months, replicating the conditions of late 2021 and the subsequent price shock of 2022. Which brings us to the real story: Donald Trump’s Energy Dominance agenda. 💡 Get the full picture amid fast-moving energy conflict: join the dots on geopolitical developments with a ****Premium** subscription to **Energy Flux* — the home of fiercely independent market analysis [Subscribe now for instant access ](#/portal/signup) _This post is for subscribers on the Premium tier only._ ### The storage-speculation nexus: revisited URL: https://www.energyflux.news/the-storage-speculation-nexus-revisited/ Last updated: 2026-02-26T09:22:32.000Z Hedge funds are back in familiar territory. Once again, speculative capital is piling into prompt and summer-dated Dutch TTF gas futures contracts, positioning to profit from Europe’s annual gas refill challenge. Proprietary analysis by *Energy Flux* reveals investment funds are placing big bets on EU gas prices rising over the summer months, driven by the need to enter next winter with enough of the fuel held in storage to avoid physical shortages. On the surface, this looks like a replay of the past few years. But the underlying driver has changed, and that’s what makes the current setup more revealing. Previously, this trade thrived because [rigid EU storage mandates](https://www.energyflux.news/storage-speculation-nexus-part-2-natural-gas-ttf-eu/) made refill demand predictable and non-negotiable. Funds could front-run a regulatory requirement, go long summer, and let policy do the rest. This year, the scaffolding has been loosened. Storage targets [were relaxed](https://www.energyflux.news/burning-the-house-down/). Europe entered winter with lower inventories than in recent years. And yet the trade is back, arguably stronger. Why? Because Europe is leaving winter with storages depleted to their lowest level since the unprecedented energy crisis of 2022. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/02/GAS-STORAGE-DEPLETION_001.png) EU storage operators now need to buy a lot more gas simply to return to a credible energy-security buffer ahead of next winter. Not because Brussels says so, but because the European energy system is still hopelessly reliant on gas and LNG to function. The result is the same familiar ritual: - Exit winter with acutely depleted storage levels (and headlines screaming about impending doom) - Spend the summer scrambling to restock in a haphazard, uncoordinated way - Create a clean, calendar-driven opportunity for financial players to extract value Europe may have stepped away from rigid mandates, but it has not escaped the **Storage**\-**Speculation Nexus**. It has merely replaced regulatory certainty with structural necessity. Different rationale, same outcome. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## What the market is telling us now Current positioning shows speculative interest crowdedinto the front and mid-curve, with notable focus on **summer delivery months** relative to the winter 2026-27 contracts. This is a strong indicator that investment funds are holding long positions and options in maturities that coincide with the refilling season. Evidently, funds see little upside once Europe moves beyond the next refill cycle. *Energy Flux* analysis reveals that this structure has been in place since the [violent short squeeze in mid-January](https://www.energyflux.news/short-squeeze-ttf-eu-gas-market-price-spike-winter/), which forced funds into prompt contracts and never really unwound. The curve didn’t revert; it reorganised around the ‘gas storage refill stress’ trade. While headlines scream of (misplaced) panic, the market is quietly pricing in predictable procurement pressure. This is entirely rational in a deregulated, liberalised market that relies on market mechanisms and price signals to achieve energy security objectives. #### ****What is The Storage-Speculation Nexus?** Fund behaviour was first mapped out in a three-part Deep Dive series, which was published in **Energy Flux* in 2024 and early 2025 (see **The Storage-Speculation Nexus, parts* [**one*](https://www.energyflux.news/the-storage-speculation-nexus/)**,* [**two*](https://www.energyflux.news/storage-speculation-nexus-part-2-natural-gas-ttf-eu/) *and* [**three*](https://www.energyflux.news/the-storage-speculation-nexus-part/)). The series asked a simple but often overlooked question: - **Which TTF contracts are speculators actually trading?* Rather than taking at face value the aggregate net long/short position published in the ICE Endex Commitment of Traders report, the research used regression analysis to show that capital concentrates in specific calendar months. Usually, those most exposed to storage refilling dynamics. That work later formed the basis of my [****Gastech 2025** presentation](https://www.energyflux.news/gastech-2025-presentation-mapping-the-storage-speculation-nexus/). I subsequently recorded a walkthrough for those who couldn’t attend; if you want a full explanation of the methodology, this is a good place to start (check it out [via this link](https://www.energyflux.news/gastech-2025-presentation-mapping-the-storage-speculation-nexus/)). ## Mapping the storage-speculation nexus, every week Previously, this insight was delivered only periodically via bespoke analysis published in standalone Deep Dives. Now, that work has been fully embedded into the *Energy Flux* **Chart Deck**. Subscribers on the **Premium** and **Chart Deck** tiers can now track, on a rolling weekly basis: - Where speculative capital is concentrating along the TTF curve - How that focus shifts as storage pressure builds or eases - When the market is trading refill stress, and when it isn’t At the same time, the Chart Deck has been expanded with **more granular EU gas storage analysis**, including: - Weekly storage levels versus seasonal norms - Weekly injection and withdrawal rates relative to historical averages Together, these tools make it easier to see how Europe’s physical constraints translate into financial behaviour, without needing to infer intent from price action alone. ## Why this matters Europe keeps telling itself that each year is different. The market keeps proving otherwise. Whether driven by regulation or necessity, the outcome is the same: **summer refilling becomes a tradable event**, and TTF remains an easy venue for short-term capital to monetise it. The revamped Chart Deck is designed to track that process as it unfolds: clearly, consistently, and without the noise. ****If you want to understand** ***where** **the EU gas market is trading risk, the Chart Deck is built for you.** Subscribers get full access to weekly insight into speculative positioning, storage stress, and the invisible parts of the TTF curve that actually matter. This includes the TTF Risk Model, TTF Sentiment Tracker, global FOB LNG netbacks & inter-basin arbitrage analysis, Asian LNG oil indexation competitiveness, global LNG flows by region, LNG glut tracker, and lots more... [👉 Unlock the Chart Deck 👈 ](#/portal/signup) **đŸ’„ DOWNLOAD NOW: 90+ slides in .ppsx and .pdf format 👇** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Dwindling EU gas stocks amplify Hormuz risk premium URL: https://www.energyflux.news/dwindling-eu-gas-stocks-amplify-hormuz-risk-premium/ Last updated: 2026-02-20T10:53:43.000Z **European gas markets are entering a period of heightened sensitivity, where geopolitical friction is intersecting with a fundamentally tighter near-term supply-demand balance than markets had anticipated at the end of last year. At the same time, market sentiment is steadfastly neutral in the face of competing directional pressures.** This week’s **Chart Deck** breaks it all down in granular detail with the usual mix of exchange data, fund positioning, regional LNG physical flows, proprietary analysis of US LNG netbacks, arbitrage economics, and rolling assessment of the Asian spot market versus oil indexed LNG. 💡 **Here’s the must-read overview (premium subscribers can download the full* ***80-slide Chart Deck** *via the paywalled link below).* ## Running on fumes The geopolitical risk premium made a noisy return on Thursday, 19 February, when the front-month TTF contract (Mar-26) jumped by almost 10% (**slide 9**). The trigger was a repricing of potential disruptions to Qatari LNG exports passing through the [Strait of Hormuz bottleneck](https://www.energyflux.news/strait-of-hormuz-on-the-brink-iran-us-tensions-standoff-lng-oil-gas-qatar/), following further escalation in US-Iran tensions. While such a supply shock remains hypothetical (and frankly suicidal for the Islamic regime in Tehran), the market’s sharp reaction underscores how low inventories have left the European system with little margin for error. This underlying fragility is rooted in the current state of European underground gas storage. Aggregate EU stocks have fallen below 32%, a level more than 14 percentage points lower than the long-run seasonal average. This is not merely a statistical outlier; it represents a tangible depletion of the buffer that historically insulated the market from late-winter cold snaps or supply disruptions (**slides 42-44**). Depletion leaves the market more sensitive to other supply risks, which explains the scale of the Hormuz premium repricing. Storage tightness is a primary reason the **TTF Risk Model** maintains a marginally bullish bias, even as other indicators flash more neutral signals. Indeed, the market’s directional conviction appears to be in a state of flux. While the physical fundamentals are tightening, financial positioning tells a more complex story. ## Funds flee TTF...? In a notable divergence, hedge funds kept their net long positions virtually unchanged in the week preceding the Iran-induced price jump. More striking, however, is the sharp contraction in market participation: the number of funds actively trading TTF futures has dropped to 415, a significant retreat from the record high of 465 seen in January (**slide 23**). This exodus of marginal capital raises a critical question: is this a temporary blip, with funds merely rotating out of positions before re-entering with renewed conviction, or does it signal a more profound shift in how speculative capital views the near-term risk-reward profile of European gas compared to other tradable commodities? For now, the **TTF Sentiment Tracker** captures this ambiguity, pegging sentiment as effectively neutral last week (**slide 20**). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## LNG glut, where art thou? Adding another layer of complexity is the contrasting performance of the LNG market. Europe continues to act as the global sponge for surplus supply, having absorbed 17% more LNG since the start of the year compared to the same period in 2025 (**slide 75**). This voracious appetite has been instrumental in absorbing burgeoning global supply growth, effectively masking what would otherwise be a more pronounced supply-demand mismatch (**slide 72**). In parallel, the contours of the long-anticipated LNG supply ‘glut’ are evolving. The near-term wave of new supply keeps shifting to the right, even as the scale of the onslaught grows at the outer reaches of the decade. Qatar’s decision to delay the start-up of its North Field East megaproject has trimmed 9 Bcm (-15%) from the 2026 liquefaction build-out. Simultaneously, the long-term horizon is expanding, with the restart of construction at the Mozambique LNG project adding 17.5 Bcm to the 2030 capacity outlook (**slides 88-89**). The narrative is therefore shifting: rather than an abrupt, overwhelming surge in supply, the market now faces a less aggressive near-term ramp-up, but one that promises a longer, more sustained period of excess capacity well into the next decade — if it ever actually shows up, that is. ****Volatility is noise. Nuance is signal.** Get instant access to this week’s 80-slide ****Chart Deck** and see what the positioning, flows and curves actually say — not what the market is shouting. [👉 Unlock the Chart Deck ](#/portal/signup) **đŸ’„ DOWNLOAD: 80+ slides in .ppsx and .pdf format 👇** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### AI data centres: quantifying the gas burn URL: https://www.energyflux.news/ai-data-centres-quantifying-the-gas-burn/ Last updated: 2026-02-20T04:34:55.000Z For more than a decade, the US natural gas market has been defined by abundance. Production growth was fast, costs fell, bottlenecks were temporary, and every new source of demand — power consumption, LNG exports, industrial use — was ultimately absorbed by another wave of shale supply. Prices spiked occasionally, but structurally the system felt loose. **That sense of slack is now being tested from multiple directions at once.** The second wave of US LNG exports is still ramping, with several large projects scheduled to start up over a few short years. At the same time, upstream growth looks less elastic than it once did: core shale basins are more mature, capital discipline remains a constraint, and unlocking dedicated new gas supply requires structurally higher prices than associated gas wells tied to oil economics. Overlay all of that with surging buildout of power-hungry artificial intelligence (AI) data centres, and the old assumption that supply will always stretch to meet demand starts to look less secure. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. What makes this moment tricky is not just the scale of these forces, but how closely they are intertwined and the absence of coordination. There is no overarching masterplan guiding the role of gas in AI energy consumption, US LNG exports and shale supply. The big trade-off decisions are being left to the market, the ultimate arbiter of efficiency. The trouble is, efficiency in one subdomain of the gas market can have unintended consequences in others, especially in a market at tipping into a structurally tighter price regime. If securing marginal natural gas supply becomes a zero-sum game, which part of the economy wins — and at whose expense? LNG exports pull domestic gas supply into long-term, relatively inflexible global contracts. Data centres demand reliability and uptime, not just cheap electrons. Upstream supply responds with lags, uncertainty, and rising marginal costs. The result is a gas market structurally prone to shocks and lacking a means of self-regulating supply-demand imbalances. And yet, despite the growing focus on AI power demand in headlines, there is surprisingly little rigorous, transparent modelling that tries to quantify what this might actually mean for US gas balances and the LNG export boom. Most commentary oscillates between breathless claims of a new “electricity supercycle” and casual dismissal: “shale gas is infinitely scalable, efficiency gains will fix this”. Neither extreme is particularly helpful. This subscriber-only **Deep Dive** mini-series is an attempt to sit in the uncomfortable middle. To bring nuance and an analytical framework to a space defined by hype, fear and complacency. This first instalment focuses on the **US power sector**, and specifically the [\~250 GW pipeline of gas power plants](https://globalenergymonitor.org/report/betting-big-on-data-centers-u-s-now-leads-world-for-new-gas-power-development/?ref=energyflux.news) being developed to meet rising electricity demand, including from AI data centres. Rather than starting with price forecasts, ideological biases or sweeping conclusions, the approach is to create plausible capacity deployment pathways out to 2035. To do this, *Energy Flux* is today publishing a proprietary constraint model that creates a range of outcome scenarios for the American market. The model uses defensible assumptions to see where the pressure points emerge. Think of it less as a forecast and more as a data voyage into uncertain territory: mapping what *could* happen if stated intentions start to collide. The question is simple but surprisingly hard to answer: If America’s gas-fired power pipeline actually materialises, even partially, how much additional gas demand could it plausibly create? #### Key findings: AI could make or break the US gas market 👇 The first run of the Constraint Model delivered some useful insights. - If the ****AI boom goes bust** and data centres use gas mostly as a back-up power source, additional gas power burn in 2030 could be as little as ****2 Bcf/d** (+6% above the Energy Information Administration baseline) - In the most likely scenario characterised by ****heavy usage of limited capacity** for energy-intensive AI model training runs, that figure could rise to around ****5 Bcf/d** (+15% above EIA baseline) - If gas turbine lead times are shortened and ****capacity installation rates surprise to the upside**, data centre gas burn could exceed ****10 Bcf/d** (+30% above EIA baseline) - Regardless of capacity and utilisation, ****gas power generation peaks in 2032 in all scenarios** as renewables, storage, and price-responsive dispatch start to dominate America’s electricity mix. đŸ‘©â€đŸ’» The **Energy Flux* ****Constraint Model** is fully downloadable and customisable, allowing users to tweak the default scenarios according to their own criteria and assumptions. The second instalment in this series, due in the coming weeks, will take these incremental power-sector gas demand scenarios and place them alongside **US LNG ramp-up and upstream supply trajectories**, to see where tensions emerge and what would have to give for the market to balance. This matters beyond the US because global gas markets are increasingly tethered to Henry Hub, the benchmark traded gas price. More US LNG means more Henry Hub-indexed supply feeding Europe and Asia. Structural shifts in US domestic gas balances therefore don’t stay domestic for long: they ripple outward, with global consequences. There is widespread speculation (not least [on these very pages](https://www.energyflux.news/data-centres-vs-us-lng-america-gas-power-demand/)) that the AI boom might be the straw that breaks the camel’s back. Part two will test that hypothesis with rigorous data-driven analysis. Before we get there, though, we need to understand the power sector piece properly. That’s the focus of today’s article. ****Why subscribe?** This is not a Hot Take or a one-chart story. It’s a methodical, adaptable solution to a problem that will define gas and LNG markets well into the next decade. Subscribers on the ****Premium** and ****Deep Dive** tiers get full access to the Constraint Model, customisable assumptions, caveats, and scenario logic; not just the high-level conclusions. If you need an analytical tool for weighing up the competing demands on US natural gas, this series is for you. [👉 Get instant access 👈 ](#/portal/account/plans) đŸ’„ ***Article stats* *: 3,800 words, 14-min reading time, 9 charts & tables, 1 interactive Data Model download*** --- _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Cold shoulder URL: https://www.energyflux.news/cold-shoulder/ Last updated: 2026-02-12T11:48:01.000Z **With the winter drama now firmly in the rear-view mirror and the bearish shoulder season approaching fast, European gas markets are once again searching for a coherent narrative. The cold shocks are all but gone, the recent panic has faded, and the market is left to grapple with a familiar but uncomfortable question: what actually matters now?** This week’s **Chart Deck** breaks it all down in granular detail with the usual mix of exchange data, fund positioning, regional LNG physical flows, proprietary analysis of US LNG netbacks, arbitrage economics, and rolling assessment of the Asian spot market versus oil indexed LNG. 💡 **Here’s the must-read overview (premium subscribers can download the full 80+ slides via the paywalled link below).* ### The Basis that bites both ways The most under-discussed signal is the SparkNWE basis, which reflects the price of LNG in north-west European waters as a discount to Dutch TTF, the benchmark price for EU gas trade. The assessment is a proxy for the value of LNG regasification capacity: in a benign market it trades in a narrow band, as LNG can find a home without running into infrastructure constraints. When it blows out, something is usually afoot. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/02/SparkNWE-TTF-basis_001.png) **Data from Spark Commodities* The SparkNWE basis has now widened beyond $1/MMBtu (**slide 39**), its highest point since October 2023\. In today’s febrile betwixt-between market, this is contradictory. On the one hand, it points to excess LNG sloshing around the Atlantic Basin, struggling to find a home. On the other, it implies rising scarcity value for north-west European regas capacity as the summer refill challenge comes into focus. Both signals coexist uneasily, and the market has not yet decided which one deserves more weight. Perhaps the best read of it is this: too much LNG, running into pinch-points in a European gas system that has too much capacity in all the wrong places. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ### Storage: prudence or panic? That ambiguity is reinforced by the state of EU gas inventories. Stocks are now scraping the barrel of historic norms (**slide 44**), uncomfortably low for this point in the calendar. The key question is whether this reflects rational, proactive destocking in response to still-elevated prompt prices and the prospect of a flood of cheaper molecules, or something more structural. If storage holders are simply seeking to crystalise extrinsic value ahead of refill season, the signal is benign. If, instead, inventories are low because there’s a genuine physical scarcity problem, the market may be underpricing the vulnerability this creates later in the year. Either way, European refilling demand will keep a floor under summer hub prices, and this is reflected all along the 2026 forward curve (**slide 10**). ### Widow-maker arbitrage Shipping and global price signals add another layer of complexity. LNG freight rates remain depressed (**slide 40**), while the TTF premium over JKM has practically vanished (**slide 11**). Together, these dynamics are supporting the tentative reopening of the US LNG arbitrage to Asia (**slides 62–64**), with inter-basin flows from other Atlantic locations (such as Nigeria) looking marginally viable again (**slide 41**). In theory, cheap LNG shipping rates and a tight EU-Asia spread should encourage cargoes to drift east. In practice, however, long-haul arbitrage remains fraught and a slew of extreme diversions executed at the height of the mid-January panic are now starting to look almost ridiculous (Australia to Europe, open for orders – any takers?). Long delivery times and narrow pricing windows mean that many laden cargoes have been left zig-zagging across basins, chasing a moving target. The most profitable destination can shift multiple times mid-voyage, turning what looked like a clean arbitrage into a risk-strewn meander that stacks charter costs onto vanishing import prices (**slides 67–73**). The result is a struggle to monetise optionality, and a fickle market that punishes lack of conviction. ### Sentiment, risk pricing and complacency Against this backdrop, *Energy Flux* sentiment indicators are striking a nuanced tone. The **TTF Sentiment Tracker** has slipped back into bearish territory (**slide 20**), reflecting a market surprisingly complacent in light of recent price spikes. At the same time, the **TTF Risk Model** remains conflicted between a softening TTF prompt premium and record-low storage levels (**slides 33–36**). Regardless of the motive, destocking materially increase exposure to shocks, yet prices and volatility are behaving as if the system is stable. That tension may be the most important signal of all. With geopolitics unusually calm and risk premia compressed, the market is implicitly betting that nothing goes wrong. History suggests that is rarely a safe assumption. Low stocks do not matter until they suddenly matter a great deal, and when they do, repricing tends to be violent. Just cast your mind back by a few weeks. For now, the gas market is drifting into shoulder season with a bearish tilt, but with latent fragilities hiding in plain sight. Keep an eye east, and keep an eye south. Iran, in particular, is conspicuous by its absence from pricing. As last week’s [**Deep Dive**](https://www.energyflux.news/strait-of-hormuz-on-the-brink-iran-us-tensions-standoff-lng-oil-gas-qatar/) argued, the risk premium can resurface at a moment’s notice on the tiniest signal of escalation, because the potential for unintended outcomes is so large. ****Volatility is noise. Nuance is signal.** Get instant access to this week’s 80-slide ****Chart Deck** and see what the positioning, flows and curves actually say — not what the market is shouting. [👉 Unlock the Chart Deck ](#/portal/signup) **đŸ’„ DOWNLOAD: 80+ slides in .ppsx and .pdf format 👇** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The cost of volatility URL: https://www.energyflux.news/the-cost-of-volatility-ttf-natgas-natural-gas-trading-price-spikes/ Last updated: 2026-02-06T08:00:41.000Z **The superficiality of the recent winter price rally on EU and US natural gas trading hubs has become clear in the way that investment funds have repositioned since the rally.** Hedge funds did not add much length during the [price spike](https://www.energyflux.news/volatility-is-exploding-fundamentals-are-not/), and last week they even sold down some TTF long positions as prices returned to earth. Evidently, funds see only limited upside as the market shifts from late winter and into early spring. This is further evidence that the January spike was an opportunistic weather-driven short squeeze and equally violent reversion, not a shift back into a bullish pricing regime. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/02/Histrionic-hedge-funds-drive-TTF-volatility_001.png) The predilection of global natural gas trading hubs to over-react to fast-changing fundamentals is nothing new. But the scale of that over-reaction is pushing the envelope on volatility, complicating even the most robust risk management strategies. When bidirectional double-digit price swings can clatter through both long *and* short stops in a matter of days, hedging costs and collateral requirements rise for all market participants. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ### Trading costs on the rise Intercontinental Exchange this week [hiked margin rates](https://www.ice.com/publicdocs/clear%5Feurope/irmParameters/harmonized/ENERGY%5FMARGIN%5FSCANNING%5F20260206.CSV?ref=energyflux.news) by almost 50% for the front-month TTF contract (March '26), with smaller increases applied for contracts further out on the curve. ICE sets margin rates for TTF futures primarily to protect the clearinghouse and market participants from default risk in a highly volatile market. These rates are dynamically adjusted based on real-time market conditions, and should be reduced as things calm down a bit. Still, the requirement to carry much larger amounts of capital in case weather-driven sentiment turns against a trader’s position eats into margins and drives up the cost of managing risk in the derivatives market. For funds and speculators, this ties up capital, increases financing costs, and directly reduces potential returns. A sudden large increase can force traders to liquidate positions to meet calls, impacting their profitability and trading strategy. For physical players hedging their exposure in derivatives, higher margins make it more expensive to maintain positions. Part of this elevated risk management cost can be factored into their long-term pricing, which is ultimately passed onto consumers in the form of higher retail tariffs. The link is not immediate or direct, but it is real. ### Haunted by the 2022 crisis In 2022, at the height of the energy crisis when TTF prices went stratospheric, margin rates underwent successive rapid increases. In fact, “between the low\[ prices\] of 2018 and the highs of 2022, there was a 60-fold difference in margin levels,” according to FIA, a trade body representing the commodity futures industry. “Businesses were forced to make decisions between closing out hedges to reduce margin or resorting to high-cost borrowing to meet the calls. Some firms were brought to the brink of collapse by the rapid increase in margin levels required to cover potential future losses,” FIA said in a [2024 blog post](https://www.fia.org/marketvoice/articles/margin-requirements-and-liquidity-planning-four-case-studies-commodity-futures?ref=energyflux.news). We are a *very* long way away from the insanity of 2022\. But the aftershocks of those events still reverberate through the market at times of heightened uncertainty. One outlandish weather model run, and fear can spread like contagion. If managing physical risk in the derivatives market becomes an expensive and risky endeavour in itself, then more trades could shift off the major exchanges and move elsewhere. For example, commercial operators could seek bilateral trades in over-the-counter (OTC) markets, where there is less transparency more counterparty risk than on ICE, EEX or CME. Ultimately, when hedging on-exchange becomes prohibitively expensive, the market’s search for alternatives may trade one set of risks for another: one that is less visible and less *quantifiable*. Mass migration off exchanges and into OTC markets would be an extreme outlier scenario. But if recent events prove anything, it is that unthinkable outcomes can transpire at short notice. [Start the discussion on Flux Exchange](https://exchange.energyflux.news/?ref=energyflux.news) --- ## **Chart Deck**: the risks of returning to normality This week’s subscriber-only **Chart Deck** is a far less dramatic affair than recent editions. But in today’s gas markets, tranquillity does not equate to plain sailing. #### HIGHLIGHTS - The ****TTF Sentiment Tracker**’s bullish signal has retreated from prior week extremes as hedge funds curbed their rate of short selling and starting selling off long positions too (****slide 20**). - At the same time, the ****TTF Risk Model** swung back to moderately bullish-underpriced territory (****slides 33-36**) driven by moderation in TTF curve slope backwardation (****slide 12**) and an incipient recovery in seasonal calendar spreads (****slide 13**). - With natural gas hub prices coming swiftly back down to earth, LNG trade economics are being subjected to competing push-pull incentives. - As Dutch TTF returns to pre-spike norms (****slide 9**), the North-West Europe LNG price collapsed even faster, widening the SparkNWE basis to almost $1/MMBtu, its lowest point since Oct’23 (****slide 39**). - This puts EU LNG imports firmly in the money, paving the way for an acceleration of European LNG imports to offset rapid storage withdrawals and meet residual winter demand. - However, collapsing freight rates (****slide 40**) are narrowing LNG netbacks from global FOB locations, raising the prospect of inter-basin arbitrage reopening (****slide 41**). - Low freight rates and a narrowing TTF premium over JKM (****slide 10**) are driving futures markets to price in a potential reopening in the US LNG arb to Asia (****slides 62-64**). - Considering the size of the refill task facing Europe (****slides 42-44**), the risk of cargo flow out of the Atlantic Basin will keep a floor under TTF and NWE LNG prices. - If Asian demand returns, this will translate directly into higher hub prices in Europe. But for now, supply growth continues to exceed demand recovery (****slide 71**). **đŸ’„DOWNLOAD: 70+ slides in .ppsx and .pdf format 👇** ****Volatility is loud. Signal is scarce.** Get instant access to this week’s 80-slide ****Chart Deck** and see what the positioning, flows and curves actually say — not what the market is shouting. [👉 Unlock the Chart Deck ](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Hormuz on the brink? URL: https://www.energyflux.news/strait-of-hormuz-on-the-brink-iran-us-tensions-standoff-lng-oil-gas-qatar/ Last updated: 2026-02-04T17:15:17.000Z Middle East tensions are on a yo-yo string, as the US once again dials up the pressure on Iran amid a brutal crackdown on protestors opposed to the Islamic regime in Tehran. Tensions appeared to ease last weekend when officials from both sides agreed to hold talks in Istanbul this Friday, 6 February. But yesterday, a US F-35 fighter jet [shot down an Iranian drone](https://apnews.com/article/us-iran-drone-shot-down-military-634f406a5bb416b7a1a8bec8cc72b4b8?ref=energyflux.news) that approached its aircraft carrier in the Arabian Sea. The stakes at Friday’s talks could not be higher. The build-up of US Navy warships in the region adds gravitas to President Donald Trump’s warning that “probably bad things would happen” if no deal is reached. Energy markets have grown numb to Middle East geopolitics in recent months, with natural gas traders focussing instead on weather runs, storage levels, and LNG flows as critical triggers of major price moves. But in today’s febrile markets, geopolitics is never far away. ## Qatar’s perennial headache As geostrategic signalling intensifies ahead of crunch talks, high-level LNG executives are currently gathered in Qatar for a major industry conference. The implications of a potential military flare-up in the Strait of Hormuz, the maritime bottleneck for Persian Gulf oil and gas exports, will be weighing on minds in Doha. Every week, Qatar exports more than 1.5 million tonnes of LNG, or 20% of worldwide supply, along this narrow sea passage to global markets, primarily in Asia. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/02/Strait-of-Hormuz-map-infographic.jpg) Infographic by [Anadolu Ajansı](https://www.aa.com.tr/en?ref=energyflux.news) Understanding the nuances of Hormuz gunboat diplomacy and the many unexpected ways this febrile situation could unfold is vital to evaluating geopolitical risk premia being priced into gas trading hubs in Europe and North America. Today’s **Deep Dive** explores spiralling US-Iran brinksmanship, the burgeoning risk of unintended escalation, and asks whether markets are today under-pricing risk even though a full-blown conflict remains improbable. The article is a guest post co-written by three esteemed authors with extensive knowledge and expertise in Gulf regional security, diplomacy, and energy issues: - **Naeem Yahya Mir** is a veteran oil and gas industry professional who served as Managing Director and CEO of Pakistan State Oil (PSO) from January 2012 to July 2013 - **Imran Nasir Sheikh** is a seasoned naval aviator with extensive operational experience in maritime surveillance and anti-submarine warfare - **Asim Riaz** holds an M.Phil in Strategic Studies from the National Defence University, Islamabad, with degrees in Energy Management and Mechanical Engineering #### IN THIS ISSUE: - Hormuz as a financial pressure valve: why ****fear reprices energy** faster than missiles ever could - How military “signalling” could accidentally morph from careful deterrence into an escalation machine ****with no one fully in control** - The structural reason chokepoints favour the weaker actor, and how ****weaponising congestion would unleash a loose cannon** - Why markets don’t need lost barrels to panic, only ****credible disruption probabilities** based on incomplete information - The under-discussed endgame risk that’s far more dangerous than conflict: ****fragmentation, and prolonged disorder** đŸ’„ ****Article stats:** 3,000 words, 12-min reading time The US-Iran standoff is often framed as whether war starts or is averted. This article looks beyond that black-and-white framing to face the substantive question for energy professionals: the many ways markets can misprice fast-moving events long before the first shot. The Middle East crisis is all about how risk quietly metastasises, through shipping rates, spot LNG, inflation, and global growth. The potential for an outsized correction in risk pricing is considerable, even if the worst-case scenario fails to materialise. Subscribe now to read the full analysis of the brinkmanship transforming this narrow waterway into a global energy market pressure cooker. Upgrade to ****Premium** unlock this article & the entire **Energy Flux* archive [👉 Upgrade to Premium 👈 ](#/portal/account/plans) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Revenge of the machines URL: https://www.energyflux.news/revenge-of-the-machines-ttf-henry-hub-price-implosion/ Last updated: 2026-02-03T09:47:55.000Z **Energy markets have seen plenty of crazy days in recent years, but few quite as unhinged as yesterday.** Dutch TTF, the European benchmark, crashed by a staggering 15% on Monday to remind everyone that vital commodities such as natural gas are now priced by hysterical algorithms making vast financial bets with precious little human oversight. The March 2026 contract, currently the front month, opened the session below €36 per MWh – down more than €3/MWh on Friday’s close – before selling off hard throughout the day to settle at €33/MWh. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/02/TTF-gap-down-chart.png) This marked the sharpest daily selloff since the post-invasion demand destruction and market recalibration of late 2023. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/02/TTF-Gas-Vegas-euro_001.png) Across the Atlantic, the price moves were even more dramatic. Henry Hub, the US benchmark, lost a quarter of its value in what Bloomberg described as “the largest daily loss for the front-month contract on a percentage basis since 1995, excluding contract rollover days.” ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/02/Henry-Hub-record-volatility_001-1.png) Analysts were quick to rationalise the histrionics as a function of milder weather forecasts, and a swift recovery in shale gas production after the recent [winter storm Fern freeze-off](https://www.energyflux.news/volatility-is-exploding-fundamentals-are-not/). But there’s a better explanation. Get timely, no-nonsense debriefs on major market moves. Differentiate your understanding with ****fiercely independent** analysis from **Energy Flux* [Unlock this article with a Premium subscription đŸ—ïž ](#/portal/signup) _This post is for subscribers on the Premium tier only._ ### After the squeeze URL: https://www.energyflux.news/after-the-big-ttf-squeeze-natural-gas-henry-hub/ Last updated: 2026-01-30T14:51:35.000Z **After a wild fortnight in global gas markets, the untethered escalation in American and European hub prices appears to be reaching its peak – for now.** The February-dated contract on Henry Hub, the US benchmark gas trading hub, expired on Wednesday at $7.46 per MMBtu – a rise of 140% over seven chaotic trading sessions – as Winter Storm Fern battered Gulf Coast states and rattled markets. Sub-zero temperatures triggered a surge in power and heating demand and throttled US shale production, as wells, pipelines, compressor stations and gas-fired generators froze up. Traders pounced on the rapid tightening in fundamentals to execute an intense squeeze on speculative short positions, driving the rally to highs not seen since 2022. The most alarming aspect of this episode was the rate of change. The front-month settled price rose by a record $1.53/MMBtu (+22%) on Monday 26 January, marking a new high for daily price swings on Henry Hub. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/01/Henry-Hub-record-volatility_001.png) Funds known as Commodity Trading Advisers (CTAs) that use algorithmically driven trading strategies to follow market momentum or price trends reportedly suffered heavy losses. Many CTAs were betting Henry Hub would fall when extreme winter weather forecasts surfaced. As prices rose and the market moved against them, CTAs were caught short; forcing them to exit out-of-the-money positions and buy length to limit losses. Citing data from Kpler, Bloomberg [reported](https://www.bloomberg.com/news/articles/2026-01-28/algo-traders-were-burned-by-historic-natural-gas-price-surge?ref=energyflux.news): > *“Although it’s too soon to assess the total dollar-value of CTA losses, it’s becoming clear the sudden rally wiped out all their gains for the year and that the scramble to close short positions as prices were skyrocketing actually accelerated the rally.”* ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. The parallels with the European gas market are striking. Dutch TTF, the European gas benchmark, shot up by \~40% over the previous two weeks when hedge funds executed a similar [squeeze on CTAs holding short TTF positions](https://www.energyflux.news/short-squeeze-ttf-eu-gas-market-price-spike-winter/). The depth of that TTF short squeeze became apparent in the days after, as Commitment of Trader data revealed an [historic repositioning](https://www.energyflux.news/volatility-is-exploding-fundamentals-are-not/) in hedge fund net length. Fundamentals were the spark, but the whipsawing in speculative bets was the rocket fuel that turned a correction into a parabolic drama. TTF prices have since calmed somewhat. The front month contract appears to have hit a ceiling just below €40/MWh ($13/MMBtu), although a fresh blast of cold weather in February could reignite speculative buying activity. The most revealing aspect of this episode is what happened in the days since the initial TTF rally. This week’s subscriber-only **Chart Deck** takes a scalpel to the latest CoT, exchange, gas storage and LNG flow data to perform a post-mortem on the algo-traders and CTAs who were crushed by the sudden winter bull run. The findings speak volumes about the immense structural risks now deeply embedded in gas markets in 2026. #### Highlights: - The ****biggest TTF short squeeze** in CoT history: winners, losers and what drove it **(slide 22)* - ****Funds flee TTF**: prices stabilise as investment funds exit the market to lick their wounds **(slides 23-24)* - ****TTF Sentiment Tracker** signals moderately bullish as funds sell shorts but keep a lid on length **(slide 20)* - Rapid storage depletion and fund aversion drags the ****TTF Risk Model** further into bullish-underpriced territory **(slides 33-36)* - ****Cargoes on the move**: Europe’s sudden scarcity price signal prompts curious LNG vessel movements **(slides 66-68)* - ****LNG is still glutting**: rampant supply growth outpaces resurgent 2026 global LNG demand **(slide 70, 83)* đŸ’„DOWNLOAD: 80+ slides in .ppsx and .pdf format ****Volatility is loud. Signal is scarce.** Get instant access to this week’s 80-slide ****Chart Deck** and see what the positioning, flows and curves actually say — not what the market is shouting. [👉 Unlock the Chart Deck ](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Volatility is exploding. Fundamentals are not URL: https://www.energyflux.news/volatility-is-exploding-fundamentals-are-not/ Last updated: 2026-01-22T08:00:51.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/01/Dashboard-1.png) > *“With a record number of investment funds bidding down the TTF price, it wouldn’t take much more than a cold weather snap to trigger a chaotic bout of short covering.” –* [*Energy Flux, 12 December 2025*](https://www.energyflux.news/us-lng-profits-go-negative/) **Global gas markets are in the grip of a sudden bout of renewed volatility.** What started with a [short squeeze in Europe](https://www.energyflux.news/short-squeeze-ttf-eu-gas-market-price-spike-winter/) has evolved into a weather-driven parabolic surge in the US, where an extreme winter storm threatens to plunge temperatures across the Lower 48 states and disrupt production during peak heating demand. The risk of ‘freeze-off’ curtailing shale gas production is being priced into Dutch TTF, Europe’s benchmark gas hub, as markets weigh a possible tightening in Atlantic LNG balances if feed gas flows to US Gulf Coast liquefaction plants are constrained. What we are witnessing is a self-reinforcing volatility loop with cascading second order effects: US weather risk drives scarcity fears in Europe, forcing more short covering on TTF which in turn exacerbates resurgent bullish momentum – allowing Henry Hub to rise further without compressing transatlantic LNG margins. All of this is driving a sharp upward correction in the Asian spot LNG market, where cargoes are trading at prices that bring oil-indexed contracts back into the money at practically any slope to Brent. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. The genesis of the global gas price outbreak was the ever-febrile European market, which last week witnessed a dramatic repositioning of investment funds in TTF futures. The latest ICE Endex Commitment of Traders data confirms that funds flipped from net short to net long by adding a near-record **113 TWh** of net length in one crazy week, fuelling the +20% TTF rally. The **TTF Sentiment Tracker** captured the spectacular pivot, with an off-the-chart lurch back into bullish territory. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/01/Energy-Flux-TTF-Sentiment-Tracker-2026-01-22_001.png) That was the third biggest repositioning event ever, and the largest since Russia’s full invasion of Ukraine. The extreme move turned a risk-strewn sideways winter market into a chaotic long-buying frenzy driven by hedge funds, CTAs, and algos – all of which was entirely [foreseeable](https://www.energyflux.news/ttf-curve-wrong-at-both-ends/). As advised [in Monday’s newsletter](https://www.energyflux.news/short-squeeze-ttf-eu-gas-market-price-spike-winter/), this shift “should be read as a lagged positioning response to price, not as evidence of a durable change in market regime”. I stand by those words: the noise of the market at times like this is almost deafening, but double-digit moves in prompt prices are exactly that: mostly noise. **If you’re looking for signal, you’re in the right place.** This week’s subscriber-only **Chart Deck** examines CoT, exchange, gas storage and LNG flow data in forensic detail to make sense of the volatility and unpack the competing forces that will determine price outturn on the major gas and LNG trading hubs. #### Highlights: - ****Henry Hub** surges above $5/MMBtu, as polar vortex weather warnings drive +60% price swing (****slide 51**). - This exacerbates renewed bullish momentum in Europe, where ****TTF** hits almost €40/MWh despite milder forecasts (****slide 10**). - Asian spot LNG finally reacts, as ****JKM** leaps >$11/MMBtu. This leaves TTF at a $2 premium to JKM (****slide 13**), with winter risk strongly concentrated in the front of the strip (****slide 12**). - The ****TTF Risk Model** foresaw the initial short squeeze and is now signalling moderately bullish on two competing factors (****slides 30-34**). - ****Investment funds** dashed to close out-of-the-money shorts and scramble for length in epic repositioning move (****slides 19-21**). - ****Commercial operators** pivot hard into sell mode to hedge future sales at profitable prices (****slide 25**). - EU gas storage operators accelerate gas destocking (****slides 39-41**), perhaps motivated by the same incentive: to cash in on the TTF spike. ****đŸ’„DOWNLOAD: 70+ slides in .ppsx and .pdf format** ****Volatility is loud. Signal is scarce.** Get instant access to this week’s 70-slide ****Chart Deck** and see what the positioning, flows and curves actually say — not what the market is shouting. [👉 Unlock the Chart Deck ](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Short squeeze! URL: https://www.energyflux.news/short-squeeze-ttf-eu-gas-market-price-spike-winter/ Last updated: 2026-01-19T18:27:09.000Z Flux Briefing: Free sign-up **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 ](https://exchange.energyflux.news/c/flux-briefing/20?ref=energyflux.news) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/01/Dashboard.png) **Breaking news: it gets cold in winter.** Last week, the European gas market whipped violently higher for a confluence of reasons that are greater than the sum of their parts. Temperatures dropped, heating demand picked up, and EU gas stocks fell a little faster than usual. Add on the usual helping of [geopolitical angst](https://www.energyflux.news/europes-grotesque-lng-dilemma/), and that was enough to lift prices by more than 20% in just five trading sessions. Front-month TTF, Europe’s gas benchmark, settled on Friday close to €37/MWh (around $13/MMBtu) – levels last seen in July 2025. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/01/image.png) TTF Feb'26 gas futures, last 12 months. Source: ICE Endex What began as a rational upward adjustment quickly morphed into forced short-covering, producing a sharp gap higher. The casualties were primarily algo-driven traders that had carried structural short exposure into the heart of winter. The sudden jolt of life in what had become an eerily moribund winter market provoked the usual binary reactions: either *“panic, the European energy crisis is back”* or *“relax, this is a meaningless weather blip.”* Neither interpretation is particularly helpful. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Yes, the move felt abrupt after weeks of sideways trading. But it was not entirely unforeseeable either. A small number of reputable outlets ([ahem](https://www.energyflux.news/beware-complacency/)) had been flagging precisely this vulnerability: a crowded short, and a complacent market leaning a bit too hard on a bearish narrative. And no, a rally back to €37/MWh is not a statistical outlier. Several commentators were quick to share long-run charts showing that, in historical terms, this barely registers. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/01/TTF-daily-change_001.png) But if your yardstick is the stratospheric absurdity of 2022, then almost nothing will ever look interesting again. If you lived through the energy crisis and your only conclusion from a +20% move is “wake me when it hits €300,” you might as well stop watching gas markets altogether. So how *should* we think about it? Last week’s price shock was not an anomaly. It was a sign of the times. Outlier price risk is quietly expanding as structurally permabullish investment funds attempt to extract value from a market whose fundamentals are increasingly bearish. The big picture has not changed (abundant LNG, plenty of spare European import capacity); but neither have the latent risks created by positioning, leverage, and narrative inertia. This is a short analytical note for **Premium** and **Chart Deck** subscribers. It contains five charts that explain why the recent price action largely confirms what we already knew about the EU gas market, and why that critical nuance still matters more than histrionics or dismissive counter-reactions. 👑 Elevate your market insight with **Energy Flux*. Upgrade for instant access to this and hundreds other unique articles like it **—* timely, unflinching analysis that stays ahead of the curve. [Subscribe ](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Venezuela’s Gas: The World’s Most Expensive Bonfire URL: https://www.energyflux.news/venezuela-natural-gas-the-worlds-most-expensive-bonfire-caracas-flaring-methane-empire/ Last updated: 2026-03-20T04:00:36.000Z **Since the United States** [**captured**](https://www.energyflux.news/venezuela-caracas-trump-maduro-oil-gas-chaos-what-happens-next/) **Venezuela’s sitting president Nicolas Maduro and vowed to “run” the country at gunpoint, the energy world has been captivated by the Venezuelan oil patch: where will the barrels go, will Western oil companies reinvest, how does this dramatic intervention redraw global energy geopolitics?** As tanker-loads of ink are spilled pondering these questions, the equally urgent issue of Venezuela’s natural gas has (perhaps understandably) flown largely under the radar. But consider this: Venezuela is sitting on more natural gas than Saudi Arabia, and routinely flares off enough of the stuff to meet the entire annual demand of neighbouring Colombia — itself a rising importer of liquefied natural gas (LNG). Venezuela has an estimated **6.3 trillion cubic metres (Tcm)** of proved reserves, putting it in the world’s top ten gas countries with 3.3% of the global total. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/01/Global-gas-reserves_001.png) Gas production significantly lags reserves. Venezuela produced just 3 billion cubic feet of gas per day (Bcf/d) in 2024, or 0.8% global share, according to EI Statistical Review data. That’s less than regional neighbours Argentina and Mexico (4.3 and 3.5 Bcf/d, respectively), and far below the likes of Canada, Australia, Azerbaijan and Algeria, all of which are sitting on far fewer molecules. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/01/Venezuela-gas-reserves-production-flaring_001.png) Capturing and monetising all of the gas wasted by Venezuela’s decrepit oil industry would boost nationwide gas production by as much as 50%. But the country’s oil patch, once a global paragon of technological advancement and Western collaboration, is in an appalling state of disrepair. ## The environmental legacy of *Chavismo* Aside from spawning a humanitarian crisis unlike anything seen outside of a warzone, decades of neglect and deliberate sabotage of oil infrastructure during the disastrous kleptocracies of Hugo Chavez and Nicolas Maduro have bequeathed an abysmal track record on gas flaring. Abandoned wells leak millions of cubic feet of gas into the air every day, and operational reservoirs from Maracaibo in the west to the heavy oil fields of the Orinoco Belt in the east routinely vent and flare hundreds of millions more. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2026/01/Venezuela-gas-flaring-visible-from-space-credit-geology.com.jpg) **The flares in Monagas are so large they can be seen from space. Source:* [**Geology.com*](https://geology.com/articles/oil-fields-from-space/?ref=energyflux.news#orinoco-oil-field) The scale of infrastructure dilapidation and environmental damage in some places has been compared to a post-apocalyptic scene from a Hollywood blockbuster. Gas transmission and distribution pipes are so leaky, “you can literally see gas bubbles surfacing on Lake Maracaibo,” one industry veteran told *Energy Flux*. Oil from successive spills accumulates into rainwater drainage systems around Maracaibo, flooding the streets during storms. This has exacerbated collapse of water infrastructure, leading to frequent rationing. The situation is so bad that parched residents of Venezuela’s once-thriving oil capital are literally [drilling wildcat wells to hunt for water](https://saudipress.com/venezuela-s-crumbling-economy-reflects-in-water-scarcity-of-oil-capital-maracaibo?ref=energyflux.news). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Take Venezuela’s oil, own the gas flares But this is not just another environmental catastrophe to be shrugged off while great powers squabble over the larger prize of oil.Gas flaring is a direct impediment to Washington’s imperial ambitions to control Venezuela’s world-beating heavy crude reserves. The Trump administration is coercing Big Oil executives to invest $100 billion into the Venezuelan quagmire. ExxonMobil CEO Darren Woods was chastised for stating the obvious: Venezuela is currently “[uninvestable](https://www.msn.com/en-us/money/news/exxon-shares-drop-after-trump-says-he-may-keep-them-out-of-venezuela-after-ceo-s-uninvestable-remarks/ar-AA1U2MVi?ref=energyflux.news)”. Even if conditions change and investor dollars pour in, Western oil firms would need to fix the flares or put their share of this gargantuan environmental and reputational liability on their own books. Shareholders might have something to say about that. The better option is to turn this daily disaster into the nation-building wealth creation opportunity that it clearly represents. To do that, they will need to navigate a labyrinth of sabotaged compressors, paralysing sanctions, and a state oil company seemingly hell-bent on burning its own future to prop up a dying oil empire. For international investors and energy strategists, the critical question is no longer if Venezuela’s gas can be saved, but who will grasp the flaring nettle when the rebuild finally starts — and what they will confront along the way. The answers uncovered in this **Deep Dive** are not found in press releases, newsfeeds or policy papers. They are drawn from exclusive interviews and background briefings with a dozen engineers, executives, and technical analysts on the front lines, all conducted in the hectic days since the [decapitation of the Maduro regime](https://www.energyflux.news/venezuela-caracas-trump-maduro-oil-gas-chaos-what-happens-next/). Their expert testimonies reveal: - **The 25 Tcf gas cap:** How a single, deliberate geological manoeuvre could unlock a hidden resource as big as the *combined* reserves of Argentina and Brazil, and why state oil company PDVSA refuses to flip the switch. - **The sanctions half-truth:** Why the US embargo glosses over a decade of failure to build domestic and export markets to monetise Venezuela’s flaring crisis. - **The Caribbean chessboard:** How Trinidad’s desperate gas shortage could force Washington’s hand, turning environmental catastrophe into a geopolitical weapon via a European ‘green fuel’ lifeline. - **The crude truth:** Why Washington’s ideologues and technocrats will keep gas in the political shadows, even if it means setting fire to $1.4 billion a year — and how that myopia could backfire. **đŸ’„ *Article stats:* *4,200 words, 17-min reading time, 10 charts, maps and graphs*** [Read online](https://www.energyflux.news/venezuela-natural-gas-the-worlds-most-expensive-bonfire-caracas-flaring-methane-empire) The following investigation offers the most comprehensive and accessible assessment of the post-Maduro Venezuelan gas sector available today. This consultancy-grade research exposes the ruthless and short-sighted calculus that treats a world-class resource as a disposable by-product, and the reasons why the status quo is no longer sustainable. For energy professionals navigating the volatile intersection of global markets, Western hemisphere geopolitics, and Europe’s energy transition, understanding the likely fate of Venezuela’s gas is essential to deciphering the factors that will shape markets for decades to come. ****This is the story behind the flares.** To continue reading, and to unlock full access to exclusive reporting, data visuals, and expert analysis, subscribe to **Energy Flux* — the home of fiercely independent energy journalism. [👉 Upgrade to Premium 👈 ](#/portal/signup) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Europe’s grotesque LNG dilemma URL: https://www.energyflux.news/europes-grotesque-lng-dilemma/ Last updated: 2026-01-09T08:00:16.000Z **Flows of liquefied natural gas (LNG) from the United States into Europe surged to roughly 72 million tonnes in 2025, up by a staggering 60% year-on-year. Imports into the EU-27 rose in parallel, to about 58 million tonnes, per Kpler data. Those are not marginal shifts. They are system-defining numbers, and they speak volumes about European exposure to ongoing geopolitical events.** The US military capture of [Venezuelan President NicolĂĄs Maduro](https://www.energyflux.news/venezuela-caracas-trump-maduro-oil-gas-chaos-what-happens-next/) and White House threats to acquire Greenland by force have, in the span of a week, upended the concept of energy security for Europe. The Old Continent’s record dependence on US LNG is no longer just an energy wonk talking-point; it is a glaring geopolitical vulnerability. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. US LNG flows into Europe are unlikely to rise by the same magnitude again in 2026\. But nor should anyone expect a meaningful retreat. Absent a sharp and sudden reordering of global LNG economics, Europe will likely sit at or near these record levels throughout this year. The near-term market logic is straightforward. Asian spot demand remains subdued, price signals are flat, and LNG freight charter rates, having retreated from recent highs, remain volatile. The result is a deepening ‘basinisation’ of LNG trade, where molecules increasingly stay close to home because inter-basin arbitrage windows are closed. For Atlantic supply, Europe is the natural sink. Add to that a gas storage situation that looks less comfortable than recent years. North-West Europe is likely to emerge from winter with materially lower inventories than in the past two years. Refill demand will matter again. Dutch TTF — the European gas price benchmark — will need to clear at levels that keep flexible LNG in the Atlantic through summer, not because Europe is competing aggressively, but because it cannot afford to arrive at next winter without a buffer. This is defensive buying, and the price pain will be more tolerable than in recent years thanks to record global LNG supply. So far, so dull. Markets can live with all that. The real problem starts where geopolitics intrudes. And in 2026, geopolitics is not a tail risk. It is the main variable, and it is about to severely constrain Europe’s geostrategic and political options for the foreseeable future. Europe’s [$1 trillion LNG pivot](https://www.energyflux.news/europes-pyrrhic-gas-victory/) was a necessary, rational and painful emergency measure after Russia’s 2022 Ukraine invasion. The danger is that it is becoming entrenched as a long-term strategy without the tools to manage its geopolitical consequences. The urgency stems from the fact that the current US administration is eager to exploit this weakness to further its expansionist ideology. What’s at stake is sovereignty itself, with LNG dependency poised to play the role of prime actor and determinant of geopolitical outcomes — the mechanism through which Europe’s strategic autonomy is tested, eroded, and ultimately priced. **The market story stops here.* ***The strategic one doesn’t.** **What follows is not about price spreads or cargo counts. It’s about leverage — who has it, who’s losing it, and why Europe’s LNG dependence is becoming a material factor in historic unfolding events at the start of 2026.* **As the second half of the decade gets off to a chilling and violent start, this is the* ***2026 LNG Outlook** *you won’t read anywhere else — written for readers who care less about industry consensus and more about real-world consequences.* **Subscribers get a brutal assessment of Europe’s existential predicament, and frank discussion of radical energy policy solutions proportionate to the risk it faces — as well as the deeply unpalatable trade-offs they entail.* đŸ’„**Article stats: 2,300 words, \~10-min reading time* **Continue reading with a Premium subscription to Energy Flux: the home of* ***fiercely independent market analysis** *.* [Upgrade to Premium ](#/portal/signup) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Venezuela: what happens next? URL: https://www.energyflux.news/venezuela-caracas-trump-maduro-oil-gas-chaos-what-happens-next/ Last updated: 2026-01-06T12:47:59.000Z Aside from upending my publishing schedule and bringing a premature end to the holiday period, the dramatic events in Caracas over the weekend had a deeply personal impact upon me and my family. My Venezuelan wife has struggled to contact her family due to the blackout since US military forces struck the nation’s capital, and our half-Venezuelan children — eight and nine years old — are receiving an impromptu crash course in global geopolitics in response to their myriad questions about what exactly is going on, and why. I studied and worked in Caracas between 2005 and 2008, at the height of power of revolutionary president Hugo Chavez whose *Chavista* socialist movement swept the country and propagated across South America as the first ‘pink tide’ of the millennium. Frequently paralysed by opposition uprisings and standoffs with government loyalists, Caracas was a febrile hotbed of discontent at that time. On more than one occasion, I was caught in the midst of violent street protests while commuting to The Daily Journal, the (now defunct) English language newspaper where I landed my first job in journalism. The acid burn of tear gas is seared into my memory as a distinctly *Caraqueño* experience. ## Hydra-headed tyranny Chavez died in 2013 and was replaced by Nicolas Maduro, a clumsy and brutal kleptocrat who served as the continuity figurehead for the autocratic ‘Bolivarian’ government until his dramatic capture by US forces in a dawn raid on Saturday. The audacious capture of Maduro has decapitated the regime. But the Chavista elites who rose to power over the last three decades are still in place, and the structures that kept them there are deeply embedded in the social fabric of the country. Chief among these is the Chavista government’s reliance on armed militias to assert state power, harass political opponents and repress uprisings across the capital and beyond. These *colectivos* (collectives) are populated by ruthless armed motorcycle gangs from Caracas’ sprawling poverty-stricken shanty towns who periodically emerge to patrol and intimidate the rest of the city whenever the government needs to call in the heavies. I will never forget the stomach-churning image of shotgun-wielding motorcycle gangs weaving menacingly between burning tyre roadblocks. Wearing balaclavas to hide their identity, the shadowy and unpredictable *colectivos* inject extra fear and chaos into any street clash or volatile protest. The Trump administration’s astonishing assertion that it will temporarily ‘run’ Venezuela raises stark questions about how exactly it will deal with the *colectivos*. Unless these gangs are recruited into whatever transitional governance arrangement emerges, they could spawn a ragtag armed resistance to protect their sources of weapons, funding and political patronage. A Washington-based administration of Caracas must also contend with corrupt military officials and other heavily armed mafia-style groups that preside over lucrative narco-trafficking, illegal mining operations and other black-market enterprises that blossomed across Venezuela during Maduro’s ruinous and illegitimate presidency. Again, these figures will not simply walk away quietly if they are not ‘kept whole’ by whoever becomes the new boss. All of this is a long way of saying that the Trump administration has probably bitten off more than it can chew, and will almost certainly look for an easy way out — if indeed there is one. Let’s explore the options. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for free to continue reading đŸ’„ Energy Flux đŸ’„ **—* **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._ ### Scarcity, abundance and urgency URL: https://www.energyflux.news/scarcity-abundance-and-urgency-how-natural-gas-lng-prices-dictate-pace-of-transition/ Last updated: 2025-12-23T08:00:32.000Z **For much of the past four years, it has felt natural to explain the energy transition through the language of crisis. Gas was scarce. Power was expensive. As security assumptions collapsed, they were replaced by a sense of urgency.** In Europe especially, the shock was profound enough to cut through political inertia that had resisted change for decades. Decisions that once seemed controversial or unrealistic were suddenly unavoidable. Renewables, grids, and storage stopped being luxury climate projects and started being treated as core infrastructure. That period mattered. It genuinely changed the trajectory of policy. It also shaped how many of us came to think about the transition itself: as something that advances when systems are stressed, when prices hurt, and when there is no comfortable alternative. This brings good news and bad news. The good news is that we are no longer living in that moment. The bad news is the same: *we are no longer living in that moment.* Scarcity, abundance and urgency: video monologue ([YouTube](https://www.youtube.com/watch?v=FIxtbnz9WuQ&ref=energyflux.news)) Today, Europe has [abundant LNG](https://www.energyflux.news/bears-tighten-grip-on-ttf/), adequate gas in underground storage, and wholesale prices that are a long way from their wartime peaks. Asia, too, has found some relief. The emergency has passed, even if the structural vulnerabilities and geopolitical risks have not. And with that shift comes a subtle but important change. The transition is still moving forward, but it is moving under very different conditions. This is where the scarcity-versus-abundance tension becomes useful, not as a slogan, but as a way of understanding why the transition now feels both real and incomplete at the same time. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for free to continue reading đŸ’„ Energy Flux đŸ’„ **—* **fiercely independent energy market analysis* Subscribe Email sent! Check your inbox to complete your signup. Free newsletter. No spam. Unsubscribe anytime. Scarcity forces direction. It narrows choices until action becomes unavoidable. That is what happened between 2021 and 2023. Abundance, by contrast, slows execution. It prolongs decision-making, curbs the ambition of reforms, and lowers the threshold on how much political and economic pain can be tolerated along the way. The commitments made during the crisis have not been reversed. But they are now being carried out in an environment where the pressure has eased. That matters more than is often acknowledged. When energy is scarce and expensive, reforms that would normally be politically toxic suddenly become possible, inevitable even. Volatility is managed. Policymakers take risks because the alternative is even worse. When energy becomes cheaper and more available, even temporarily, that tolerance fades. The same reforms still make sense on paper, but they no longer feel urgent. Timelines stretch. Compromises multiply. Gas quietly regains its role as a reassuring backstop. This does not mean the transition will stall. It means it is about to shift gears. ## Bridge fuel to infinity Think about how gas sits within the system. Even as renewables expand rapidly, gas continues to define reliability standards, market design, price formation, and political comfort levels. New renewable projects are increasingly designed to smooth volatility, firm output, and behave in ways that resemble conventional generation. Storage and hybridisation grow, but largely to stabilise gas-heavy systems rather than to make gas unnecessary. In that sense, abundance stabilises incumbency. It allows the system to change without digging up its own foundations. The result is progress that is both visible and palpable, but simultaneously unresolved: more capacity, more complexity, and yet persistent stress around grids, pricing, and investment returns. The [LNG glut](https://www.energyflux.news/tracking-lng-glut-chart-deck/) sharpens this dynamic. For importing regions, abundant LNG reduces the sense of emergency and restores a degree of political calm. That calm is widely interpreted as success. In reality, it is closer to deferral. The underlying exposure to global gas markets remains; it is simply being masked by favourable conditions. At the same time, the globalisation of gas markets pushes pressure elsewhere. In the United States, LNG exports [tighten domestic balances](https://www.energyflux.news/the-great-transatlantic-gas-crunch/) and lift prices, creating a [different set of tensions](https://www.energyflux.news/us-lng-eats-itself/). Ironically, this strengthens the economic case for renewables and electrification, even as political momentum moves against decarbonisation. The transition no longer moves in step across regions. As gas markets converge, they fragment the pace and character of energy system change. ## 2026 and beyond Looking ahead to 2026, this matters because the next constraints on the transition are unlikely to look like the last ones. Fuel scarcity is no longer the most obvious fault line. Grid congestion, delayed connections, curtailment, suppressed price signals and perverse incentives are emerging as more immediate perils. Storage will prove essential, but not all early investments will work as advertised, especially at sites that were actively designed to smooth away the volatility that storage depends on. Markets will suppress volatility just when storage needs it. Gas demand is likely to decline more slowly than many scenarios assume, even as renewable capacity continues to grow, because gas is becoming more affordable and systems have not yet been forced to operate without gas as an implicit safety net. Gas power plants will [run fewer hours](https://www.energyflux.news/value-over-volume/) but retain strategic value. Policymakers will quietly accept this mismatch rather than confront the system redesign required to eliminate it. Perhaps most importantly, the next acceleration in the transition is unlikely to come from another round of strategy documents or targets. It will come, as before, from stress. Another [shock](https://www.energyflux.news/beware-complacency/), whether geopolitical, climatic, or infrastructural, will do more to unlock difficult reforms than years of consensus-building in benign conditions. ## Time, the most precious gift of all None of this means abundance is undesirable. The relief from high energy prices is real and necessary. But it brings its own trade-offs, and changes incentives. It prioritises optimisation over genuine structural transformation. It encourages systems to adapt around existing structures rather than replace them. Scarcity gave the energy transition its direction, purpose, and renewed vigour. Abundance now threatens how fully that direction is followed, and how quickly the momentum fades. The risk is not that progress stops, but that it becomes comfortable enough to lose its edge. The uncomfortable truth is that the decisive next phase of the transition will likely begin only when systems are once more forced to function without assuming that cheap gas will be there in the background, ready to make the hard problems go away. For now, abundance is buying time. Whether that time is used wisely remains an open question. **Seb Kennedy | Energy Flux | 23 December 2025** ### LNG glut claims first US scalp URL: https://www.energyflux.news/lng-glut-claims-first-us-scalp/ Last updated: 2025-12-19T17:03:19.000Z First off, welcome to the many new readers who signed up after [last week’s edition](https://www.energyflux.news/us-lng-profits-go-negative/) that broke the news of **US LNG profits turning negative** on an all-in cost basis. The story seemed to strike a nerve, but as expected the entire episode lasted barely a few days. Warmer weather forecasts and an outage at Freeport LNG prompted a spectacular 25% sell-off on Henry Hub over the following week, as traders priced in a looser domestic gas balance in the Lower 48 states. At the same time, Dutch TTF, the Title Transfer Facility – Europe’s benchmark gas trading hub – rebounded above €27/MWh (\~$9.30/MMBtu) on the brief Freeport outage and forecasts of colder temperatures in parts of Europe. Henry Hub’s drop below $4/MMBtu combined with firmer TTF widened the transatlantic spread between the two, dragging the all-in cost of US LNG in North-West Europe just below the TTF hub price. Further declines in Atlantic LNG freight charter rates helped edge delivered costs lower (Spark30 spot is again trading below $100k/day). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. But as this week’s [**Chart Deck**](https://www.energyflux.news/tracking-lng-glut-chart-deck/) illustrates, the forces that conspired to crush transatlantic margins are still very much in play. Futures markets are pricing in more negative long-run US LNG profits from October 2026\. By summer 2027 this could be a regular occurrence, although much deeper spread compression must occur before LNG netbacks are loss-making on a short-run marginal cost (SRMC) basis. Why? Because the \~$3/MMBtu liquefaction fee is deemed a sunk cost. When accounted for this way, loss-making LNG is still worth lifting at these prices. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/Sunk-cost_001.png) --- ## LNG glut claims first US scalp **As the global LNG glut bites, weak hands will fold first.** Energy Transfer yesterday suspended development of its Lake Charles LNG project in Louisiana, after deciding that the project offered an inferior risk-return profile compared to other capital investments. The US developer [said](https://finance.yahoo.com/news/energy-transfer-announces-suspension-development-211500327.html?ref=energyflux.news) building the liquefaction project is “not warranted”. It will instead “focus on allocating capital to its significant backlog of natural gas pipeline infrastructure projects that Energy Transfer believes provides superior risk/return profiles.” This last line is telling. Since when was a simple pipeline, with boring utility-style returns and point-to-point delivery, a more attractive investment than an LNG export megaproject that exploits double-digit ROI global arbitrage opportunities? Materials and labour inflation is a real pain-point for construction projects in all segments, and liquefaction megaprojects are particularly exposed. Rising build costs combined with a rapidly softening market make big-ticket capital investments a hard sell at board level. Energy Transfer evidently sees the writing on the wall. Either the company baulked at the likelihood of materially diminished returns, or it knew it couldn’t pre-sell enough of the project’s nameplate 16 mtpa capacity to leverage debt finance. In a buyer’s market, locking down \~80% under binding sales and purchase agreements is extremely challenging. Either way, Lake Charles was effectively sunk by the LNG glut – before the supply wave even breaks. This is one way for the market to self-correct: through US LNG construction delays and project cancellations. While it won’t avoid a glut happening, capacity attrition could trim the length and depth of oversupply. Keep an eye out for more headlines like this in 2026. 📹 Were you forwarded this email? Or just reading online? Don’t miss out, [sign up here](https://www.energyflux.news/subscribe) to get the **Energy Flux* newsletter in your inbox. --- ## Tracking the LNG glut **How can we tell if the global LNG market is actually in a glut?** The spread compression observed last week offers some clues, as does the Lake Charles cancellation. But neither speak directly to physical balances today, on the water. To fix this, I developed a new indicator to track how efficiently the global LNG market is absorbing supply. This indicator quantifies whether LNG is flowing smoothly through the system, or encountering friction. 📈 When LNG is taking longer than normal to clear despite falling prices, the indicator moves positive, signalling latent oversupply that could lead to glut-like conditions if sustained. 📉 When cargoes clear quicker than usual even though rising prices might warrant holding them in floating storage, the indicator moves negative, consistent with tighter conditions and stronger pull from buyers. **Why does this matter?** Market stress often builds before it becomes obvious in prices or headlines. Changes in clearing efficiency can signal shifting leverage between buyers and sellers, emerging pressure on infrastructure, or the early stages of oversupply or tightening. By tracking how LNG moves through the system week by week, this indicator provides a complementary lens on market conditions — one that might help explain why prices are behaving as they are. The **LNG Flow Index** is available to subscribers while in beta testing, before being incorporated into the *Energy Flux* **TTF Risk Model.** Both are published in the [Chart Deck](https://www.energyflux.news/tracking-lng-glut-chart-deck/). The risk model is a composite risk score, comprised of Z-scores of EU gas storage tightness, TTF curve slope, investment fund positioning, and commercial operator hedging. The latest run of the TTF Risk Model is again pointing to moderate underpricing of bullish risk, indicating persistent complacency in the way that market participants are pricing winter risk. But with winter nearing the halfway mark, that risk should gradually diminish in Q1 absent a weather or supply shock. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/Risk_model_v2.1_001.png) Check out this week’s downloadable [**Chart Deck**](https://www.energyflux.news/tracking-lng-glut-chart-deck/) to see the results in full, alongside the physical balances metric and 70+ slides covering a slew of other vital metrics that take the pulse of global LNG market 👇 [Tracking the LNG glutNew LNG physical balance index monitors glut conditions in real-time | Chart Deck — 19 Dec 2025![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/EF_square_tight-19.jpg)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/Chart-Deck-cover-image.png)](https://www.energyflux.news/tracking-lng-glut-chart-deck/) --- ## Cheap gas and the energy transition I was invited to speak at the Global Renewables Alliance (GRA) Energy Dialogue 2025 in central London this week. The private event was an interactive workshop and debate among thought leaders designed to deepen shared understanding of where the opportunities and pinch-points lie in the ever-changing energy transition. I offered a leftfield perspective for the renewables crowd, focussing on the role of natural gas prices in shaping energy transition pace and trajectory. I shared some thoughts in a [LinkedIn video reel](https://www.linkedin.com/posts/sebkennedy%5Fnaturalgas-energytransition-activity-7406260785439715328-cykH?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop&rcm=ACoAAAJvzgwBvCHdWBI1dN%5F0QsOZ96ew1O9XDKQ) beforehand, and have been mulling the discussion in the days since. [#naturalgas #energytransition | Seb Kennedy | 31 commentsMorning thoughts: how cheap #naturalgas will impact the #energytransition CC Laurent Segalen Global Renewables Alliance (GRA) Kingsmill Bond | 31 comments on LinkedIn![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/al2o9zrvru7aqj8e1x2rzsrca-3)LinkedInClaudio Steuer![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/1765790132496-1)](https://www.linkedin.com/posts/sebkennedy%5Fnaturalgas-energytransition-activity-7406260785439715328-cykH?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop&rcm=ACoAAAJvzgwBvCHdWBI1dN%5F0QsOZ96ew1O9XDKQ) In essence, one way of looking at the energy transition is as one enormous exercise in managing gas price risks. Gas is so fundamental to power, heat and industrial competitiveness that gas market prices are the economic benchmarks against which transition tech investments are measured. There are major implications for the energy transition as gas markets pivot away from the 2022 energy crisis into an era of unprecedented LNG oversupply. The energy security and affordability arguments that drove three years of rapid electrification will start to fall away. Mindsets will shift from scarcity to abundance, and with that the sense of urgency will start to ebb. The challenge for renewables and storage is to remain relevant in an era of energy abundance, and find a fresh argument that cuts through. Decision-makers will be less absorbed by energy cost inflation and afforded precious time to spend on other pressing issues – not least Ukraine, Russia, trade, and tortuous transatlantic relations. The GRA session was conducted behind closed doors under the Chatham House rule, so I can’t report exactly what was said. But the experience got me thinking about just how important – and overlooked – gas prices are in the way people think about the economics of decarbonisation and cleantech. I launched *Energy Flux* in part to shed light on this exact topic, so it was gratifying to be able to share knowledge in person with some highly esteemed leaders and friends in this space. If I have time over Christmas, I’ll write up a longer piece that distils my thinking on this topic, and share some thoughts about the market outlook for 2026. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/GRA-event-speakers-1.jpg) ***In good company** *(from left): Seb Kennedy (Energy Flux), Ana Rovzar (GRA), Kingsmill Bond (Ember), Laurent Segalen (Redefining Energy), Lisa Fischer (E3G), Bruce Douglas (GRA), Erin Gill (Arup), Ben Backwell (GWEC), Joao Galamba (ex-infrastructure minister, Portugal), Jan Rosenow (University of Oxford)* 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 ](https://exchange.energyflux.news/c/flux-briefing/20?ref=energyflux.news) --- ## 2025 in Energy Flux If I had to summarise 2025 for *Energy Flux* in a single word, it would be infrastructure. Or more specifically, a year of building the digital foundations to turn a newsletter into a multimedia platform. This time last year, *Energy Flux* was little more than a simple blog hosted on Substack. Since then, the platform has grown in myriad ways: - Switched hosting providers, [migrating seamlessly to Ghost](https://www.energyflux.news/important-update-energy-flux-has-moved/) to expand feature offering. - Relaunched the *Energy Flux* [podcast and Youtube channel](https://www.energyflux.news/tag/podcast/) with listener Q&A (got a question? Hit reply!) - Launched [tiered subscriptions](https://www.energyflux.news/new-tiered-subscriptions-7-day-free-trial-for-all-plans/), giving readers greater flexibility and choice. - Launched [Flux Exchange](https://www.energyflux.news/introducing-flux-exchange/), the community forum for *Energy Flux* readers. - Launched [Flux Briefing](https://www.energyflux.news/start-your-mornings-with-flux-briefing-ai-energy-analysis-discourse/), the daily AI-powered news summary that’s now read by thousands of people. - Relaunched the [Chart Deck](https://www.energyflux.news/chart-deck-21-nov-2025/) as a downloadable 70-slide deck in .pdf format, for easy offline viewing. I’ll admit, rolling out that many product/feature launches in such a short period was extremely time-consuming. For every article or podcast episode I published, there were many more I wanted to produce but simply didn’t have time to tackle. My mission for 2026 is to refocus on creating the high-quality, original content readers want, now that the various channels are established through which to deliver it all. Apart from keeping me busy, all of this expansion work costs money. The various hosting fees, tech stack subscriptions, bridging solutions and technical support don’t come cheap. As a fiercely independent publisher, these costs are 100% covered by subscription revenue. Without paying readers, none of this would be possible. So, two things: 1ïžâƒŁ First, an enormous heart-felt **thank you** to the hundreds of readers who pay for a monthly or yearly subscription. You really are keeping this project alive. 2ïžâƒŁ Second, **please consider upgrading your** [**subscription**](https://www.energyflux.news/subscribe) if you enjoy reading *Energy Flux*. The subscription business is tough, especially for independent publishers. There are numerous subscription tiers and payment plans (browse them all [here](https://www.energyflux.news/subscribe)). I also offer corporate billing via invoice and personal account management for group subscriptions. [Get in touch](mailto:seb@energyflux.news) to find out more. Level up your market insight. Subscribe to **Energy Flux* and support fiercely independent market analysis [Subscribe ](https://www.energyflux.news/#/portal/subscribe) Above all, many thanks for reading *Energy Flux* in 2025\. I haven’t quite finished for the year, so keep an eye out for one or two final pieces before we enter the second half of the decade. —Seb ### Tracking the LNG glut URL: https://www.energyflux.news/tracking-lng-glut-chart-deck/ Last updated: 2025-12-19T04:17:27.000Z New LNG physical balance index monitors glut conditions in real-time | Chart Deck — 19 Dec 2025 _This post is for subscribers on the Chart Deck and Premium tiers only._ ### US LNG profits go negative URL: https://www.energyflux.news/us-lng-profits-go-negative/ Last updated: 2025-12-12T01:55:45.000Z **The world is waking up to the realities of margin compression. US LNG profits went sub-zero in Europe this week, as transatlantic margins come under sustained pressure.** As ever, the *Energy Flux* Chart Deck has you well covered: our proprietary analysis of US LNG economics starts on **slide 48**. Negative profits won’t lead to shut-ins because US LNG offtakers consider the liquefaction fee a sunk cost, which means cargoes remain profitable on a short-run marginal cost basis (**slide 54**). This anomalous situation is unlikely to last long. A large chunk of the margin squeeze arose from the collapse in TTF futures, which are failing to price in above-average storage depletion (**slides 39-41**). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/11/1500x500-5-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. With a record number of investment funds bidding down the TTF price, it wouldn’t take much more than a cold weather snap to trigger a chaotic bout of short covering (**slides 19-21**). Commercial operators are making the most of the price dip, buying up cheap TTF futures at a record rate. Commercial Undertakings extended their net long position to an all-time high of +237 TWh (**slide 25**). The TTF Risk Model was upgraded with the addition of a storage tightness Z-score. Since EU gas storage levels are currently below seasonal averages, this is adding to the ‘bullish underpriced’ risk score (**slides 30-34**). (To compensate, the weighting on the Curve Slope Z-score was dialled down.) 💡 If you want the full picture of how sentiment, economics and cargo flows are lining up as winter begins, it’s all in this jam-packed datavis-heavy Chart Deck: #### Highlights (click to expand): - ****US LNG profits vanish** on long-run cost basis, giving a taste of things to come (slides 48-58) - US LNG delivered cost in Asia now priced on ****\~14% Brent parity** for Winter 2026 (slides 46-47) - ****Commercials go on buying spree**, stocking up on cheap TTF futures as hedge funds go all-in short (slides 17-29) - The ****TTF Risk Model** was upgraded with storage Z-score, exacerbating bullish underpriced risk signal (slides 30-34) - New seasonal deviation metric for EU gas storage shows stock levels are depleting ****too fast, too soon** (slides 39-41) ****đŸ’„DOWNLOAD: 70+ slides in .ppsx and .pdf format** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The great Transatlantic gas crunch URL: https://www.energyflux.news/the-great-transatlantic-gas-crunch/ Last updated: 2025-12-12T00:04:04.000Z **Global gas pricing is supposedly becoming more integrated as LNG trade accelerates, yet the two benchmarks at the heart of the Atlantic Basin — Henry Hub in Louisiana, and the Dutch Title Transfer Facility (TTF) — remain fundamentally regional creatures.** Henry Hub expresses a fast-moving North American supply-demand system, now complicated by LNG exports that graft an international outlet onto a mature domestic hub. TTF performs the same function for import-dependent Northwest Europe, where storage swings, weather patterns, pipeline flows and policy signals all leave deep marks on price formation. Each hub responds acutely to its own regional pressures. Sometimes those pressures align; often they don’t. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-2-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. LNG is the connective tissue between the two hubs, but it’s still only a partial link. Growth in US export capacity has widened the channel through which shocks can travel, yet infrastructure limits and regional fundamentals keep Henry Hub and TTF only semi-interconnected. The result is a spread that swings between opportunity and warning. When the spread widens, it signals room for arbitrage and clear direction for Atlantic flows. When it collapses, it warns that the system is hitting its limits — either because Europe can no longer absorb incremental LNG, or because the US domestic market is tightening faster than exports can respond. And right now, **the alarms are flashing bright red**. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/US-LNG-profits-go-negative_001.png) The onset of negative US LNG profits in Europe came as something of a shock to casual observers. Of course, regular readers of *Energy Flux* saw this coming; the pernicious combination of higher costs and lower sales prices has been [eroding US LNG margins](https://www.energyflux.news/us-lng-eats-itself/) for many months now (see also [these](https://www.energyflux.news/the-big-squeeze/) [two](https://www.energyflux.news/us-lng-vs-america-first/) gems from the archive). Will long-run profits remain negative? Only for as long as the Henry Hub-TTF spread collapses towards the short-run marginal cost of liquefaction plus freight and regasification. Myriad factors could pull it back from the brink at any moment. The HH-TTF spread alone tells only part of the transatlantic gas price story. A lead indicator is the *correlation* between Henry Hub and TTF **—** and this critical relationship is at an **extraordinary inflection point**. This **Deep Dive** analyses the HH-TTF correlation: what drives it, how it behaves during different regimes, and what it tells us about the fast-shifting dynamics of US LNG trade in Europe. #### IN THIS ISSUE (click to expand) - How HH-TTF correlation is signalling unprecedented ****transatlantic dislocation** - Why freight, storage, and inventory drive correlation — and why the pattern ****breaks down** when the market hits extremes - How the TTF-JKM link explains periods of transatlantic alignment — and why it ****fails in a glut** - Why the Henry Hub-TTF decorrelation shock is likely only ****the first of many** in the LNG cycle đŸ’„*Article stats: 2,200 words, 10-min reading time, 9 charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Bears tighten grip on TTF URL: https://www.energyflux.news/bears-tighten-grip-on-ttf/ Last updated: 2025-12-04T07:45:23.000Z All data points in this week’s **Chart Deck** indicate the EU gas market is firmly in an LNG glut bear cycle. The global LNG market is now oversupplied by 2.4 million tonnes, up from 1 mt just a week earlier, as surging supply outstrips demand growth. The dramatic collapse in China’s LNG imports (-12 mt yoy) combined with surging supply growth (+15 mt yoy) eclipse Europe’s increased imports (+23 mt), inflating the physical surplus. Investment funds deepened their net short position in TTF futures last week to -50 TWh, and accelerated their overall EU gas exposure. There are now 454 hedge funds trading TTF futures with a total aggregate exposure (long plus short) of 932 TWh — both record highs. [Subscribe ](#/portal/signup) At the same time, commercial players continue buying the dip. Commercial Undertakings unwound short positions at a near-record rate to extend their net long position to +207 TWh — a four-year high. The TTF front month and futures curve softened further despite rapid depletion of EU gas stocks drive by heightened heating demand. TTF dipped briefly below €28/MWh earlier this week as markets price in the possible return of Russian gas to Europe, while discounting the EU’s own ban on Russian gas and LNG. This view is probably half-right; peace in Ukraine remains a distant prospect and resumption of Russian pipeline flows would face many months of delays and entrenched political opposition. At the same time, the EU ban is riddled with compromise that will diminish its potential market-tightening impact, if indeed it survives a legal challenge from Hungary and Slovakia in the European Court of Justice. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/12/1500x500-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. For now, however, geopolitics are taking a back seat as fundamentals are driving market sentiment and directionality. The €30/MWh support line is now a firm resistance level that will only be broken by a sustained recalibration of the supply-demand balance. Risk of a short-covering correction, as [flagged previously](https://www.energyflux.news/beware-complacency/), is ever-present. A confluence of harsh winter, unplanned supply outages and a reassessment of geopolitical realities is well within the realm of possibility. These risks are captured in the *Energy Flux* **TTF Risk Model**, which is continues signalling that bullish risk is moderately underpriced. As the glut gathers steam, the economics of US LNG are deteriorating at an alarming rate. Delivered cost in Asia for next winter is approaching spot price parity, while delivered cost in North-west Europe is priced to converge with EU hub prices as early as May 2027. This week’s downloadable Chart Deck contains 60+ slides that dig into the factors driving bearish sentiment, how positioning has shifted across the curve, and what the risk indicators suggest about the durability of the short move. If you want the full picture of how trader sentiment, market risks, economics and cargo flows are lining up as winter unfolds, it’s all in this jam-packed datavis-heavy Chart Deck: #### ****Highlights (click to expand):** - EU gas market is firmly in ****LNG glut bear cycle** (slides 7-8) - Global ****LNG oversupply widens** to 2.4 mt, up from 1 mt a week earlier (slide 57) - Investment funds ****deepen TTF net short position**, amid ****fire sale** of commercials’ short (slides 18-30) - TTF front month & futures curve ****soften further** despite rapid ****storage depletion** (slides 9-17) - US LNG delivered cost in Asia nears ****spot price parity** (slide 45) - US LNG delivered cost in NW Europe ****converges with EU hub prices** from May 2027 (slide 55) - Global ****FOB netbacks retrace** as freight rates ease further (slides 38-39) - TTF Risk Model points to moderate underpricing of bullish risk (slides 31-35) ****đŸ’„DOWNLOAD: 60+ slides in .ppsx and .pdf format** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Funds short TTF URL: https://www.energyflux.news/funds-short-ttf/ Last updated: 2025-11-27T09:05:11.000Z **Investment funds are finally shorting the EU gas market** — a decisive sentiment break that arrives oddly early in the heating season, aided by the deepening LNG glut. Market players scrambled to reprice the risk of the Russian gas returning to Europe after the (unworkable) US-Russia ‘peace plan’ for Ukraine was leaked to the press. Investment funds bought another 29 TWh of short positions last week, pushing their aggregate net position into negative territory (-11 TWh) for the first time since March 2024. This development, while long anticipated by *Energy Flux*, is nonetheless notable at this early stage of winter and with natural gas stocks at lower levels than in recent years. In essence, shorting TTF now is a bet against LNG supply shocks and cold weather — a brave position this side of Christmas. The geopolitical context that gave rise to this inversion in speculative directionality does not appear to support the price action it triggered. Peace in Ukraine remains a distant prospect; resumption of Russian pipeline gas flows to Europe even moreso. Europe remains reliant on robust LNG supply and Asian indifference towards the spot market. The big question facing the market is whether the current setup is a bear trap; the **TTF Risk Model** still signals as much. Bears have built out their short position to 463 TWh over 16 consecutive weeks, the longest ever period of short buying on TTF. At any point, this could break to the upside. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/11/1500x500-5-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. This week’s downloadable **Chart Deck** contains **60+ slides** that dig into the factors driving bearish sentiment, how positioning has shifted across the curve, and what the risk indicators suggest about the durability of the short move. You’ll also see how futures markets are **repricing US LNG** as marginally economic in Asia, with delivered costs drifting toward a 14% crude-slope equivalent for next winter — a sign of things to come, as feed gas costs rise and export sale prices fall (read more about that in the recent Deep Dive, [US LNG eats itself](https://www.energyflux.news/us-lng-eats-itself/)). Freight has lost some of its bite, briefly slowing the basin-lock dynamics that hardened suddenly in recent weeks. And the global flow charts show an increasingly Europe-heavy trade despite softening Transatlantic-NWE spreads. If you want the full picture of how sentiment, economics and cargo flows are lining up as winter begins, it’s all in this jam-packed datavis-heavy Chart Deck: #### Highlights (click to expand): - ****Funds flip net short**, while commercial users quietly expand longs — a clean sentiment divergence that strengthens the signal (slides 14-26) - The ****TTF Risk Model** raw signal pivots back into bearish risk pricing but lower latency scores are still pointing bullish, hinting at an overreaction rather than a structural turn (slides 27-31) - ****Freight rates ease slightly** but remain elevated, reinforcing Europe’s gravitational pull on Atlantic FOB cargoes despite soft TTF widening the Asian LNG premium (slides 35-36) - US LNG netbacks for Winter ’26 are ****collapsing toward marginality**, with spot-route economics now materially worse than long-term oil-linked alternatives (slide 42) - Global LNG flow charts reveal ****Europe’s rising share offsetting China’s disinterest** in LNG, underscoring a supply-led market where cargoes follow the least soft netbacks, not consumption strength (slides 52-65) ****đŸ’„DOWNLOAD: 60+ slides in .ppsx and .pdf format** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Chart Deck — 21 Nov 2025 URL: https://www.energyflux.news/chart-deck-21-nov-2025/ Last updated: 2025-11-27T07:41:27.000Z This is the new consolidated format for the *Energy Flux* Chart Deck. Instead of publishing a hand-picked selection of charts each week, everything now sits in one place for a cleaner experience. You get the full sequence laid out in order, allowing the data to speak for itself (50+ charts and graphs, minimal commentary). It should make navigating the data quicker and give a more complete view of global gas and LNG dynamics. ### Highlights: - **TTF Curve Slope** looks remarkably bearish for this time of year (slide 8) - **TTF Sentiment Tracker** settles into bearish quadrant (slide 13) - Investment funds are within a sliver of **net short TTF** (slides 17-18) - **TTF Risk Model** signals bullish risk under-priced (slides 26-29) - Soaring freight rates are driving **basinisation of flexible LNG** (slide 33-34) - US LNG is **rapidly losing its competitive edge** in Asia (slides 39-40) - Global LNG market is **physically oversupplied** by 1.6 million tonnes (slide 51) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### UK-Norway gas trade: Time for a New Deal? URL: https://www.energyflux.news/uk-norway-gas-trade-time-for-a-new-deal/ Last updated: 2025-11-19T05:50:33.000Z ✍ **This is a special guest post authored by* [***Baroness Bryony Worthington**](https://www.linkedin.com/in/bryony-worthington-9131018/?ref=energyflux.news) *and* [***Harry Benham**](https://www.linkedin.com/in/harrybenham/?ref=energyflux.news)**, and co-written by* [***Seb Kennedy**](https://www.linkedin.com/in/sebkennedy/?ref=energyflux.news) #### Article summary (click to expand) - ****Co-dependency:** The UK relies on Norway for almost half its gas, bought at market rates that hand Norway huge rents and inflate UK bills. - ****Misplaced focus:** London and Oslo obsess over long-term energy transition tech while ignoring the immediate affordability crisis driven by gas dependence. - ****The New Deal:** Cost-linked long-term gas sales contracts plus UK-backed storage and infrastructure investment would swap excess rents for political & economic stability. - ****Leverage moment:** The LNG glut will shrink Equinor’s revenues, giving the UK a rare chance to negotiate new long-term contracts at favourable prices. **What do Norwegian and British Prime Ministers talk about when they get together? Both are left-leaning governments, both are fending off attacks from the far right. Both are outside the EU and both benefit from the bountiful resources provided by the North Sea, the most valuable of which is — or in the UK’s case, was — oil and natural gas.** [Subscribe ](#/portal/signup) The UK’s early discovery of gas coupled with a big economy and large population meant by the 2010s domestic production had already peaked, and was falling much more rapidly than demand. No amount of wishing them away will change these facts. Norway’s circumstances are different. It is now the UK’s most stable and significant pipeline gas supplier, providing [31 billion cubic metres (Bcm) of gas in 2024](https://www.oxfordenergy.org/wpcms/wp-content/uploads/2025/10/NG201-UK-Gas-Volatility-of-Demand-and-Flexibility-of-Supply.pdf?ref=energyflux.news) — almost half of our national consumption. And it’s a reliable supplier with high environmental standards and some of the lowest upstream costs in the world (around $2/MMBtu). It also operates a largely nationalised gas energy system for production and distribution. However, and this is politically very important, this gas is sold at market rates, not production costs, which inflates prices in the UK and generates substantial rents. Equinor’s gas lifting costs are estimated at around $2/MMBtu for large North Sea fields such as Troll, compared to an average realised sales price of $13.5/MMBtu in 2024. As a result, Equinor’s 2024 pre-tax margin was approximately 25.9% (ÂŁ22 billion), which, while lower than its 2022 peak of >40%, is still incredibly strong. The Norwegian state owns a 67% stake in Equinor and in addition the government takes 78% in taxes, representing a huge rent from the natural resources they govern (ÂŁ16 billion in 2024). There is clearly an energy based interdependence between the UK and Norway: they have the resource, and we have the large local market. Norway produces 33 times more gas than it needs domestically, and the UK provides a reliable and major market (almost 20 times Norway’s internal domestic consumption). This interdependence has seen vast sums accrue to the Norwegian Treasury, at a time when affordability of energy has become a high profile political weapon. **Gas should therefore be a topic of constant conversation between the two countries.** However, recent high-level meetings between the UK and Norwegian governments appear to have been dominated by other issues such as defence. And on energy, the focus has been on longer term issues such as renewables, or on cost-adding (and inherently inefficient) initiatives such as carbon capture and storage (CCS) and hydrogen. There has been no dedicated focus on gas strategies or affordability, beyond a passing reference to ‘efficient markets’. This needs to change. #### **The UK’s gas dilemma (click to expand)* **How self-sufficient is the UK in gas and how does this benefit UK citizens? Since the peak in 2000, UK gas production has fallen by over 70%. At best, we now provide only half of our gas needs, a share that declines year-on-year — even with investment merely slowing the rate of loss to 2-4% per annum.* **And that investment comes at a cost. Unlike Norway, the British state does not hold a stake in the major gas producers. And, while we get tax receipts from production in our own country, we don’t get any preferential prices for consumers. In the UK’s highly liberalised market framework we allow domestic production to be sold at volatile global market rates — otherwise, oil and gas companies will stop investing.* **To escape this trap, the UK must focus on our gas dependency more in the short term so we can worry about it less in the long term. We must develop a strategy for a gradual gas phase-out, as we did with coal, by making the alternatives less expensive. That is now the task: a new, economically rational managed decline of gas centred on affordability.* **The answer lies not just in scraping the barrel of depleted North Sea reservoirs with tie-backs (the myth we can ever return to self sufficiency is just a distraction); but in forging a new class of strategic energy partnership where we seize the moment and allow ourselves to question today’s norms.* ## Focussing on the cost challenge What then should the Norway-UK energy dialogue focus on? Longer term, clean future energy systems such as offshore wind make sense. But there is an elephant in the room: the cost of energy. The UK’s massive reliance on gas, especially for winter heating, will not diminish quickly. And a lot of that gas arrives from Norway, which enjoys huge profit margins from sales to meet British demand. Around half of the cost of UK consumer gas bills is determined by upstream commodity costs. And while it is common to attribute high prices to abstract ‘global markets’, we must continually ask what more can be done to protect consumers from excessive rent taking. That includes taking a long hard look at our relationship with Norway. Because in a world where previously unthinkable things are happening to global trade, courtesy of populist politics and transactional foreign policy, there is a need and an opportunity to question norms. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/11/1500x500-3-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## The Art of the Deal: Challenging the status quo Rather than pursuing a Trumpian ‘UK first’ negotiating stance, London and Oslo could reframe the priorities of their bilateral energy trade relationship for mutual benefit. Signing new long-term contracts for Norwegian gas supply would reduce the UK’s exposure to volatile market prices, while offering Norway guaranteed demand and a price floor for gas it currently sells on the spot market. The timing for a frank conversation about affordability and demand certainty couldn’t be better as global gas prices look set to soften significantly thanks to [a flood of new LNG entering the market](https://www.energyflux.news/when-the-dam-breaks/). The question is how to leverage this to both parties’ advantage. A parallel diplomatic initiative could offer a sweetener: preferential UK government-backed critical energy infrastructure investment opportunities for capital investments from Norway’s Sovereign Wealth Fund. Examples could include boosting UK clean power generation, bolstering grid infrastructure, accelerating electrification, and, in the short to medium term, increasing the UK’s dismally low gas storage capacity. What we should focus less on are the illusory promises of CCS and the ‘hydrogen economy’ which will always be more expensive than the alternatives. #### **Gas storage: the UK’s Achilles heel (expand)* **One of the UK’s greatest physical energy system vulnerabilities is its extremely low gas storage capacity: just \~3.2 billion cubic metres (Bcm) or 19 days of supply. The paucity of this provision is apparent when compared to countries like Germany, which boasts \~25.6 Bcm or 119 days of supply. This lack of capacity leaves the UK acutely exposed to short-term price spikes; a nice situation for commodity market speculators but bad for end consumers.* **The energy sector is littered with examples of where leaving everything to the market proved unwise. Underprovision of gas storage is a prime example. For years, market prices did not support gas storage investments so facilities were shuttered and capacity dwindled. Before Russia’s full invasion of Ukraine, energy ministers would routinely cite the UK’s capacity to import expensive LNG from global markets as adequate security (which it is not).* **But loss of Russian pipeline gas triggered a global scramble for LNG and unprecedented price spikes in 2022-23, allowing well-positioned traders and commercial players to sell long physical gas/LNG positions into red-hot spot markets — and* [**gouge consumers in the process*](https://www.energyflux.news/europes-pyrrhic-gas-victory/)**. Extra gas storage would not have avoided the energy crisis, but if managed responsibly it might have mitigated the worst impacts on households.* ***De-risking gas storage investment** **The economics of gas storage in the UK are challenging as a pure play investment made by the private sector. However, gas storage — to the extent that it can take the edge off gas market volatility — offers strategic value to both the UK and the Norwegians. Especially as high energy prices are being weaponised in the UK, leading to increased political risk; policy stability on both sides is better for business.* **To facilitate investment in storage infrastructure, the UK has several levers it can pull to de-risk projects. The North Sea Transition Authority (NSTA), the UK’s oil and gas regulator, could be instructed to offer regulatory incentives such as fast-track permitting.* **The government could task Ofgem, the energy regulator, to create a Regulated Asset Base (RAB) model for new storage sites. And the Future System Operator could be directed to procure storage services through long-term contracts to balance the energy system, creating a predictable business case for the lifetime of the asset.* ***Strategic gas reserve** **De-risking storage in this way reduces the commercial imperative to exploit seasonal gas price arbitrage to recover capital investment, allowing storage sites to be managed and operated as a strategic reserve (rather than as a purely commercial play).* **Large gas storage investments backed by UK sovereign guarantees could be an attractive proposition for investment from Norway’s massive ÂŁ1.5 trillion Sovereign Wealth Fund, which tends to seek stable, long-term, value-accretive returns. There is also a virtuosity to using this fund in this way: UK consumers have paid into Norway’s ‘rainy-day’ oil fund over decades via purchases of Norwegian pipeline gas.* **Increased economic regulatory oversight and intervention by governments in the gas sector is not without precedent; Norway itself recently* [**brought petroleum pipelines into public ownership*](https://www.pipeline-journal.net/news/norway-buys-out-major-gas-pipeline-network-16-billion-deal?ref=energyflux.news) *to better control transportation costs and maintain export competitiveness. UK gas storage should be considered as part of a comprehensive affordability agreement.* ***The hydrogen distraction** **Perversely, while Britain’s fundamental natural gas storage vulnerability remains unaddressed, political and commercial focus is being diverted towards a speculative hydrogen future. Centrica Energy Storage, which owns and operates Rough, the UK’s largest storage facility currently operating at half capacity, is actively exploring repurposing the site for hydrogen storage.* **Hydrogen is a notoriously inefficient energy carrier, with* [**round-trip system losses as high as 70%*](https://www.iea.org/reports/the-future-of-hydrogen?ref=energyflux.news) *when accounting for energy lost during conversion. The widespread use of hydrogen for seasonal storage remains at best a distant prospect. To prioritise this over solving a known and present energy security risk and pricing challenge is a profound misplacement of strategic priorities.* ## Perfect time for a reset: Demand = leverage The current energy market environment may present a unique diplomatic opportunity for a reset of the relationship between the UK and Norway. With [an unprecedented wave of new LNG supply entering the global market](https://www.energyflux.news/sizing-up-the-lng-glut-part-1/) between now and 2030, market prices for gas traded on UK and European exchanges are poised to plummet. Futures markets are already pricing in a 30% drop in wholesale gas prices over the next three or four years, and further declines are anticipated as new supply enters the market more quickly than demand is able to absorb it. At current prices, Equinor is earning roughly €10 billion on the \~31 Bcm of gas it exports to the UK every year. A 30% drop in wholesale gas prices would erase approximately €3 billion from Equinor’s annual revenue stream from the UK. At 50%, the revenue loss would be greater than €5 billion. This stark projection underscores the significant financial vulnerability they face from a potential global LNG glut. The UK’s negotiating position is strengthened because the market itself is poised to inflict a severe financial wound. Offering a stable, lower-margin (far closer to production cost) supply contract, in exchange for strategic investment opportunities, represents a way for Equinor to mitigate a potential €5 billion annual headwind and secure a more predictable, long-term revenue stream from the UK market. ## What’s in it for Norway? Equinor is highly exposed to gas market prices, with only a fraction of its production under long-term contracts. This gives the UK leverage: the offer of new long-term sales and purchase agreements (SPAs) with a price cap and floor could be tempting on the cusp of a new structurally soft gas price regime. Norway’s state-controlled oil and gas company sold 63.6 Bcm of natural gas in 2024\. Judging from publicly known long-term contracts (with European buyers such as SEFE, OMV, PGNiG, Centrica, BASF and RWE) only around a third of that supply is tied up in contracts. The rest — we estimate roughly two-thirds of its gas output — is sold through Equinor’s trading arm on a merchant basis, meaning prices fluctuate with market conditions. Heavy spot exposure is a double-edged sword. When hub prices soar, the company’s coffers swell. When prices collapse, its earnings drop. The flip side is flexibility: Equinor still has plenty of uncontracted gas available that could, in theory, be committed to new long-term SPAs if buyers want more predictable pricing or supply security. 💡 **A few caveats: Equinor doesn’t publish a clean split between long-term and spot sales, so the one-third ratio is based only on deals made public in press releases. Some smaller or legacy contracts may not be disclosed, and new deals with Centrica and BASF only started in late 2025\. Even where there are contracts in place, the terms of these are not public but pricing corridors will have been negotiated that peg back to market prices.* The headline numbers are enough to show that most of Equinor’s gas remains merchant, leaving it highly responsive — and vulnerable — to market swings. The point is that there is an opportunity to link the UK’s essential, on-going need for affordable energy to Norway’s desire for guaranteed, long-term market access. A shared plan that helps insulate the UK from global gas prices could provide Norway with a more certain demand curve from the UK, enabling them to plan their own orderly transition. ## New pragmatism = win-win With market dynamics and political undercurrents shifting rapidly, business as usual is not an option for the UK or Norway. A new pragmatic approach would reorient our energy interdependence towards a mutually beneficial trade relationship — but it will require burning down some sacred cows. The UK must accept that the country will need gas for a while longer. Instead of pretending the market will fix it, the government must proactively recalibrate existing alliances around the singular objective of energy affordability. To achieve the desired outcome, it must make Norway an offer it can’t refuse, and build out strategic resilience (storage) along the way for good measure. By leveraging strong political ties to Norway to frame gas supply and inward investment as a partnership in affordability, the UK can achieve prices closer to production costs in the future and lock in the volume security needed to reduce pressure on consumer bills. Norway, for its part, must accept that post-Ukraine windfall rents from volatile markets are finite and politically risky and having benefited from them thus far they need to deploy those windfalls in strategic investments. By accepting cost-plus pricing on new contracts, they trade some short-term margin for long-term demand security and a predictable revenue stream for their remaining resource base, shielding the state from lower rents during the coming LNG supply glut. This approach also provides a model for responsible resource stewardship as they, too, face depletion. In addition, Norway gains exposure to strategic UK infrastructure investments on preferential terms that deepen the relationship with their biggest energy customer. The combined effect of softer upstream commodity prices and reduced exposure to price variability via long-term SPAs and investment in storage will flow through to a more economically secure and affordable energy system in both countries. Ultimately, North Sea gas is a finite resource and it will run out. Therefore, we need policy and political stability to chart a course away from a dependence on it — but in the short term that will only happen if we focus on keeping it an affordable commodity. Governments in London and Oslo stand to benefit by taking control of their intertwined energy systems for mutual benefit. #### Author bios (click to expand) ****Bryony Worthington**, The Baroness Worthington, is a British environmental campaigner and life peer who helped draft the landmark UK Climate Change Act 2008 and later founded the NGO Ember (formerly Sandbag) to accelerate the shift to clean energy. She was appointed to the House of Lords in January 2011 and now sits on the cross-bench, bringing her expertise in energy, climate and policy to the UK Parliament. She is currently on a leave of absence with her family in California. ****Harry Benham** is a British energy industry veteran with over 30 years of upstream experience at BP and Shell, who now serves as Executive Director of Ember and Senior Advisor to Carbon Tracker Initiative, focusing on the energy transition. During his oil and gas career he held senior roles such as Vice President/Procurement Director for major projects, and has since turned his expertise to advising on decarbonisation, policy and financial risk in the global energy system. ****Seb Kennedy** is a lifelong energy journalist and market analyst, and founding editor of **Energy Flux*. Since 2008, Seb has written for a wide variety of energy news outlets, and has held senior editorial roles in energy trade press ReNews, management consultancy Gas Strategies, and climate analytics non-profit Transition Zero. He has also freelanced for The Spectator, The Daily Telegraph, Energy Monitor, and Cornwall Insight, among others. ****Enjoyed this article?** Sign up to **Energy Flux* to get original, thought-provoking, 100% independent energy market analysis direct to your inbox [Susbcribe ](#/portal/signup/free) ### See no evil, hear no evil URL: https://www.energyflux.news/see-no-evil-hear-no-evil/ Last updated: 2025-11-19T07:52:05.000Z A corruption scandal is rocking Ukrainian President Volodymyr Zelenskyy’s inner circle. Yet despite [allegations](https://www.politico.eu/article/ukraine-corruption-scandal-explained-100m-plot-rocking-volodymyr-zelenskyy-energy-sector/?ref=energyflux.news) of a $100 million kickback scheme and the resignation of two ministers, the usual chorus of American lawmakers demanding accountability has gone quiet. This is a notable departure from the past, and the explanation lies not in Kyiv’s reformed governance, but in a fundamental shift in Washington’s role: from being Ukraine’s paymaster to becoming its energy salesman. For years, Washington treated corruption in Kyiv as strategic leverage. The relationship was littered with stand-offs over misconduct, opaque business ties, and politically inconvenient investigations. In 2019, the Trump administration froze military aid, ostensibly over Ukraine’s anti-corruption efforts, while simultaneously digging for dirt on Joe Biden. The then-former vice-president had his own complicated history in Ukraine, from his son’s lucrative role at Burisma to his successful push to fire prosecutor Viktor Shokin. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/11/1500x500-2-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. The point isn’t which side you believe; it’s that for years, Washington framed its support as conditional on credible reform and was willing to pull financial levers to enforce that view. This long record of moral scrutiny makes the current silence deafening. Historically, these new allegations would have triggered lectures, aid delays, and a fresh round of conditionality. Instead, from the same political actors who once wielded corruption concerns, we hear nothing. The reason for this newfound reticence becomes clear when you follow the money — or more specifically, the flow of American liquefied natural gas (LNG). ## Short-term fix, long-term bet War-ravaged Ukraine is turning into a red-hot gas market, redirecting flows and allegiances across Europe. At a recent energy summit in Athens, US energy secretary Chris Wright [declared](https://greekcitytimes.com/2025/11/08/greece-us-lng-deal-2030/?ref=energyflux.news): > “Greece was once at the end of a Russia-dominated energy chain. Now it is the gateway for American gas into Europe.” Wright vowed to “replace every molecule of Russian gas” entering Western Europe and position Greece as the pivotal middleman in the transaction. A temporary, pragmatic solution is already in motion. Greece’s DEPA [will route regasified US LNG](https://www.depa.gr/o-omilos-naftogaz-kai-i-depa-eborias-ypegrapsan-dilosi-protheseon-fysikou-aeriou-gia-ton-cheimona-2025-2026/?ref=energyflux.news) via its new Alexandroupolis terminal and the ‘Vertical Corridor’ gas pipeline network to help Ukraine through the winter. This is humanitarian and logistical relief, justified by the urgency of war. Poland’s Orlen is [playing a similar role](https://www.orlen.pl/en/about-the-company/media/press-releases/current/2025/November-2025/orlen-to-supply-us-gas-to-ukraine-agreement-signed-for-2026-deliveries?ref=energyflux.news). There is nothing ethically thorny here. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/11/VerticalCorridor.jpg) The Vertical Corridor gas pipeline network Similarly, Ukrainian firm DTEK’s recent [delivery](https://dtek.com/en/media-center/news/dtek-imports-us-lng-into-ukraine-and-region-with-first-shipment-via-lithuania/?ref=energyflux.news) of its first cargo of US-sourced LNG via Lithuania is a notable landmark. Trading arm D.Trading bought the cargo on a free on-board basis (FOB) from Venture Global’s Plaquemines project in Louisiana, demonstrating that Ukraine can manage risk effectively to reap the rewards of Transatlantic trade. The real story is a different, more strategic deal... _This post is for subscribers on the Premium tier only._ ### US LNG eats itself URL: https://www.energyflux.news/us-lng-eats-itself/ Last updated: 2025-11-14T08:28:10.000Z **The European and American gas markets are changing places.** After years of dramatic wartime price action, the Old Continent is becoming decidedly boring. Hub prices are stuck in a strong bearish sideways trend despite the promise of colder weather around the corner. The LNG glut is finally here. Meanwhile in America, after years of shale abundance and low prices, the domestic gas market is tightening on LNG plants’ insatiable thirst for feedgas. Henry Hub has spiked more than 50% since mid-October, driven by colder weather and record exports. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/11/Transatlantic-spread-compression---TTF-JKM-Henry-Hub-benchmarks-front-month_001-1.png) *Energy Flux* has been warning for some time that US LNG risks [eroding its own competitiveness](https://www.energyflux.news/us-lngs-affordability-crisis/). Unfettered export expansion drives up feedgas costs at home while helping to quell sales prices in export markets, [compressing inter-basin margins](https://www.energyflux.news/the-big-squeeze/). The latest Henry Hub spike might be only temporary. Or it could signal a deeper structural change. Either way, it reinforces those earlier warnings and gives a taste of what’s to come: US LNG profit cannibalisation. And with 2025 shaping up to be a record-breaking year for LNG project final investment decisions (FIDs), this is just the start of glut-era gas economics. #### IN THIS ISSUE (click to expand) 👇 - ****The margin vice:** How is the US LNG boom simultaneously spiking its own costs and crushing its own profits? - ****The shale reckoning:** Why can’t higher prices solve the looming gas supply crisis? - ****The coming purge:** How will a glut of loss-making cargoes trigger a brutal industry shakeout? - ****The innovation imperative:** How are the smartest buyers already hedging the risk? - ****Get the PDF:** Download a special US shale gas outlook slide deck, courtesy of a mystery contributor... đŸ’„ **ARTICLE STATS: 3,000 words, 12-min reading time, 10 charts & graphs* 👑 Elevate your market insight with **Energy Flux*. Upgrade to Premium to unlock this article and hundreds other like it **—* and support ****fiercely independent** market analysis [Subscribe / Upgrade ](#/portal/signup) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### ‘Let’s get physical!’: Abaxx takes on JKM URL: https://www.energyflux.news/lets-get-physical-abaxx-takes-on-jkm-in-quest-for-lng-benchmark-status/ Last updated: 2026-01-15T15:14:43.000Z **Abaxx Exchange wants to do what no one has managed in modern LNG trading: turn a paper price into a physical one.** For more than a decade, the Asian LNG spot market has been anchored by the Japan-Korea Marker, a Platts-assessed cash price built from bids, offers and trades reported by a small club of big players. JKM prices billions in LNG trade each month, yet no cargo has ever passed through its clearing mechanism — because it doesn’t have one. Now, a group of former traders and risk specialists believes it has built something better: an exchange-traded benchmark overseen by a dedicated clearinghouse that links futures prices to real cargo delivery, rather than to assessed market quotes. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/11/1500x500.jpg) ## Sign up tođŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe for free Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. **The stakes are enormous**. Success would redirect order flow worth hundreds of millions and redefine how LNG is priced across the world’s fastest-growing energy markets. Failure would confirm the sceptics’ view that physical settlement is an elegant theory unsuited to a seaborne commodity. > “The bottom line is LNG is a severely opaque market, and many like it that way.” Abaxx’s proposition is straightforward but audacious: a futures contract that guarantees not just a price, but an actual shipload of gas. To its advocates, that promise could finally align paper and physical markets, de-risk spot trade, and bring greater transparency to a system that many view as opaque. To its critics, it’s an operational nightmare that would swap counterparty risk for delivery frictions that cash settlement avoids. With short-term and spot trades accounting for an increasing share of overall LNG supply, **the battle for supremacy in global LNG pricing is heating up.** This isn’t an arcane debate about settlement mechanics; it’s a fight over who gets to define the value of a fuel that powers half the world’s economies. #### IN THIS ISSUE (click to expand) 👇 - ****Is the LNG market’s most trusted spot price fundamentally flawed?** The case against cash-settled price assessments - ****Can a physical cargo break the billion-dollar ‘club’?** The uphill battle to dethrone an entrenched incumbent - ****Are new exchange volumes real or just ‘paid for’?** Abaxx makes an astonishing admission about its early liquidity figures - ****Is LNG too complex for a physical futures contract?** The operational hurdles of boil-off and logistics that could doom the model - ****What happens when a paper trade demands a real ship?** The high-stakes, multi-step process of taking a futures contract into physical delivery — the Abaxx settlement mechanism explained in detail, for the first time đŸ’„ *ARTICLE STATS: 5,000 words, 12-min reading time* UPGRADE to 'PREMIUM' FOR INSTANT ACCESS Go beyond the headlines with deep & exclusive analysis of hot-topic energy issues. Subscribe to **Energy Flux* and support fiercely independent long-form energy journalism [Subscribe / Upgrade now ](#/portal/signup) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Arb to nowhere URL: https://www.energyflux.news/arb-to-nowhere-lng-ttf-jkm-eu-gas-market-moribund/ Last updated: 2025-10-30T08:07:13.000Z **Are you receiving* ***Flux Briefing** *, the \*free\* daily blast of AI-powered gas, LNG and geopolitical headlines? 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 ](https://exchange.energyflux.news/c/flux-briefing/20?ref=energyflux.news) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/10/DASH-1.png) **The European gas market is stagnant.** Prices are locked in a narrow range, suppressed by ample LNG supply and adequate storage. But beneath the calm, two signals warrant attention: a marginal profit for sending US LNG to Asia has re-appeared, and a growing number of vessels are being used for floating storage. These developments are by no means concrete trading opportunities. Instead, they reveal the underlying tensions in a market caught between a clear fundamental surplus and the persistent risk of a winter price spike. This contradictory dynamic is captured in the *Energy Flux* **TTF Risk Model**, whichis emitting a knife-edge signal that the forward curve is under-pricing winter risk. #### In ****today’s Chart Deck:** - Why the returning Asian premium signals ****European weakness**, not strength - What the rise in floating storage says about ****trader expectations** - How untimely fund ****short positions** clash with physical market bets - Why ****soft oil prices** are suppressing Asian LNG procurement - The ****key factors** that will determine if, when and how the stalemate breaks - How the ****TTF Risk Model** and ****Sentiment Tracker** reconcile market tensions - ****PLUS**: Full datavis gallery of global LNG supply-demand balances, with regional breakdowns đŸ’„ **Article stats: 1,900 words, 12-min reading time, 30 charts & graphs* Level up your LNG market insight. Subscribe to **Energy Flux* for ****instant access**, and support ****fiercely independent** market analysis đŸ”„ [Subscribe ](https://www.energyflux.news/#/portal/subscribe) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The Illusion of Power URL: https://www.energyflux.news/the-illusion-of-power/ Last updated: 2025-11-09T15:39:01.000Z *Some weeks, the price action is the main story. But in these days of eerily becalmed markets, the numbers don’t capture the full geopolitical drama unfolding across the energy complex.* *So instead of producing a Chart Deck, this week I took time to catch up with three major interconnected news stories: the EU’s Russian LNG ban, US and Qatari threats over the EU’s sustainability regulations, and new US sanctions on Russian oil companies.* *Reaction so far has been muted: TTF barely nosed above €32/MWh, and Brent edged to a three-week high of $65/barrel. I suspect the market is waiting to see how serious Western powers are about enforcement. The same goes for threats to halt LNG supplies.* *These are exactly the issues I discuss in this short (15-min) video podcast. Links to Apple, Spotify, and YouTube are below.* *For paying subscribers, there is a* [*Hot Take*](https://www.energyflux.news/tag/hot-takes/) *write-up based on this episode behind the paywall at the end.* *I also spent much of the week working behind the scenes to upgrade core elements of the Chart Deck itself, and teeing up some *exciting exclusive content* that I’ll be sharing next week.* *Stay tuned, and thanks for listening.* *–Seb* Watch on [YouTube](https://youtu.be/8eehSyzG4gA?ref=energyflux.news) Listen on [Spotify](https://open.spotify.com/episode/3wvvlCI7tKmze3wqWQhuDW?si=MyPcIzKFR6qa2BDmDDRLPQ&ref=energyflux.news) Below is the [Hot Take](https://www.energyflux.news/tag/hot-takes/) based on this episode 👇 Upgrade for full access, and support ****fiercely independent** energy market analysis. [Upgrade ](#/portal/signup) _This post is for subscribers on the Premium tier only._ ### The invisible divide URL: https://www.energyflux.news/ttf-the-invisible-divide-ice-endex-eex-eu-natural-gas-trading-investment-funds/ Last updated: 2026-03-20T03:59:42.000Z On the surface, the Dutch TTF gas market is a single entity: a deeply liquid trading hub that serves as the benchmark for natural gas prices across Europe. But a deep dive into the secret ledger of trading activity reveals a startling truth: **institutional investors are running two contradictory TTF playbooks simultaneously**. New analysis of regulatory data uncovers a fundamental split in capital flows that has remained hidden in plain sight — until now. Investment funds deploy parallel trading strategies across two discrete exchanges where TTF futures are bought and sold. Understanding this little-discussed dynamic offers a potential edge when reading EU gas markets. [Subscribe ](#/portal/signup) ## One price, two venues The Dutch Title Transfer Facility (TTF) is a physical hub for natural gas in north-west Europe. TTF futures are traded on two main exchanges: the Intercontinental Exchange (ICE Endex) and the smaller rival European Energy Exchange (EEX). While both ICE and EEX offer futures contracts that reference the same TTF hub, they are distinct marketplaces. Essentially, they are parallel markets offering exposure to the same underlying index, competing for liquidity and order flow. ICE Endex is the undisputed primary venue for TTF, functioning as the central pool of global liquidity and price discovery. To grasp the imbalance in scale, ICE cleared an estimated 45,000 TWh of TTF contracts in the first half of 2025, an average of \~250 TWh per day. EEX reported record volumes of 308 TWh traded in total in April 2025\. In other words, EEX’s volume for an entire month equals barely 1.2 days of ICE trading. However, **to dismiss EEX would be a mistake**. It remains a relevant and strategic secondary venue, offering a different mix of counterparties and its own clearinghouse. And hedge funds are ramping up TTF trading activity on EEX. [Subscribe ](#/portal/signup) This creates a market duality: two separate ledgers for the same underlying commodity, a fact that most analysts overlook. But as this [Deep Dive](https://www.energyflux.news/tag/deep-dive/) reveals, **sophisticated funds are actively exploiting** the bifurcation. Forensic data analysis by *Energy Flux* shows that Investment Funds — institutional investors, asset managers and hedge funds — are making uncorrelated and occasionally *opposing* directional TTF gas price bets between the two exchanges. The findings blow apart the assumption that TTF is a single homogenous marketplace. Instead, speculative funds are using the two venues strategically — possibly as a sophisticated means of exploiting regulatory arbitrage. This revelation is more than an arcane curiosity; the dislocation in fund flows between exchanges seems to be a **valuable lead indicator of TTF price action**. Supported by a brand new datavis deck, this groundbreaking research brings a new layer of understanding to the behavioural dynamics that shape Europe’s volatility-prone natural gas markets. #### IN THIS ISSUE: - ****One hub, two playgrounds**: the key differences between ICE Endex and EEX TTF futures - ****Decoding the dichotomy**: how to wrangle regulatory data to reveal divergent trade strategies - ****Directional duality**: what the data tells us about price bet bifurcation across exchanges - ****Actionable hypotheses**: why funds trade TTF differently on EEX and ICE, and how to use this knowledge - ****Price signal**: how the hidden TTF split offers a powerful new signal for reading EU gas markets - ****Post-publication update**: Why the ‘invisible divide’ is not just a strategic choice but is deeply embedded in the market’s architecture đŸ’„ *Article stats: 2,500 words, 16-min reading time, 11 charts & graphs* **Ready to elevate your market insight? Upgrade to a Premium subscription tier to unlock this exclusive market research & hundreds more like it...* [Upgrade for instant access ](https://www.energyflux.news/#/portal/subscribe) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Wrong at both ends URL: https://www.energyflux.news/ttf-curve-wrong-at-both-ends/ Last updated: 2025-10-09T10:57:38.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/10/DASH.png) The modus operandi of the European natural gas market is to price in unmaterialised bullish risks while discounting fundamentally bearish realities. This trend remains intact, although the extent of the upwards price skew is notably more muted than at this time last year — meaning **bullish risk is under-priced on the prompt**,while **bearish risk is under-priced further out on the curve.** **Were you forwarded this email? Don’t miss out, sign up for free here:* [Sign up ](#/portal/signup/free) Prices on benchmark TTF were jolted out of their autumn somnolence on Saturday, when Qatar halted navigation in its territorial waters due to unexplained GPS problems. November-dated TTF leapt 5% on Monday on fears of disruptions to Qatari LNG exports, but quickly shed those gains through Wednesday as loaded vessels continued departing Ras Laffan. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/10/Storm-in-a-teacup_001-1.png) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/10/Qatari-LNG-exports-unimpeded_001-1.png) The Qatari Ministry of Transport blamed a “technical fault in the GPS” for endangering safe passage in its portion of the Persian Gulf, without elaborating. The navigation halt was [partially lifted](https://x.com/MOTQatar/status/1975233526929977777?ref=energyflux.news) on Monday. Had this happened in October 2024, the price impact would have been parabolic. GPS faults are reportedly becoming more commonplace in Qatar. They are believed to be associated with the electronic warfare tactic known as ‘spoofing’, which can intentionally mislead navigation and guidance systems. Spoofing tends to rise in the Gulf during periods of heightened regional tension. ## Muted geopol vol Middle East tensions could subside after the White House on Wednesday negotiated a tentative ceasefire in Israel’s genocidal assault on Gaza. The protracted conflict dramatically increased the regional risk premium with the [carefully choreographed direct exchange of missile strikes](https://www.energyflux.news/geopolitical-theatre/) between Iran, Israel and the US earlier this year. Prisoner/hostage swap details are sketchy and implementation risk remains high, meaning energy markets will be reluctant to fully discount Middle East geopolitical risks for the foreseeable future. The Ukraine conflict is another perennial source of volatility. Russia’s intense bombardment of Ukraine’s energy infrastructure expanded notably last week, striking gas installations in the supposedly safe western region of the country. Specifically, a gas storage facility in Lviv was [set ablaze on Sunday](https://eadaily.com/en/news/2025/10/05/large-scale-fire-a-gas-storage-facility-was-hit-in-the-lviv-region?ref=energyflux.news). As reported in this morning’s [Flux Briefing](https://exchange.energyflux.news/t/turkey-gas-shift-russia-infrastructure-strikes-lukoil-refinery-attacks-flux-briefing-09-10-2025/817?ref=energyflux.news), > *The impact of these strikes extends to Europe, as Russian military strikes targeting Ukraine’s gas infrastructure are expected to cause significant reverberations across the European energy market, highlighting ongoing risks to regional energy security. These heavy bombardments of Ukraine’s gas facilities ahead of winter are likely to force Ukraine to increase imports from Western neighbors, potentially impacting European gas prices, though global LNG abundance is anticipated to mitigate significant price spikes. –* [*Flux Briefing, 09/10/2025*](https://exchange.energyflux.news/t/turkey-gas-shift-russia-infrastructure-strikes-lukoil-refinery-attacks-flux-briefing-09-10-2025/817?ref=energyflux.news) With both sides becoming more entrenched and energy installations increasingly in the crosshairs, further attempts to strike critical gas infrastructure such as the TurkStream pipeline cannot be ruled out. For TTF to be trading below €33/MWh — a discount of 14% compared to this time last year — the immediate risk this side of Christmas appears to be an upwards correction. This is supported in the latest run of the *Energy Flux* **TTF Risk Model**, which is now strongly signalling that bullish risk is being under-priced, even while the **TTF Sentiment Tracker** languishes in bearish territory. **Get instant access to the full Chart Deck with a free trial of Energy Flux:* [Subscribe ](#/portal/signup) But looking further ahead, **myriad bearish risks stalk the market**, not all of which are priced into the futures curve. Chief among these is the rarely-discussed **Chinese LNG trucking market**, which accounts for the lion’s share of China’s LNG procurement. And there are signs that this crucial demand segment could be losing steam. In parallel, **Pakistan** is struggling to deal with an oversupply of contracted LNG amid a boom in rooftop solar and battery storage — a bearish story that could be replicated across supposed LNG demand growth markets. This week’s **Chart Deck** breaks down the divergence and explains the paradox of inverted risk pricing along the TTF forward curve. #### In this issue 👇 - Why investment fund ****short buying** exposes the market to a sudden winter spike - How to reconcile the ****TTF Risk Model** bullish signal with bearish ****TTF Sentiment Tracker** - Don’t be fooled by the ****backwardated TTF curve slope** - The myriad factors ****undermining** the LNG demand growth story - How China became ****self-sufficient in LNG** for heavy-duty trucking - Why the ****solar PV boom** is giving Pakistan an LNG headache - And more! Level up your gas market insight. Subscribe to **Energy Flux* for instant access, and support fiercely independent market analysis [Subscribe ](https://www.energyflux.news/#/portal/subscribe) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Arctic LNG 2: In from the cold? URL: https://www.energyflux.news/arctic-lng-2-in-from-the-cold/ Last updated: 2025-10-03T08:07:44.000Z Sanctioned cargoes of Russian LNG are flowing steadily into China from Novatek’s Arctic LNG 2 project. The opening of the floodgates since the high-level Trump-Putin summit in Alaska in August has transfixed gas analysts and geopolitical observers alike. The fate of Arctic LNG 2 is undeniably significant. **But the media attention it has attracted is disproportionate to the volumes at stake.** **Get fiercely independent market analysis straight to your inbox. Sign up to Energy Flux to access* ***free member benefits** *:* [Subscribe ](#/portal/signup) Even in the most optimistic scenario for Novatek, the project is not expected to export more than 20 cargoes this year. More likely outturn is fewer than 15 cargoes between now and Christmas, according to experts and calculations by *Energy Flux*. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/10/Arctic-fringes-barely-move-needle_001.png) Still, every extra drop of LNG matters in a global market that is steadily plunging into a [long, deep period of oversupply](https://www.energyflux.news/when-the-dam-breaks/). At the same time, the more that analysts bake Arctic LNG 2 exports into their base case modelling and winter gas outlooks, the more geopolitical risk is attached to those forecasts. So, how exactly should we think about the Russian LNG wildcard lurking in the [cautiously benign winter outlook](https://www.energyflux.news/beware-complacency/)? This **Deep Dive** offers a realistic assessment of Arctic LNG volumes entering the market in 2025-26, with input from global real-time data and analytics company Kpler. It also explores the sanctions- and war-related risks associated with Western policy responses to the partial revival of Russia’s stunted LNG flagship project. #### In this issue
 - A ****pragmatic view** of Arctic LNG 2 exports in 2025 and 2026 - The low-probability, high-impact **geopolitical risk factors** complicating Sino-Russian LNG trade - How far ****US sanctions enforcement** could ripple out across China’s gas sector, if pursued - Why ****Russian LNG could become a battlefield target** in the deadlocked Ukraine conflict - The ****operational & logistical implications** of the EU’s accelerated Russian LNG ban **Get instant access to this in-depth geopolitical report by trialling the* ***Premium** **or* ***Deep Dive** *subscription tier* [Start 7-day free trial ](#/portal/account/plans) đŸ’„ *Article stats: 2,700 words, 15-min reading time, 10 charts, maps & graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Moldova’s long road to energy independence URL: https://www.energyflux.news/moldovas-long-road-to-energy-independence/ Last updated: 2025-09-30T08:00:34.000Z [Subscribe ](#/portal/signup) Moldova’s energy sector has undergone a drastic transformation in just a few years. As recently as 2021 the country was almost completely reliant, directly or indirectly, on Russia for its energy needs — a dependence Moscow could wield as political leverage. **Today that grip has been broken.** Moldova now imports neither gas directly from Russia’s Gazprom nor electricity from the breakaway region of Transnistria, where power had long come from a Russian-controlled plant. At the same time, it has reformed and liberalised its energy sector in line with EU standards. Building on these reforms, President Maia Sandu’s ruling pro-EU Party of Action and Solidarity (PAS) won a decisive victory over pro-Russian opposition parties in crucial parliamentary elections on 28 September. The election had been framed as a popular choice between closer links with Brussels or veering back towards Moscow. The high stakes were laid bare when Moldovan prosecutors launched one of the country’s largest security operations six days before the ballot, with 250 raids targeting a Russia-backed network that allegedly sought to subvert the democratic process. Following the raids, 74 people were taken into custody. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/09/image-4.png) The pro-EU PAS party won more than double the vote share of pro-Russian bloc BEP. Credit: [RFE/RL](https://www.rferl.org/a/moldova-eu-election-result-win-brussels-chisinau/33543650.html?ref=energyflux.news) The surprising margin of victory for PAS is a major milestone for the tiny ex-Soviet state, which is nestled strategically between sister country Romania, an EU member state, and war-torn Ukraine — a country that is literally fighting to defend the right of self-determination that the people of Moldova expressed at the ballot box on Sunday. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/09/Sandu-Zelenskyy-1.jpg) Ukrainian President Volodymyr Zelensky and Moldovan President Maia Sandu in 2023\. Credit: [Presidency of the Republic of Moldova](https://presedinte.md/eng/presedinte/foto/page:9?url=presedinte%2Ffoto&ref=energyflux.news) The result is expected to accelerate Moldova’s accession to the EU and integration with European energy markets. **But the tiny landlocked country is not out of the woods yet.** Like much of Europe, it still struggles with high energy costs — a heavy burden for a country with low GDP per capita. And while Russia can no longer weaponise supplies, Moldova’s options for importing gas and electricity remain limited, leaving it vulnerable to disruptions. public service announcement 🧭 *Energy Flux* is supported entirely by readers: no ads, no corporate sponsorship. If you value fiercely independent analysis, please consider upgrading to a paid subscription plan to help keep the newsletter going — and access unrivalled energy market insights. [Upgrade to paid ](#/portal/signup) Having already endured several tough winters, the absence of domestic gas storage capacity is another weakness. Recent years have demonstrated across Europe how critical winter stockpiles can be to market stability and security of supply. This special post-election [**Deep Dive**](https://www.energyflux.news/tag/deep-dive/) assesses the implications of the vote, in the context of Moldova’s long struggle for autonomy and independence from Russian energy. #### ****In this issue
** - How did Moldova break free from Russia’s energy grip — ****and at what cost?** - ****Moldova’s pro-EU election victory**: what role did energy independence play? - ****Gazprom vs Moldova**: The multi-billion-dollar gas debt dispute that won’t go away - What vulnerabilities remain in Moldova's bid for ****true energy autonomy**? Level up your geopolitical insight. Subscribe to **Energy Flux* and support fiercely independent energy market analysis [Subscribe ](https://www.energyflux.news/#/portal/subscribe) đŸ’„*Article stats: 3,000 words, 18-min reading time, 2 infographics* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Beware complacency URL: https://www.energyflux.news/beware-complacency/ Last updated: 2025-11-24T08:01:53.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/09/Dashboard-1.png) ‘Looser fundamentals’, ‘reduced tail risk’, ‘lower volatility’
 the dog days of rangebound summer trading have bored many European gas observers into acknowledging bearish market realities. There is a growing awareness that storage levels are healthy (despite all the fuss at the start of the year); that LNG ‘scarcity’ is overstated and diminishing; that demand growth is weaker than expected; and that – crucially – investment funds have significantly scaled back their long bets. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/09/GAS-STORAGE_001.png) [Subscribe ](#/portal/signup) **However, just as consensus starts to soften, so the facts seem to change.** As the fourth quarter approaches, what looks like a placid pre-winter setup could be harbouring some nasty surprises for the unprepared. The latest run of the *Energy Flux* **TTF Risk Model** is signalling that bullish risk is now being under-priced. Not because of a change in the fundamentals, which remain structurally bearish; but because of subtle shifts in the forward curve, and the way that traders and hedge funds are quietly repositioning. ****Level up your market insight:** subscribe to **Energy Flux* and support fiercely independent market analysis [Subscribe ](#/portal/signup) This week’s [**Chart Deck**](https://www.energyflux.news/tag/chart-deck-2/) explores how physical and financial players are insuring against near-term weather, geopolitical or supply-side shocks, even as improving physical balances provide a softer grounding. #### In this issue... - ****Don’t be fooled** by deceptively low volatility and rangebound pricing - ****Dislocated time spreads** tell a chilling winter tale - Why a ****record number of investment funds** are quietly crowding into strategic positions - The ****near-term risks** that are stacking the deck against further price declines in Q4 - ****Asymmetrical incentives** will keep the market on its toes until the New Year - How a reach to crystalise ****extrinsic storage value** could trigger an precipitous Q1 correction I have talked at length about the looming LNG glut, and how it will transform global energy markets for years. However, the sober reality is that there is one more winter still to navigate before a new structurally lower pricing regime truly beds in. This is how the pre-winter market is shaping up. đŸ’„*Article stats: 1,750 words, 7-min read, 11 charts & graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The Shifting Sands of Gulf Security URL: https://www.energyflux.news/the-shifting-sands-of-gulf-security-saudi-arabia-pakistan-mututal-defence-pact-nuclear-deterrant-middle-east-gulf-geopolitics-oil-petrodollar/ Last updated: 2025-09-30T04:56:52.000Z On 17th September 2025, Saudi Arabia and Pakistan signed an historic mutual defence pact, marking the first formal agreement of its kind between two Muslim-majority states. **The NATO-like pact extends Pakistan’s nuclear deterrence to Saudi Arabia, creating a new nuclear-backed security bloc in the Middle East that could alter regional threat perceptions and crisis dynamics.** [Subscribe ](#/portal/signup) The text is unequivocal: any aggression against one will be treated as an attack on both. For Riyadh and Islamabad, the pact is not merely ceremonial. It is a statement of intent at a moment when Gulf security has never looked more fragile and when old assurances from Washington no longer carry the weight they once did. This is a special [**Deep Dive**](https://www.energyflux.news/tag/deep-dive/) guest post from two esteemed authors with extensive knowledge and expertise in Gulf regional security, diplomacy, and energy issues. - **Imran Nasir Sheikh** is a seasoned naval aviator with extensive operational experience in maritime surveillance and anti-submarine warfare - **Asim Riaz** holds an M.Phil in Strategic Studies from the National Defence University, Islamabad, with degrees in Energy Management and Mechanical Engineering Their analysis peels back the many layers of significance to this landmark agreement, how it could alter the regional balance of power, and the energy market implications therein. đŸ’„ *Article stats: 2,900 words, 18-minute reading time, 3 maps & infographics* ****Level up your geopolitical insight.** Subscribe to **Energy Flux* and support fiercely independent market analysis [Subscribe ](https://www.energyflux.news/#/portal/subscribe) _This post is for subscribers only._ ### Gastech 2025 presentation: Mapping the storage-speculation nexus URL: https://www.energyflux.news/gastech-2025-presentation-mapping-the-storage-speculation-nexus/ Last updated: 2025-09-18T08:00:19.000Z In today's episode, I run through the paper I presented at the recent Gastech 2025 conference in Milan. The title of the paper is *Mapping the Storage-Speculation Nexus: Hedge fund positioning and the TTF forward curve*. The paper explores a novel methodology for identifying investment fund trading strategies on Dutch TTF, the benchmark European natural gas futures price. In the video I explain the methodology in full, and what it tells us about last year's TTF bull run and subsequent dramatic correction at the start of this year. I conclude by floating possible policy reforms that could be explored to improve transparency and potentially mitigate some of the speculation-driven price volatility that has characterised TTF in recent times. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/09/2025-09-10-09.32.02-1.jpg) From left: Seb Kennedy (Energy Flux), Anne-Sophie Corbeau (Columbia CGEP), Christoph Halser (Rystad), Ming Cai (ENN Natural Gas) @ Gastech 2025, Milan This was my first appearance on the podium and I must admit I was quite nervous beforehand, but thorough preparation paid off and the session went well (despite a minor technical glitch at the start). It was a real honour to appear on stage with other esteemed analysts, whose presentations were also fascinating. There was a pretty decent turnout and the audience was highly engaged, as evidenced in the Q&A. Links to the video pod are below, alongside the full slide deck in PDF format for download. ✍ Sign up for free to continue reading... _This post is for subscribers only._ ### Gastech 2025 walk & talk URL: https://www.energyflux.news/gastech-2025-walk-talk/ Last updated: 2025-09-15T07:00:34.000Z I’m still assimilating the many insightful conversations and conference sessions at last week’s [Gastech mega-event in Milan](https://www.energyflux.news/gastech-2025-peak-lng-hubris-natural-gas-glut-investment-trump-politics/). Before I left, I recorded a 30-minute walking tour of the exhibition floor while talking through some of the more pertinent topics I chewed over with friends, contacts and other delegates. I have turned this into a video podcast episode and *aide-mĂ©moire* that captures some of the details I didn’t have time to jot down. I hope it makes for a worthwhile watch, if only to get a sense of the space for those who couldn’t be there. ****🚹 ENDS TONIGHT**: Get Premium subscription with half-price Gastech Special [Upgrade with 50% discount ](https://www.energyflux.news/gastech25-special) ## Key topics & takeaways In this ‘stream of consciousness’, I discussed the following: - How Gastech was a **momentous event** at a significant historical juncture - The **widening disconnect** between public statements from industry leaders and market realities - How over-investment in LNG capacity is **reshaping** global glut depth & duration outlook - The multiple factors **compressing** transatlantic margins (as detailed in [last week’s Hot Take](https://www.energyflux.news/gastech-2025-peak-lng-hubris-natural-gas-glut-investment-trump-politics/)) - North-West Europe-TTF price dislocation as lead indicator for **distressed LNG cargo pricing** - How **merit order economics** and cost inflation affect LNG investment attractiveness - The **history of LNG**, and the difference between conventional integrated export projects vs US LNG second wave - The political & economic implications of gas/electricity **price inflation** in the domestic American market - Can US shale production growth keep up with **competition** for upstream gas resources (LNG vs data centres)? Without further ado, here are the audio/video links: ✍ Sign up for free to continue reading... _This post is for subscribers only._ ### Gastech 2025: Peak LNG hubris URL: https://www.energyflux.news/gastech-2025-peak-lng-hubris-natural-gas-glut-investment-trump-politics/ Last updated: 2026-06-01T23:26:10.000Z **They say ‘when you’re in a hole, stop digging’. The same could be said for when you’re in a bubble: stop blowing.** [Subscribe ](#/portal/signup) Gastech 2025 in Milan will be remembered as the high water-mark of hubris in the current late stage of the LNG investment cycle. Delegates at the world’s biggest party for gas executives this week unleashed a jaw-dropping stream of LNG offtake deals and investment into new liquefaction capacity. The world barely needs these volumes today, let alone in the next five or so years when additional greenfield sites will collide with the tail-end of an unprecedented [global glut](https://www.energyflux.news/sizing-up-the-lng-glut-part-1/) of the fuel. Emboldened executives at Gastech are flying so high, you could be mistaken for thinking they have lost touch with the market-bending reality their giddying investments are creating. The cold truth is they know which way the wind is blowing. Doubling down on what looks like a losing poker hand is all part of the plan. ✍ Sign up for free to continue reading... _This post is for subscribers only._ ### Aramco slow-walks LNG expansion URL: https://www.energyflux.news/aramco-slow-walks-lng-expansion/ Last updated: 2025-09-08T18:21:25.000Z Saudi Aramco has been talking about expanding into liquefied natural gas (LNG) for the best part of a decade. Last month, CEO Amin Nasser appeared to commit to the strategy by unveiling a target to build a top-ten global LNG portfolio. The idea has always captivated investors and editors; Saudi Arabia’s national oil company has the financial heft to build a world-beating LNG empire, if it wanted to. Aramco hopes to finalise LNG investments totalling 7.5 mtpa by 2030, before expanding to 20 mtpa thereafter — from a standing start. In terms of operational assets in its portfolio, Aramco has barely \~1 mtpa of indirect exposure, or **0.3% global market share**, according to research by *Energy Flux*. Saudi Aramco is sitting on a sea of domestic gas at home. It boasts a deep balance sheet, industry-leading returns and low debt levels that are still the envy of most listed oil companies, even if some of the shine has come off since the 2019 initial public offering. The Saudi state oil company is spearheading the kingdom’s economic diversification agenda, and gas is supposedly the world’s great transition fuel. LNG might seem like the logical next step
 and yet, it is barely a footnote in the NOC’s growth plans. **So, why is Aramco’s LNG expansion taking so long to get off the ground?** This subscriber-only **Deep Dive** explores why Aramco’s 20 mtpa ‘target’ is little more than a tease for capital markets — and what the slow-walk approach tells us about the risk-reward balance for investments in this space. #### IN DEPTH: How Aramco **really* sees LNG 👇 - The ****surprising truth** behind Aramco’s tiny LNG footprint - Why geopolitical and project risks ****keep the kingdom cautious** - How LNG ambitions could ****erode Aramco’s stellar ROACE** - The domestic pressures that quietly ****cap Saudi gas exports** - The ****high-stakes calculus** of investing in a global LNG glut ****LAST CHANCE:** Subscribe to **Energy Flux* with 50% discount **(offer ends this week)* [Use coupon GASTECH-SPECIAL ](https://www.energyflux.news/gastech25-special) đŸ’„ *Article stats: 2,700 words, 16-min reading time, 4 charts & graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Decorrelation! URL: https://www.energyflux.news/ttf-decorrelation-eu-natgas-winter-outlook-chart-deck/ Last updated: 2025-09-05T06:57:17.000Z [Subscribe ](#/portal/signup) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/09/Dashboard.png) Gas prices usually buckle when hedge funds pile into shorts, but not this August. Investment funds have driven total short positions on Dutch TTF to a 16-month high, yet prompt prices remain rangebound around €32-33 per MWh. In other words, **the usual correlation between fund positioning and price action has broken down.** The **TTF Sentiment Tracker** illustrates this dynamic well: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/09/Decorrelation---scatter_001.png) How should we interpret this anomaly? Either (a) there’s offsetting buying elsewhere (e.g. short ICE Endex TTF, long EEX TTF), or (b) funds are following rather than anticipating price action. The latter seems unlikely because it is not what they get paid to do! Alternatively, (c) liquidity is thinner than usual in August, so fund flows aren’t transmitting cleanly to price. The decorrelation is a signal, but one that may resolve once September liquidity returns in the data. Until then, it is worth looking closer at positioning of both Investment Funds and Commercial Undertakings. The datapoints paint a compelling picture of where winter market outlook aligns across market participants, and how they are pricing up outlier risks. Most notably, **speculative capital is steaming towards a highly significant inflection point.** Hedge funds are still net long, but their bullish conviction is rapidly collapsing. Bearish momentum is undiminished and could break through a threshold within weeks, as the following charts reveal. đŸ’„ **Article stats: 1,000 words, 6-min reading time, 9 charts & graphs* 👇 Need access? Offer ends soon! 👇 [GASTECH SPECIAL: 50% off Premium subscription ](https://www.energyflux.news/gastech25-special) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### PoS2: It’s not about the gas URL: https://www.energyflux.news/pos2-its-not-about-the-gas/ Last updated: 2025-09-02T15:53:00.000Z **China and Russia just unveiled a sweeping new package of gas deals, and the reaction is predictably feverish.** [Subscribe ](https://www.energyflux.news/#/portal/subscribe) Moscow trumpeted an increase in flows through Power of Siberia (from 38 to 44 Bcm per year), a modest expansion of the Far East pipeline due in 2027 (from 10 to 12 Bcm), and — most eye-catching of all — a new cooperation agreement on the construction of Power of Siberia 2, a 50 Bcm mega-pipeline that would funnel Siberian gas into northern China. On paper, this looks like a decisive deepening of the Sino-Russian energy relationship. And politically, that’s exactly what it is. Markets, however, should take a breath. These announcements change almost nothing about the immediate global gas balance. The only genuine new molecule commitments are small increments (six Bcm here, two Bcm there) that will barely register against the \~430 Bcm that China consumes annually. The big headline item, Power of Siberia 2, remains stuck where it has been for two decades: in the world of MoUs, feasibility studies, and presidential handshakes. There is still no gas sales agreement, no firm construction timeline, and no sign of commercial terms that would make the project bankable. Gazprom CEO Alexei Miller hailed a “legally binding memorandum” to build the project: a sublime oxymoron that perfectly captures the essence of PoS2, the great gas pipeline that is always 10 years away. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/09/Power-of-Siberia-2.jpeg) However, there is substance to the symbolism. Deepening Sino-Russian relations will loom large over the post-2030 energy market, colouring commercial perceptions and exerting a chilling effect on LNG contracting efforts. Furthermore, it challenges the US to recalibrate its energy diplomacy towards Russia, and raises the stakes on Europe’s strategic alignment with China over the energy transition. The cooperation deal is loaded with significance that is worth unpacking. đŸ’„ *Article stats: 1,300 words, 8-min reading time* ****Level up your market insight for less**: subscribe to **Energy Flux* with a time-limited discount (half-price Gastech special) [Upgrade with 50% discount ](https://www.energyflux.news/gastech25-special) _This post is for subscribers on the Premium tier only._ ### When the dam breaks URL: https://www.energyflux.news/when-the-dam-breaks/ Last updated: 2025-09-02T13:29:12.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/DASH-2.png) **The global liquefied natural gas glut has arrived. The thin end of the wedge of new LNG supply is manifest in key datapoints – yet commodity markets are still not fully pricing in this dawning physical reality.** [Subscribe ](#/portal/signup) The confluence of indicators pointing towards a sustained loosening of global gas balances is becoming overwhelming. All signs point the same way. Whether you’re looking at North American LNG supply growth, cratering Chinese demand, investment fund short-buying, or Russia’s defiant LNG diplomacy, the message is the same: **the gas glut cometh**. With the commissioning of Plaquemines LNG, ramp-up of LNG Canada, and Golden Pass inching towards first LNG in Q4, an unprecedented supply wave is breaking in slow motion over global energy markets. ## Russia emboldened Adding to the deluge is a Nobel prize-seeking American president apparently turning a blind eye to the return of sanctioned Russian LNG. The big news in the LNG world this week was a cargo from Novatek’s heavily sanctioned Arctic-LNG 2 project discharging at a port in southern China. The Arctic Mulan vessel loaded up from the Kamchatka trans-shipment facility in Russia’s Far East in June, before docking at PipeChina’s Beihai LNG terminal in the Guangxi Autonomous Region yesterday morning. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/Arctic-Mulan-voyage-Kpler-1.PNG) Source: Kpler The timing was noteworthy: President Vladimir Putin will be making a rare trip outside of Russia to attend a high-level summit in the Chinese port city of Tianjin, which runs from Sunday through Tuesday. Cue a rehash of this classic meme: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/meme-1.jpg) [Kudos](https://www.linkedin.com/posts/clio-cy-ho%5Fputin-x-president-xi-x-trump-activity-7366857795242991617-CB7o?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop&rcm=ACoAAAJvzgwBvCHdWBI1dN%5F0QsOZ96ew1O9XDKQ) :D Russian LNG carrier movements are carefully choreographed. When Putin met Trump in Alaska, there was a flurry of activity as vessels that had idled for months suddenly set sail for Asia. Currently, at least six vessels are traversing the Northern Sea Route either laden with Arctic 2 molecules or signalling to load up with sanctioned LNG from Kamchatka. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/Arctic-Metagaz.PNG) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/buran.PNG) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/Christophe.PNG) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/Iris.PNG) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/Voskhod.PNG) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/Zarya.PNG) Maps and info from Kpler Until now, none had unloaded their forbidden cargo; the threat of sanctions deterred buyers. With PipeChina apparently breaking the embargo, the question is whether US authorities will enforce the sanctions regime imposed against Russia during the previous Biden administration. At the time of publication, neither the US State Department nor the White House had responded publicly to the sanctions breach. Inaction is a signal: US sanctions are no longer water tight, but *discretionary*. The Trump administration might turn a blind eye, especially if it fits his current negotiating tactics (which include [offering coveted American liquefaction technology to Russia](https://www.msn.com/en-us/news/world/us-considers-energy-concessions-for-russia-in-push-for-ukraine-peace/ar-AA1LgkB0?ref=energyflux.news) in exchange for a Ukraine peace deal – make of that what you will). The upshot? Don’t be surprised if Russian LNG cargoes start discharging at ports across Asia and even Europe this winter, before the EU ban on Russian energy imports comes into force in 2027. The near-term impact is not massive, but it could “eventually” mean “30 bcm of LNG coming back to the market to add up to the pile of LNG under construction”, according to expert analyst [Anne-Sophie Corbeau](https://www.linkedin.com/posts/anne-sophie-corbeau-8a758a4%5Flng-sanctions-russia-activity-7366754799280680961-dIfS?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop&rcm=ACoAAAJvzgwBvCHdWBI1dN%5F0QsOZ96ew1O9XDKQ). ***Level up your market insight for less** *: subscribe to Energy Flux with a time-limited discount (half-price Gastech special)* [Upgrade with 50% discount ](https://www.energyflux.news/gastech25-special) ## Muted price impact Dutch TTF, the European gas benchmark, fell <3% on the news of illicit Russian cargoes leaking into the market. Sep-25, the front month contract, settled at €31.70/MWh on Thursday. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/TTF-JKM_001.png) It is a wonder that TTF has not already crashed through the €30/MWh support level. Only European restocking, scarcity narratives and geopolitical risk premia have kept prices inflated above fair value; the big question is for how long that floor can hold under the weight of excess supply. [Start the discussion on Flux Exchange](https://exchange.energyflux.news/?ref=energyflux.news) The fate of Russian LNG, while of geopolitical significance, will **not** significantly alter the winter gas market balance. This week’s [**Chart Deck**](https://www.energyflux.news/tag/chart-deck-2/) takes a microscope to the factors moving the needle. These include: - **Record-breaking** global LNG supply surge outstripping demand growth - China, south-east Asia and Latin America LNG imports **surprising to the downside** - Investment funds **shorting TTF** and cutting directional bets to a 16-month low - Divergent **commercial hedging** and **discretionary exposure** by physical players signalling neutral/soft 
 and lots more besides. All of the above are reflected in the only metrics that matter: - The *Energy Flux* **TTF Sentiment Tracker** and upgraded **TTF Risk Model** (v2.1), both of which point south 📉 Did I hear you say LNG deluge? Let’s *dive in*! (sorry) **Need access? Use GASTECH25 for half-price discount.* [Get 50% offer coupon ](https://www.energyflux.news/#/portal/subscribe) đŸ’„ *Article stats: 2,500 words, 15-min reading time, 20+ charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### You’re invited: Energy Flux drinks reception in Milan URL: https://www.energyflux.news/youre-invited-an-intimate-energy-flux-gathering-in-milan/ Last updated: 2025-08-27T14:42:27.000Z I’m hosting something special during Gastech in Milan: a private get-together for *Energy Flux* premium subscribers only. Consider it my way of saying thank-you for supporting the newsletter, and to mark *Energy Flux*’s first ever appearance on the podium of a [major industry event](https://www.energyflux.news/see-you-at-gastech-2025/). This won’t be another crowded reception or sponsor-laden mixer; more like an antidote to the corporate schmoozing of Gastech. The idea is simple: a stylish but relaxed venue, speak-easy vibe, and the chance for a clutch of likeminded readers to actually get to know each other. Details below: _This post is for subscribers only._ ### See you at Gastech 2025! URL: https://www.energyflux.news/see-you-at-gastech-2025/ Last updated: 2025-08-19T07:00:13.000Z **📱 Big news: I have been invited to speak at this year’s Gastech conference in Milan.** I will be presenting a paper in the **Emerging Gas Pricing Trends** session on Wednesday 10th September at 10:30am. The paper will showcase the *Energy Flux* methodology to reverse-engineer investment fund positioning in TTF futures. This will be followed by a panel Q&A. Presenting a paper will be a first for me. As a journalist, normally I am in the audience taking notes and raising my hand. Now the tables are turned...! đŸ”„ ***GASTECH SPECIAL:** *To mark the occasion, I am offering a time-limited* ***50% discount** *on annual Premium subscriptions. I rarely offer discounts, so don’t miss this one* 👇 [Get coupon ](https://www.energyflux.news/gastech25-special) The title of my Gastech paper is **Mapping the Storage-Speculation Nexus: hedge fund positioning and the TTF forward curve.** This research is based on the three-part series of the same name first published in the *Energy Flux* newsletter (see parts [one](https://www.energyflux.news/the-storage-speculation-nexus/), [two](https://www.energyflux.news/storage-speculation-nexus-part-2-natural-gas-ttf-eu/) and [three](https://www.energyflux.news/the-storage-speculation-nexus-part/)). The **Storage-Speculation Nexus** series proved quite popular because it shed light on how investment funds move between different maturities along the TTF forward curve in response to geopolitical events. For this presentation, I have refined the methodology and extended the observation window to capture the evolution of fund behaviour since the start of 2023\. The findings are pretty remarkable. To give a flavour, the Abstract is copied in full at the end of this post. If you’re going to Gastech, don’t miss what promises to be an excellent session. I’ll be sharing the stage with other high-calibre speakers and moderator (see the [agenda](https://www.gastechevent.com/conferences/gastech-conference-programme/?type=Technical-Conference&programme=option%5F1718137142027&sessionid=3480&ref=energyflux.news)). I will be in Milan all week so let me know if you would like to meet up; *Energy Flux* readers have started a [discussion thread](https://exchange.energyflux.news/t/gastech-milan/519/2?ref=energyflux.news) to coordinate meetings (you can also [DM me](https://exchange.energyflux.news/u/seb%5Fkennedy/activity?ref=energyflux.news) in the forum). –Seb [![CTA Image](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/Flaming-Banner_wide.jpg)](https://www.energyflux.news/gastech25-special) Not going to Gastech? Subscribe to **Energy Flux* to get the presentation slides plus bonus commentary after the event – ****now with 50% off** 👇 [💾 Get half-price subscription 💾 ](https://www.energyflux.news/gastech25-special) --- ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/P1060560--2014_02_17-10_54_34-UTC--1-1.JPG) ## GASTECH ABSTRACT ****Emerging Gas Pricing Trends** 📅 10 Sep. 10:30 - 11:30am ## **Mapping the storage-speculation nexus:** ### Hedge fund positioning and the TTF forward curve *✍ Seb Kennedy, Founding Editor, Energy Flux* The European natural gas market — anchored by the Title Transfer Facility (TTF) — has drawn growing interest from non-physical investment funds, particularly hedge funds. This influx of capital into TTF futures has reignited concerns about the role of speculative positioning in amplifying price volatility, distorting market signals, and complicating seasonal storage economics. Progress in understanding this influence has been limited by sparse and opaque data. The weekly Commitment of Traders (CoT) report for ICE Endex TTF aggregates investment fund positions across all maturities, masking variations in behaviour along the forward curve. While EU regulators collect more granular transaction-level data, only coarse summaries are made public. This paper presents an original methodology to reverse-engineer fund positioning across the curve using CoT data in conjunction with weekly volume-weighted average prices (VWAP) for TTF contracts from January 2023 onwards. By calculating the R-squared (coefficient of determination) between weekly price moves and changes in net speculative positions, the analysis quantifies how tightly fund flows have aligned with different segments of the curve over time. A marked shift occurred in August 2024 during military escalations near the Sudzha gas transit corridor between Russia and Ukraine. As risk premia spiked, R-squared values collapsed for long-dated contracts (Oct-25, Nov-25) and surged for near-dated ones. The data suggest a repositioning by hedge funds toward summer-dated futures aligned with the EU’s gas storage refilling calendar. By late October 2024, speculative interest had become concentrated along the Dec-24 to Sep-25 strip. This crowding coincided with the final weeks of mandated refilling activity ahead of (what was at the time) the 1 November 2025 storage deadline. As summer prices rallied and the summer-winter spread inverted, some operators faced elevated procurement costs and weaker incentives to store, highlighting how tightly coupled regulatory targets and speculative positioning can become. In response, the EU moved to soften its storage mandates for 2025, citing the need for flexibility. While causality is difficult to establish, this analysis shows how rigid policy structures can create entry points for capital flows that reshape the pricing curve, intentionally or not. This study introduces a replicable framework for quantifying the behavioural imprint of speculative flows along the forward curve. It invites traders, regulators, and analysts to move beyond binary debates over “good” or “bad” speculation and instead focus on transparency, policy design, and improved use of public data like the CoT report to understand systemic effects. Ultimately, this paper advocates for greater transparency in fund positioning data and proposes a data-driven framework to pre-empt systemic price dislocations without unduly deterring market liquidity. ### Make Alaska Russian Again?! URL: https://www.energyflux.news/make-alaska-russian-again-trump-putin-ukraine-russia/ Last updated: 2025-08-17T06:32:25.000Z [Subscribe](#/portal/signup) The Trump-Putin summit in Alaska is set to be a geopolitical circus. In this episode of the **Energy Flux: On Air** podcast, I unpack some of the less-discussed issues that will colour today’s meeting. I cover: - Why some in Moscow might be eyeing Alaska’s mineral wealth - How a land-swap-for-ceasefire could reshape Ukraine’s future - The sanctions relief carrot Trump might dangle — and why I’m sceptical - How the Armenia-Azerbaijan peace deal frames today’s summit - What the Zangezur Corridor gambit tells us about real estate diplomacy - What all this could mean for LNG markets already swimming in supply There’s also a quick update at the end on what I’ve been building here at *Energy Flux:* new data tools, a members-only discussion forum, and an AI-powered daily briefing for premium subscribers. 🎧 **Listen/watch now for free** — the full episode is embedded below. — Seb **Sign up to* ***Energy Flux** *to access the audiovisual embeds, and support independent energy journalism* [Sign up for free ](#/portal/signup/free) _This post is for subscribers only._ ### Venture Global’s pyrrhic victory URL: https://www.energyflux.news/venture-globals-pyrrhic-victory-lng-shell-arbitration-dispute/ Last updated: 2025-08-13T07:01:24.000Z **For half a century, LNG deals were stitched together not just by lawyers, but by trust. Long-term supply contracts were personal as much as legal, built on the belief that when the ink dried, both sides knew what the deal *meant*. The Venture Global-Shell arbitration ruling has torn a seam in that fabric.** [Subscribe](#/portal/signup) Venture Global yesterday claimed victory in a landmark arbitration case brought against it by oil major Shell, which had sought billions of dollars in compensation over alleged breach of contract. Shell accused VG of artificially delaying the official start of commercial operations at the Calcasieu Pass LNG plant in Louisiana in order to profit from stratospheric spot prices during the extreme market volatility of 2022 following Russia’s full invasion of Ukraine. A tribunal disagreed, ruling in VG’s favour. The decision brings immediate clarity to a legal grey area that had until recently flown under the radar. But it portends greater friction for dealmaking in the high-stakes LNG business. And it could also spell trouble for Venture Global’s own long-term commercial prospects. đŸ’„ *Article stats: 1,000 words, 6-min reading time* _This post is for subscribers on the Premium tier only._ ### The boy who cried ‘bull’! URL: https://www.energyflux.news/the-boy-who-cried-bull-gas-lng-prices-market-outlook/ Last updated: 2025-08-07T09:28:02.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/DASH.png) **The European gas market has come a long way since the start of the year, when pundits were hyperventilating over the ‘dangerously low’ level of gas held in underground storage.** **Fast-forward a few months, and the winter warnings of a ‘tight summer refilling season’ have melted away like ice cream in a heatwave.** [Subscribe](#/portal/signup) Where exactly are gas markets at? The sleepy summer months offer an opportunity to take stock of slow-burn indicators. On aggregate, European storages are filling up at a steady clip and are on track to easily surpass the bloc’s newly adopted gas storage target of 83% by the 1st October to 1st December window. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/GAS-STORAGE_001.png) The phase shift in sentiment and price outlook since late winter has been remarkable. The Sep-25 TTF contract – currently the front month – has fallen by one-third since February. Jan-26 TTF is down by a fifth. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/The-future-ain---t-what-it-used-to-be_001.png) Spare a thought for European industrial consumers and non-vertically integrated utilities that must procure gas on the open market. Bombarded by scary messaging about delayed LNG start-ups and the challenge of refilling to 80% without Ukraine gas transits, there must have been a strong temptation to hedge some 2025 consumption before the first wave of correction in February. Doing so, and then watching the market implode, would have been a bitter pill to swallow. ## Sign up for đŸ’„ Energy Flux đŸ’„ Fiercely independent energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## Once bitten, twice shy Would any procurement officer or risk manager wearing the scars of the 2025 correction believe prophecies of doom ever again? False harbingers eventually lose all credibility. But what if, like the boy who cried wolf, the worst case scenario transpires after all faith in the shepherd is lost? The coming winter might test exactly this scenario. While market conditions appear benign, the *Energy Flux* **TTF Risk Model** paints a more nuanced picture. And there remains the ever-present risk of geopolitical melt-ups and supply-side calamity. This week’s subscriber-only [**Chart Deck**](https://www.energyflux.news/tag/chart-deck-2/) looks beyond the lackadaisical pulse of sun-drenched summer energy markets to identify where latent risks are being mis-priced. With the help of the **TTF Sentiment Tracker** and **TTF Risk Model**, this post takes a scalpel to the ICE Endex Commitment of Traders data. It also includes: - Oil indexation vs. spot LNG **comparative price analysis** - **Asia-Europe arbitrage** for LNG from global FOB locations - A special **interactive gallery** of regional LNG imports: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/image-1-1.png) Low-res sample. Scroll down for full version Level up your energy market insight. Get instant access with a 7-day free trial of **Energy Flux* 👇 [Subscribe ](#/portal/signup) đŸ’„*Article stats: 1,100 words, 8-min reading time, 20 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Start your mornings with Flux Briefing ☕ URL: https://www.energyflux.news/start-your-mornings-with-flux-briefing-ai-energy-analysis-discourse/ Last updated: 2026-04-28T22:54:17.000Z You can now get a daily dose of AI-powered gas and LNG market insight straight from *Energy Flux* delivered to your inbox every morning. It’s called [**Flux Briefing**](https://exchange.energyflux.news/c/flux-briefing/20?ref=energyflux.news), and it’s published exclusively in **Flux Exchange**, the *Energy Flux* discussion forum. [Subscribe](#/portal/signup) Each post is a tightly-written energy digest with a smattering of context and links to original source material for those seeking more depth. Expect short digests of curated news and concise commentary you won’t find in the regular *Energy Flux* email newsletter. ✅ **Free for all readers** ✅ **Published six mornings per week** ✅ **Delivered via email (opt-in required)** #### What is ****Flux Exchange**? — If you haven’t explored it yet, ****Flux Exchange** is the forum where the **Energy Flux* community discusses market developments. It’s powered by Discourse, an open-source discussion platform (think: a smarter version of Reddit for deep conversations). You’ll find [Flux Briefing](https://exchange.energyflux.news/c/flux-briefing/20?ref=energyflux.news) in its own dedicated space inside ****Flux Exchange**. You can ****comment**, ****reply**, and ****engage** — no subscription required. ### đŸ“© Want *Flux Briefing* in your inbox? It only takes 10 seconds: 1. **Visit the *Flux Briefing* category** 👉 [Click here to go there now](https://exchange.energyflux.news/c/flux-briefing/20?ref=energyflux.news) 2. **Click the 🔔 bell icon at the top-right of the page** 3. **Select “Watching First Post”** Done. You’ll get a single email each morning when the new post goes live. ### ⚗ Pushing the boundaries **Flux Briefing** is an experimental collaboration between *Energy Flux* and [**SentryDock**](https://www.sentrydock.com/?ref=energyflux.news), an AI-powered analyst team monitoring local, global and social news sources in real time. The content is generated by SentryDock’s exciting new AI monitoring system. It’s fast and consistent, and rapidly learning the ropes of energy journalism. (Fair warning: it might be a little rough around the edges to begin with while the system beds in.) We’re experimenting with what’s possible in content automation and market analysis. You can help improve the briefing by reading and replying to each post with your thoughts and feedback. [Take me to Flux Briefing](https://exchange.energyflux.news/c/flux-briefing/20?ref=energyflux.news) Find out more about the tech behind **Flux Briefing** here 👇 [SentryDock | Get news first with AIMonitor news in real-time with AI. Get instant alerts from local newspapers, social media, and thousands of sources before mainstream coverage. Start free today.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/apple-touch-icon.png)Get news first with AI![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/graphShare.png)](https://www.sentrydock.com/?ref=energyflux.news) ### 💭 Final thought If you’re concerned that *Energy Flux* is being overtaken by AI — don’t worry! The regular email newsletter will continue to be researched, written and edited by me (and occasional human contributors). You won’t receive Flux Briefing if you don’t explicitly opt in via the forum. So if you’re not interested in this service, you don’t need to do anything. In either case, you will continue to receive the weekly *Energy Flux* newsletter right here in your inbox. Thanks for reading. I hope you find this new addition to the platform of value. — Seb P.S. For paid subscribers, the **Chart Deck** returns on Thursday with the latest [TTF Risk Model](https://www.energyflux.news/ttf-risk-model-v2-0/) run. Need access? Sign up: [Subscribe](#/portal/signup) ### Torching value URL: https://www.energyflux.news/torching-value/ Last updated: 2025-08-01T14:10:50.000Z **Gas flaring is immune to market signals. No matter the price, the amount of gas routinely burned off at flare stacks around the world only ever seems to creep higher. Last year, gas flaring hit a fresh record despite a sustained price rally that *should* have focussed minds on curbing the practice.** [Subscribe](#/portal/signup) According to the Energy Institute Statistical Review, global flaring rose 0.8% to hit 158.8 billion cubic metres, equivalent to 3.8% of all gas produced globally in 2024. The market value of that gas is rarely scrutinised in detail – until now. Analysis by *Energy Flux* reveals the world flared off gas with a market value of **$15.7 billion** last year alone. Based on country-level price data and calorific values, this is probably the most accurate publicly-available estimation of the commercial value of flared gas in 2024 (see methodology below). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/pantheon-of-profligacy_001.png) For context, $15.7 billion is enough to rebuild the Burj Khalifa skyscraper, the world’s tallest building, *ten times over*. It is four times greater than the single biggest US government contract terminated by DOGE, the cost-cutting department once headed by Elon Musk (a $4 billion [military contract](https://doge.gov/savings?ref=energyflux.news)). And it is enough to cover the \~$11 billion cost of hosting the summer Olympics, with change to spare. ## Scandalous waste On a more serious note, the $15.7 billion figure makes gas flaring the biggest scandal that nobody is talking about. The World Bank set a goal of zero routine flaring by 2030 that but the situation is so bad it is already “decisively out of reach”, according to the [Environmental Defense Fund](https://library.edf.org/AssetLink/82juegtwujvxo0o06e14d2dcnm1a566f.pdf?ref=energyflux.news). But if it were to happen, the direct financial savings alone would be enough to tackle some of the world’s most pressing public health, education, or environmental challenges. For example, $15.7 billion is enough to fund the entire [UN Environment Programme](https://www.unep.org/resources/programme-work-and-budget?ref=energyflux.news) for 18 years. It could bankroll Universal Basic Income of $1 per day for 43 million of the world’s poorest people. Or it could be used to feed the world’s hungriest 45 million people [twice over](https://www.wfp.org/news/wfp-warns-countdown-catastrophe-acute-hunger-reaches-new-peak?ref=energyflux.news), with surplus budget for logistics and salaries. Rediverting the market value of all captured flare gas to an individual project or initiative is of course not possible (it would remain in-country). But the comparison serves to make a point: gas flaring is out of control, and the countries indulging in this level of profligacy tend to be the ones that can least afford it. Level up your market insight. Subscribe to **Energy Flux* and support fiercely independent market analysis [Subscribe ](https://www.energyflux.news/#/portal/subscribe) 💡 Interactive content (in browser, click to expand): #### ****Market value of flare gas** – **methodology** The flared gas value figure was derived by multiplying each country’s flaring volumes (in Bcm) by the gross calorific value of gas in the local gas system, to arrive at an energy content value (in MMBtu) for gas flared. For example, Qatar has high heating value (HHV) gas of >40 trillion Btu per Bcm, while Russian gas has a lower energy content of approximately 34-36 TBtu per Bcm. The energy content of each country’s flared gas was then multiplied by the average 2024 wholesale price of gas in that market (in $/MMBtu). Price data was kindly provided by the International Gas Union upon request, from its Wholesale Gas Price Survey 2025. The use of country-level TBtu/Bcm conversion factors (instead of flat global averages), and actual wholesale prices from the IGU (instead of regional proxies), means this valuation likely has a much tighter error band than any global agency estimate. This makes it much lower than other estimates. The World Bank gave a rough estimate of $63 billion calculated using European Union import gas prices in 2024, which are much higher than markets in North America or the Middle East, where most flaring occurs. Capterio estimates flare gas value at $31 billion annually based on a flat price of $5 per MMBtu – again, higher than real market prices in many of the global flaring hotspots. That said, it is a probably conservative estimate: this approach assumes that flared gas, if captured and monetised, would have been sold at the local market rate. However, in gas exporting countries – which account for the vast majority of flaring – those molecules saved from the flare stack might have been shipped to higher-value markets, where they would have attracted a premium. ## Valuing energy waste The worst culprits for gas flaring are well documented. The World Bank’s [Global Gas Flaring Data](https://www.worldbank.org/en/programs/gasflaringreduction/global-flaring-data?ref=energyflux.news) consistently ranks Russia, Iran, Iraq, the United States and Venezuela as the top five biggest gas flaring countries by volume. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/World-Bank-gas-flaring.PNG) Chart: World Bank Capterio’s analysis of [flaring intensity](https://flareintel.com/insights/quick-take-unpicking-the-alarming-increase-in-global-gas-flaring?ref=energyflux.news) – flaring per unit of oil production – puts Venezuela, Algeria, Libya and Iran squarely in the naughty corner. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/08/Flaring-intensity-Capterio-1024x576.webp) Chart: Capterio However, focussing on *market value* brings a new lens to the issue of wasted gas. Most flaring is done by national oil companies in countries that, shall we say, do not tend to prioritise ESG matters. But *every* government in the world cares about money, finance, resource efficiency, and fiscal deficits. This **Deep Dive** reveals which countries are flaring off the most *value* in their domestic energy systems, and – in another first – how much money they are wasting via flaring *on a per-capita basis*. The findings bring home the sheer egregiousness of the oil and gas industry’s collective inability to tame its own recklessness, and the potentially huge financial benefits of tackling this long-running problem. [Subscribe](#/portal/signup) đŸ’„*Article stats: 1,900 words, 11-minute read, 5 *interactive* charts, graphs and maps* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Geopolitical theatre (part 2) URL: https://www.energyflux.news/geopolitical-theatre-part-2/ Last updated: 2025-07-31T15:31:22.000Z **The vaunted EU-US trade deal, signed by US President Donald Trump and his EU Commission counterpart Ursula von der Leyen, is not a diplomatic breakthrough. Anchored on fantastical LNG purchase commitments of $750 billion over three years, the deal is a shared delusion: an empty gesture signed by two parties that have no intention or ability to deliver what they’ve promised.** [Subscribe](#/portal/signup) At Trump’s Scottish golf course on Sunday, Von der Leyen committed the EU to buy $250 billion per year of American energy (mostly LNG, plus oil, coal, refined products and possibly nuclear fuel) over three years. No matter how you cut it, this is unattainable and both sides must know it. I [ran the numbers back in April](https://www.energyflux.news/chaos-theory/), when Trump declared the EU must buy $350 billion of US energy to bridge the trade gap and avoid sweeping tariffs. Effectively, he was demanding a quintupling of Transatlantic energy trade. The best I could do at the time was to describe this lunacy as “wilful ignorance towards the real-world constraints of market economics” that is “both mesmerising and terrifying” (glad to see that line picked up by [The Telegraph](https://www.telegraph.co.uk/business/2025/04/10/trump-drill-baby-drill-boom-already-risks-imploding/?ref=energyflux.news)). The US Gulf Coast export infrastructure constraints alone are insurmountable, not to mention upstream shale depletion rates, financial bottlenecks, and the cannibalistic effect of falling market prices necessitating an even greater surge in output to offset the lower value of EU imports. Never mind the fact that market forces, not politicians, determine where US LNG flows. Or the inconvenience of classifying what an ‘EU company’ really is, when it operates a globally-traded portfolio that is constantly optimising across basins. Now that the figure has ballooned to $750 billion and all the same questions remain unanswered, even conservative outlets such as [Reuters](https://www.reuters.com/business/energy/eus-pledge-250-billion-us-energy-imports-is-delusional-2025-07-28/?ref=energyflux.news) and price reporting agencies like [Argus](https://www.argusmedia.com/en/news-and-insights/latest-market-news/2714941-us-eu-deal-sets-impossible-energy-sales-goal?ref=energyflux.news) are calling the deal out as ‘delusional’ and ‘impossible’. Applying serious analytical rigour to this nonsense feels like dignifying it (although if you need some hard figures, the indefatigable Anne-Sophie Corbeau from CGEP [has got you covered](https://www.linkedin.com/posts/anne-sophie-corbeau-8a758a4%5Feu-europeancommission-energy-activity-7355491110867148801-UTQN?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop&rcm=ACoAAAJvzgwBvCHdWBI1dN%5F0QsOZ96ew1O9XDKQ)). For me, the real value lies in understanding the motivations behind it. Why set yourself up for failure in this way? Let’s take a closer look. Get the unvarnished truth. Subscribe to **Energy Flux* and support fiercely independent market analysis [Subscribe ](https://www.energyflux.news/#/portal/subscribe) On the US side, this is just another day of golf for Trump: dream up some big, gaudy numbers to generate headlines, rally the domestic base and US energy stocks, proclaim economic dominance, etc. It’s a re-run of his 2021 China trade farce: inflate the target, declare victory, and then forget all about it before the blame game starts. The Phase 1 trade deal in December 2019 envisaged China buying more than $50 billion of extra American coal, oil and LNG by the end of 2021\. Actual imports fell well short of that, but by then the world had moved on. The same fate awaits the EU-US trade deal. For the EU, this is strategic capitulation. European officials know they can’t physically import the volumes they’ve pledged, and nor can they force EU companies to do so. But they’re playing along, desperate to mollify a volatile White House and avoid reigniting market-melting tariff threats on Truth Social. They’ll stretch timelines, pad numbers by redefining trade flows, and issue press releases about ‘record US-EU energy cooperation’ even as volumes fall short. This is how the EU handles unachievable climate targets too: slow failure with good PR. By holding itself hostage to an impossible pledge, Brussels gets to signal transatlantic unity and energy security without having to actually deliver either. The trouble is, it only kicks the can down the road. Maybe the calculus in Brussels is: ‘Let’s play along, by the time we’re caught short Trump will be too busy thinking about succession and retirement to notice.’ Meanwhile, US LNG exporters are happy to fuel the illusion. The lie [pumps their share prices](https://www.nbcwashington.com/news/business/money-report/lng-stocks-jump-after-european-union-agrees-to-massive-u-s-energy-purchases/3965777/?ref=energyflux.news) and supports expansion plans. But for European industrials and utilities, stuck with the impossible task of reconciling supply constraints, price risk, and climate goals, this ‘deal’ stinks. If there is ever any attempt at accountability, they will be the scapegoats. Geopolitics has always been performative, but these days it is [pure theatre](https://www.energyflux.news/geopolitical-theatre/). Gestures and optics are worth more than facts or results. Reality is at best an afterthought, and much of the mainstream media is too distracted or credulous to call out this pointless game of charades. Everyone involved knows this deal is structurally unworkable, yet they signed it anyway. There’s a word for that: cynicism, pure and simple. That cynicism distorts price signals, scrambles expectations, and leaves the market groping for substance beneath political spectacle. **Seb Kennedy | Energy Flux | 29 July 2025** [Start the discussion on Flux Exchange](https://exchange.energyflux.news/?ref=energyflux.news) ### In search of signal URL: https://www.energyflux.news/ttf-eu-gas-natgas-risk-model-in-search-of-signal/ Last updated: 2025-07-26T03:19:39.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/07/1-DASH.png) **With the Israel-Iran geopolitical drama** [**fading**](https://www.energyflux.news/geopolitical-theatre/) **into a summer haze, the European natural gas market is stuck in suspended animation. Talking heads are casting around for a fresh narrative to define near-term price direction.** [Subscribe](#/portal/signup) As if to illustrate the point, Equinor CEO Anders Opedal [popped up](https://www.reuters.com/sustainability/climate-energy/equinor-eyes-tighter-gas-market-lower-oil-prices-hit-q2-profit-2025-07-23/?ref=energyflux.news) this week to warn of “a more tight market” this autumn and winter, citing (of course) low EU gas storage levels. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/07/2-Holiday-mode_001.png) Yes, stocks are lower than they were this time last year (66% full versus 84% in July 2024). But storage is not the only protagonist in the unfolding Q3-Q4 gas market story. There are other fresher, more dynamic characters lurking in the wings. Fortunately, the *Energy Flux* **TTF Risk Model** is here to shed some light on an otherwise opaque late summer setup. This week’s **Chart Deck** leans into the [recently revamped](https://www.energyflux.news/ttf-risk-model-v2-0/) model’s output to extract signal from the currently dominant sideways momentum. **If you’ve read all your holiday literature and fancy diving into a technical assessment of TTF futures positioning by the swimming pool, this post is for you. Warning: it’s pretty engrossing — don’t let your ice cream melt*🍩 [Subscribe ](#/portal/signup) *ARTICLE STATS: 1,500 words, 9-min reading time, 9 charts & graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Introducing: Flux Exchange URL: https://www.energyflux.news/introducing-flux-exchange/ Last updated: 2026-06-01T23:28:10.000Z A private members forum for honest debate & genuine market insights _This post is for subscribers only._ ### TTF Risk Model v2.0 URL: https://www.energyflux.news/ttf-risk-model-v2-0/ Last updated: 2025-07-20T09:55:36.000Z Over the past few weeks, I’ve been refining a methodology to quantify how risk is being priced into European gas markets. The new **TTF Risk Model** has evolved substantially, and will be incorporated into future editions of the [Chart Deck](https://www.energyflux.news/tag/chart-deck/). This post explains the advancements and how to read the new scoring system. At the end, it unveils the first model V2.0 run and what the output tells us about the current market structure and risk pricing at the dawn of an unprecedented global LNG glut. [Subscribe](#/portal/signup) The original version of the TTF Risk Model tracked the relationship between weekly changes in European gas prices and a custom-built ‘risk score’ derived from futures curve structure and trader positioning data. That version picked up some useful signals, but it was noisy and prone to overreacting to short-term market moves (as detailed previously, see [here](https://www.energyflux.news/whiplash/) and [here](https://www.energyflux.news/geopolitical-theatre/)). The updated version takes a more stable and structured approach. The TTF price data is now smoothed using a 12-week moving average to strip out a lot of the market’s week-to-week volatility. This helps to surface broader shifts in price regime — the kind of movement that’s more likely to matter to physical buyers, risk managers, and longer-horizon traders. ### How the score works To recap, the risk score is built from four components (each of which is weighted to optimise for maximum correlation with TTF price movements): - **Curve Slope:** This measures the shape of the TTF forward curve — whether it’s upward sloping (contango) or downward sloping (backwardation). A steeper backwardated curve suggests tight near-term supply and strong pricing risk. This input is weighted positively (+0.6), meaning it pushes the score higher when the market structure is tight. - **Investment Fund positioning (IF):** This captures how heavily hedge funds are positioned in the market relative to historic norms. When funds are strongly net long, the model reads that as a potential sign of complacency towards correction, and gives it a heavy negative weight (–0.9). In other words, crowded long positioning is seen as increasing downside risk. - **Commercial hedging (CU\_RR):** This looks at the risk-reducing activity of commercial players, such as producers and large end users. When these actors are actively hedging more than usual, it signals they are nervous about future price moves. The model gives this a negative weight (–0.6), again treating it as a warning sign. - **Commercial speculation (CU\_spec):** This captures more speculative positioning by commercial traders, typically proprietary desks or trade houses taking directional bets. A negative weight (–0.3) means that when this activity rises above normal, the model interprets it as a signal of increasing market confidence or risk appetite — which can coincide with underpriced downside risk. Together, these four ingredients form a composite score that reflects how the market is collectively pricing, hedging, and reacting to perceived risk: > *Risk Score = Curve Slope + IF + CU\_RR + CU\_spec* ### How to read the results When we compare this risk score against the 12-week moving average of weekly TTF price changes, the correlation is strong — with an R-squared value of 0.51\. That means the model explains more than half (51%) of the variation in smoothed weekly price changes. What’s important here isn’t just the statistics, but the signal: this model appears to reflect real shifts in market behaviour. When the score rises, it typically signals a tightening market with relatively little complacency — a regime that tends to support prices. When the score falls into negative territory, it tends to reflect risk-on sentiment getting overextended, positioning crowding to one side, or commercial actors trying to get ahead of expected weakness. In these moments, the market may be under-pricing downside risk. The aim isn’t to build a crystal ball; rather, it’s to give market participants a clearer sense of where risk is hiding in the price. By combining curve shape and trader behaviour into a single, interpretable metric, the model helps cut through the noise. It offers a directional indicator of risk pricing — not in the sense of forecasting day-to-day moves, but in identifying when sentiment, positioning and structure are aligning (or diverging) in ways that matter. More work is underway to validate its predictive performance and explore how it behaves under different market regimes. But even in its current form, this new version of the TTF Risk Model is a practical tool for making sense of complex market dynamics, and for spotting when things may not be as stable as they seem. ### Hedge funds vs. the Model: *a signal within the signal* There’s an interesting wrinkle in the data worth highlighting. When we compare the full TTF Risk Model Score against actual TTF price changes, we get a solid correlation: RÂČ = 0.51 when using 12-week moving average with no lag. To test its ability to predict price action, I conducted lag testing: regression analysis of Risk Score against *future* TTF price movements printed one, two, and three weeks ahead. As the chart below shows, the R-squared value drops off somewhat the further out you look. That suggests the model does a good job of capturing how risk is priced in the market at any given time, while retaining *some* predictive power. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/07/Lag-testing_001.png) But when we isolate just the hedge fund component of the model (i.e. the 12w MA of weekly changes in net positions held by investment funds), something else emerges. The hedge fund signal holds up even when we test it against future TTF price changes. One week forward, the RÂČ is still strong at 0.43, and it remains above 0.4 even three weeks out. That’s notable. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/07/Funds-still-dominate_001.png) What this tells us is that hedge fund positioning alone may contain some forward-looking insight. These traders appear to move ahead of the market at times, positioning for price shifts that haven’t yet occurred (whether this is because hedge fund’s big bets move the market or anticipate it, is an open question). By contrast, the full risk score — which blends hedge fund data with other signals like futures curve structure and commercial hedging — has the strongest correlation with *current* market pricing, but fades more quickly as a forward indicator. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/07/Lag---benchmark-table.png) In simple terms: > The **Risk Model** is best at telling us *where we are*. > The **hedge fund signal** may offer clues about *where we’re going*. This distinction is important. It suggests that combining the two — using the model for regime context and hedge fund activity for directional cues — could be more powerful than using either alone. ### So, what does it tell us? The updated TTF Risk Model, now using rolling 12-week averages to smooth out noise, is beginning to reveal clear signals of underlying regime shifts in European gas markets. As shown in the chart below, the model doesn’t just track sentiment — it appears to illuminate structural changes in price direction with notable consistency... **The* ***TTF Risk Model** *is a premium feature that will be incorporated into future editions of the Chart Deck. It will be accessible to readers on the* [**Chart Deck*](https://www.energyflux.news/#/portal/signup/684ab0831045ff0001e3f408/yearly) *and* [**Premium*](https://www.energyflux.news/#/portal/signup/680c11aef2b05000095511de/yearly) *subscription tiers only.* **If you’re not already a subscriber, why not avail yourself of the 7-day free trial to get a feel for the premium Energy Flux offering?* [Start 7-day free trial ](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Pain threshold URL: https://www.energyflux.news/asia-lng-price-pain-threshold-energy-natural-gas/ Last updated: 2025-07-03T02:49:38.000Z **Everybody loves a bargain. But how cheap is *cheap enough* to lure Asian LNG buyers back to the market? And at what point does downward demand flexibility turn into demand destruction?** As Asian LNG demand growth falters in the face of a cresting global LNG supply wave, spot prices are softening. But will further declines spark the demand response that producers are counting on? In a new data investigation, *Energy Flux* pinpoints where Asia’s pain threshold really lies and what it means for global energy markets on the cusp of profound supply-side transformation. Using new analysis of Kpler LNG import data segmented by trade type across nine key Asian demand centres, this special reader-requested [Deep Dive](https://www.energyflux.news/tag/deep-dive/) maps how different countries respond to price signals. The result is a clear picture of where demand rises, where it collapses, and how that tipping point shifts between markets, socioeconomic indicators, and import profiles. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/07/Pivot-point---the-Pan-Asia-sensitivity-score_001.png) The top line is this: while lower prices do spark a response, the region’s appetite for a bargain has clear limits. Some countries jump at mid-range spot deals; others barely flinch, no matter how cheap the gas. The picture is *far too nuanced* to be captured in a single price point. **Members on the* ***Premium** *and* ***Deep Dive** *tiers are already reading this analysis. Join them: subscribe or upgrade now for full access.* [Start 7-day free trial ](#/portal/signup) This investigation offers deep commercial insight: fresh metrics and fresh knowledge, derived from rich historical data spanning from 2008 right up to the present day. In this post, readers will: 💡 **Explore* pan-Asian LNG demand price sensitivity and relative scores* 💡 **Compare* country-by-country demand responsiveness at varying price bands* 💡 **See the heatmaps*, histograms and price thresholds that reveal who blinks first when prices move* 💡 **Get the whole picture*: full methodology, full transparency, and fresh insight into Asia’s LNG future* In the full piece: discover who’s most responsive, the markets where price no longer matters, and what these findings mean for the glut ahead. Unlock the full charts, country-by-country analysis, and commercial takeaways with a subscription. đŸ’„ *Article stats: 3,000 words, 20-min reading time, 13 charts & graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Geopolitical theatre URL: https://www.energyflux.news/geopolitical-theatre/ Last updated: 2025-06-26T09:57:38.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/DASH-1.png) **They say that war is conducted in a theatre of operations. The events of the last fortnight gave that maxim new meaning.** The Middle East conflict reached a dramatic crescendo on Monday in what can only be described as a coded performance of missile diplomacy. After Sunday’s US bombardment of (what many believe to be empty) Iranian nuclear sites, the world watched transfixed as Iran mulled its response. Tehran promised fire and brimstone. On Monday, projectiles rained down on an American airbase in Qatar and another in Iraq. But neither caused any real damage. This ‘retaliation’ was in fact a face-saving gesture intended for a domestic audience in Tehran. The real message telegraphed to Washington: *we want to de-escalate, but must be seen to be taking a hard line.* Eagle-eyed traders saw straight through it. Strait of Hormuz closure risk had always been slight at best, they calculated, so if Iran was subtly signalling for a truce then Hormuz is open for business. With no rationale to support the inflated risk premium, Tuesday’s sell-off was spectacular. Dutch TTF plunged 10% and JKM, the Asian LNG spot benchmark followed suit. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/2025-06-24---TTF-intraday.PNG) Chart by Spark Commodities The correction was so deep that front-month prices fell *below* where they were prior to Israel’s surprise aerial assault on Iran on 13 June – and, so far, have stayed there. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/Fat-lady_001.png) Level up your market insight. Subscribe to **Energy Flux* and support fiercely independent market analysis [Subscribe ](#/portal/signup) This week’s **EU LNG Chart Deck** runs the rule over: ✅ The geopolitical ‘bull trap’ that turned investment funds into bag holders ✅ How dramatic price action has shifted global LNG trade dynamics ✅ The outlook for winter & next summer in light of the EU’s new gas storage proposal 💡 **This post also contains a technical update on the* ***TTF Risk Model** *. The first run generated a surprising amount of interest from subscribers, and I have incorporated suggested improvements into the second iteration. The objective is to build a robust risk model with predictive power for TTF prices. Help me to sharpen this tool!* If you want to go deep into fast-moving global gas market dynamics, this post is for you. [Subscribe](#/portal/signup) đŸ’„ *Article stats: 1,600 words, 10-min reading time, 16 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Whiplash! URL: https://www.energyflux.news/whiplash/ Last updated: 2025-06-20T07:54:54.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/DASH.png) **As the Israel-Iran conflict intensifies, geopolitics is firmly back in the driving seat of natural gas markets. The Middle East crisis has relegated macroeconomic concerns to the back seat.** The stakes are high and visibility is low. Iran might capitulate tomorrow, or the US might enter the fray in full force. TTF has soared 20% in 10 days, reflecting the rising risk of supply-side disruptions. Despite flagging Asian demand for LNG, JKM has made similar moves to extend the Asian spot premium over Europe. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/Asia-call-of-war_001-1.png) The question on everyone’s lips: are war risks fully reflected in European gas prices? This week’ [EU LNG Chart Deck](https://www.energyflux.news/tag/chart-deck/) seeks to shed some light on this matter, with the aid of a new data model. The **TTF risk model** quantifies the deviation in speculative sentiment and curve slopes versus historical norms, to gauge the potential for over- or under-pricing of risk in today’s febrile market conditions. **Level up your market insight. Subscribe to* ***Energy Flux** **and support fiercely independent market analysis – now with a free trial* [Get instant access ](https://www.energyflux.news/#/portal/subscribe) This post also runs the rule over: 📈 Shifting TTF curve structure and calendar spreads 🌎 Inter-basin arbitrage signals for global LNG trade flows đŸŠ„ Investment funds’ surprisingly cautious repositioning ❓ Whether this geopolitical shock marks a structural departure from the prevailing price regime Without further ado, let’s get stuck in. *Article stats: 1,800 words, 11-min reading time, 11 charts & graphs* [Start 7-day free trial](#/portal/signup) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### New! Tiered subscriptions + 7-day free trial for all plans URL: https://www.energyflux.news/new-tiered-subscriptions-7-day-free-trial-for-all-plans/ Last updated: 2025-10-31T15:48:18.000Z ***Energy Flux* just became more flexible — and more accessible.** You can now choose from three distinct subscription tiers, each tailored to how you follow the gas and LNG market and priced to suit your needs: 🧠 [**Deep Dives**](https://www.energyflux.news/tag/deep-dive/) – Get interviews, Q&As, long-form features and deep-dive data investigations. Essential reading for understanding the *why*, not just the *what*. 📊 [**Chart Deck**](https://www.energyflux.news/tag/chart-deck/) – Access the EU LNG Chart Deck: a visual digest of gas benchmark price action, LNG spreads, TTF hedge fund flows and other market signals. Pure signal, zero noise. đŸ”„ **Premium** – Get the full package: everything in Deep Dives *and* Chart Deck **plus:** - [*Hot Takes & Breaking News*](https://www.energyflux.news/tag/hot-takes/) *– rapid-fire reflections and big scoops on market-moving events* - [*Full archive*](https://www.energyflux.news/page/2/) *– access hundreds of articles mapping the twists and turns of the gas market since 2020* All plans now come with a **7-day free trial**, so you can explore the content risk-free before committing. Pick the plan that suits your needs and join the global cohort of traders, analysts, policymakers and investors who rely on *Energy Flux* for a fiercely independent take on these chaotic markets: [View Plans & Start Free Trial](#/portal/account/plans) Please note: I am experimenting with the free trial feature to gauge interest and conversion rates. I can’t guarantee it will remain available forever. This is a rare chance to get expert market insight on your terms. Don’t miss it. — Seb Kennedy Founding Editor, *Energy Flux* [Subscribe](#/portal/signup) ### The view from Baku URL: https://www.energyflux.news/baku-energy-forum-view-azerbaijan-natural-gas-aliyev/ Last updated: 2025-07-20T09:54:58.000Z **I departed Azerbaijan six days before neighbouring Iran was struck by the first volley of Israeli missiles, and the world is understandably fixated on this unfolding crisis.** With the Middle East teetering once again on the brink of all-out regional war, Azerbaijan stands out as a beacon of (relative) stability. Azerbaijan’s flagship energy event – Baku Energy Week – celebrated its 30th birthday just days before Israel and Iran began raining down misery upon each other. The contrast could not be more stark. The highlight of the week was Baku Energy Forum: two days of politicos and executives discussing high-level geopolitical, strategic and commercial imperatives for Europe and the South Caucasus region. The forum is not the easiest reporting assignment. But that is exactly why it is worth the effort. Not many journalists attend, so the best stories tend to go unreported. The biggest scoop I uncovered was last week’s news that Ukraine is again looking seriously at [developing its shale gas resource](https://www.energyflux.news/scoop-ukraine-fracking-freedom-shale-gas-natgas-europe-russia-war-energy/) (nice to see the story picked up by [the Telegraph newspaper](https://www.linkedin.com/feed/update/urn:li:activity:7338090986524340224/?ref=energyflux.news)). Today, I am excited to publish a double-whammy of original content: - [**Exclusive Q&A**](https://www.energyflux.news/azerbaijan-socar-our-customers-are-behind-glass-wall-gas-energy-vitaliy-baylarbayov-seb-kennedy-interview/)with SOCAR (opens in new window) - **Special multimedia report** from Baku Energy Forum (below) --- ## đŸ’„ EXCLUSIVE: SOCAR Q&A I had an unforgettable one-hour sit-down with **Vitaliy Baylarbayov**, a high-ranking executive at Azerbaijan’s state oil and gas company SOCAR. Baylarbayov is surprisingly outspoken for a career oil man. And with three decades of industry experience, he has played a role in Azerbaijan’s transformation from post-Soviet backwater to regional oil-fuelled powerhouse. I don’t often publish verbatim Q&As but made an exception because the conversation was so candid, it felt like the only way to do it justice. And honestly, it is quite rare to get quotes with this level of commercial insight signed off from the press office of a major NOC. Check out the full interview here 👇 [SOCAR: ‘Our customers are behind a glass wall’EXCLUSIVE: Vitaliy Baylarbayov talks TTF, tariffs, hydrogen and more
![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/logo-white-background-1000-square-4.png)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/IMG_4307-1.jpg)](https://www.energyflux.news/azerbaijan-socar-our-customers-are-behind-glass-wall-gas-energy-vitaliy-baylarbayov-seb-kennedy-interview/) **Energy Flux* is 100% funded by subscriptions. None of this coverage would be possible without paying readers. If you value independent ad-free energy journalism, please consider signing up. Even better, why not expense it to your employer? [Subscribe ](#/portal/signup) --- ## đŸ’„ **Special multimedia report** I bought a new GoPro to document my planned trip to Oil Rocks, but sadly this excursion was cancelled due to high winds that prevented vessel transfers to Caspian oil platforms all week (very disappointing). Silver lining: the change of plan gave me more time to put the new kit to good use at the conference. The result is today’s post: a **special multimedia report** from Baku Energy Week that tells Azerbaijan’s energy story in 2025 from a first-person perspective. It includes more than half an hour of original audiovisual material, including: đŸ—Łïž **4-minute highlights** of President Ilham Aliyev’s (largely unreported) opening remarks **đŸ“č 6-minute VLOG summary** of the main talking points from Day 1 (energy ministerial) **đŸŽ„ 7-minute VLOG summary** of Day 2 (commercial & regulatory) **đŸŽ™ïž 5-minute audio interview** with Moldova’s energy secretary about the Trans-Balkan Pipeline and Vertical Corridor **đŸ“ș 20-minute face-to-face** with Azerbaijan’s deputy energy minister to discuss the Black Sea Interconnector between Georgia and Romania đŸ’„ *Article stats: 2,600 words, 17-min reading time, 5 video reels (+40 mins)* **This post is definitely best viewed online* [Read in broswer ](https://www.energyflux.news/baku-energy-forum-view-azerbaijan-natural-gas-aliyev) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/GP010024-1-1.JPG) ## The Caspian conundrum Getting under the skin of Baku Energy Week ## **Day 1:** Politics forever Baku Energy Forum was all about renewed momentum and investment in Caspian oil and gas upstream resources that, as so many delegates slavishly repeated, Europe desperately needs. That was the vibe from day one, when Azerbaijan’s President Ilham Aliyev kicked off proceedings with a not-so-sly jab at the Iberian blackout: Get the full picture. Subscribe to **Energy Flux* for unrivalled regional geopolitical energy insights [Subscribe ](#/portal/signup) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Don’t forget the macro! URL: https://www.energyflux.news/dont-forget-the-macro-energy-market-israel-iran-war-economy-fundamentals-oil-gas/ Last updated: 2025-06-15T12:33:00.000Z **Oil prices leapt 6% when news broke that US was evacuating non-essential personnel from Middle East deployments due to rising Israel-Iran tensions. Nobody knew what would come next, but markets were already pricing in the worst-case scenario.** While analysts are traders were still debating whether this was the usual sabre-rattling, the next day, on Friday 13th June, Israel launched Operation Rising Lion against Iran. Oil prices jumped another 8%. In Europe, [TTF natural gas prices](https://www.ice.com/products/27996665/Dutch-TTF-Gas-Futures/data?marketId=5927115&span=1&ref=energyflux.news) gained 5% to close Friday’s session at €37.89/MWh, and are up 9% since Tuesday. As I write this article, Brent is nearing $75 and WTI is at $73\. It is a weekend. The billion-dollar question is, what comes next? $100 oil? €50+ TTF? Everybody is asking, will Iran shut down the Strait of Hormuz? Will tit-for-tat air strikes on energy installations significantly disrupt regional oil and gas flows? The coming days will clarify those questions. In the meantime, the bottom-line is this: without a geopolitical conflict, higher energy prices remain a function of higher demand and a strong macro-economic environment. The following analysis shows that we don’t have either of these. đŸ’„ *Article stats: 1,600 words, 12-min reading time, 6 charts & graphs* Level up your market insight. Subscribe to **Energy Flux* and support fiercely independent market analysis [Subscribe ](https://www.energyflux.news/#/portal/subscribe) ## The fundamental view Let’s start with oil, the commodity most closely correlated to geopolitical conflicts. Here are where the fundamentals stand right now. The International Energy Agency (IEA) reports a 1.2 billion barrels of emergency stock available which, at current oil demand, would be enough to cover 15 days of global demand. OPEC+, even after the increased production levels, still have a 3 million barrels per day (mbpd) of spare capacity amongst them. This is almost the same as Iran’s current oil production of 3.3 mbpd. In terms of product buildups, we have a 1.5 mbpd increase in gasoline stocks. Middle distillates saw an increase of 4.2 mbpd while total product supplied rose by 19 mbpd week ending 6 June. Another important metric to look at is oil supply, and there is no shortage of it. Non-OPEC supply is still holding up strong. Brazil is expected to add 460,000 bpd. The IEA’s May oil market report shows that global supply will increase by 1.6 mbpd in 2025 and 970,000 bpd in 2026\. Non-OPEC producers will provide 1.3 mbpd of additional barrels in 2025 and 820,000 bpd next year. By contrast, oil demand outlook looks shaky. The agency sees a 650,000 of growth for rest of the year. The US Energy Information Administration (EIA) also echoes this sentiment. ![A chart from the IEA's Short-Term Energy Outlook depicting slowing global oil demand growth out to 2026](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/EIA-chart.png) **Chart: EIA STEO* ## Macro miasma Now let’s look at the global economy and macro-indicators. For this we can turn towards the recently released Global Economic Prospects report by World Bank that shows that growth will reduce *in 70% of all economies.* This is driving structural weakness across all commodity and energy segments. ![A chart from the World Bank's Global Economic Prospects showing declining commodity prices and forecasts out to 2026](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/Global-Economic-Prospects-Report-chart-1.PNG) Chart: World Bank > *“Growth in all EMDE regions is facing considerable headwinds amid a notable deterioration in the external environment, resulting in weaker growth projections this year relative to pre-pandemic trends and previous forecasts.” – World Bank* When we look at the World Bank’s revisions to its global projections of regional growth the chart below reinforces the slowing outlook. ![A chart from the World Bank's Global Economic Prospects showing declining global productivity and growth forecasts across all regions](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/Global-Economic-Prospects-Report-chart-2.PNG) Chart: World Bank ## Hormuz: Red Herring? Every analyst under the sun is speculating over Iran’s threats to close the Strait of Hormuz. Some shipping companies are avoiding this critical artery for Persian Gulf oil exports and the Red Sea due to the unravelling security situation, but many are not. Alternative routes offer a degree of flexibility. Saudi Arabia can utilise the [East-West pipeline (Petroline)](https://petroline.com/?ref=energyflux.news), which can carry 5 mbpd from the east to the western port of Yanbu on the Red Sea. The UAE can access the [Habshan-Fujairah pipeline](https://www.gem.wiki/Bab-Habshan%E2%80%93Fujairah%5FOil%5FPipeline?ref=energyflux.news), which can transport 1.8 mbpd. [Subscribe](#/portal/signup) But it is important to note that these capacities account for less than half of the traffic via Hormuz. The complete closure of Strait of Hormuz seems to work best for Tehran as an empty threat. It would not be feasible for Iran to halt its own oil exports because it needs the funds, and Tehran is loathe to upset China – its largest buyer – at a moment when it desperately needs allies. In the unlikely event of a Strait closure, the US and its allies can deploy an armed convoying system to safeguard tanker passage, as suggested by independent analyst [John Kemp](https://jkempenergy.com/2025/06/13/israels-attack-on-irans-nuclear-and-military-installations/?ref=energyflux.news). ## Gas stock build, demand doldrums In natural gas, markets were quick to price in a Hormuz premium as Israeli missiles began raining down on Iran, as more than one-fifth of global LNG trade flows through this pinch-point. Let’s look at the fundamentals. European gas inventories stand at 52% compared to 62% this time last year, and refilling puts a floor under prices. But US stocks are building fast too, suggesting no lack of feed gas for liquefaction and export from US Gulf Coast LNG plants. EU industrial gas demand – which is most exposed to macroeconomics – shows no signs of recovering back to the 2019-21 trend. [According to Bruegel](https://www.bruegel.org/dataset/european-natural-gas-demand-tracker?ref=energyflux.news), the structural decrease in EU industrial gas usage that started in 2022 has persisted to this day. ![A chart showing monthly EU industrial gas demand in 2025 is lower compared to recent years and the historic average 2019-21](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/EU-industry-gas-demand-Bruegel-1.PNG) Chart: Bruegel ## EU industrial decline It is important to look at what is happening in Germany – the EU’s once-mighty industrial powerhouse. German gas demand remains sharply lower than the 2019-21 average with sharpest declines in early 2023 and 2024\. Rising costs, declining automotive industry and weak global demand have all contributed to this decline. ![A Bruegel chart showing German gas demand remains sharply lower than the 2019-21 average](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/Bruegel-chart-Germany.png) Chart: Bruegel Wider economic indicators strike a similar trend. [Energy intensive manufacturing](https://cepr.org/voxeu/columns/recent-weakness-german-manufacturing-sector?ref=energyflux.news) has been under pressure in Europe for the last 2-3 years, and German output has remained below the Euro area average since those crisis years. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/Energy-intensive-chart.png) Chart: Eurostat Germany’s industrial production is [down by 1.4%](https://www.bloomberg.com/news/articles/2025-06-06/germany-s-industrial-production-and-exports-declined-in-april?ref=energyflux.news#:~:text=German%20industrial%20production%20fell%201.4,%25%2C%20exceeding%20economists'%20predictions.&text=Despite%20a%20strong%20start%20to,ba) on a month-on-month basis. Eurozone PPI was [down 2.2% as well](https://ec.europa.eu/eurostat/web/products-euro-indicators/w/4-05062025-ap?ref=energyflux.news). In the automotive industry, car registrations in Italy, Germany and France are down 19.2%, 4.2% and 9.8% in the first week of June, respectively. The Eurozone’s consumer inflation expectation in May[ fell from 29.4 to 23.6](https://www.investing.com/economic-calendar/consumer-inflation-expectation-920?ref=energyflux.news). As per the GEP report by World Bank, Euro area GDP growth has been revised down to 0.7% in 2025 and 0.8% in 2026 – a halving in the economic outlook since January. **Energy Flux is 100% supported by paid subscriptions. If you value ad-free energy journalism and independent analysis, please consider upgrading. Often this can be expensed to your employer.* [Upgrade ](#/portal/account/plans) ## The shock of war Markets will understandably fixate on fast-moving Middle East events that have disrupted or damaged energy infrastructure in both Israel and Iran. But the impacts are – so far – not as dramatic as headlines might suggest. **Israel’s closure of its Leviathan and Karish gas fields** disrupted exports to Egypt, which relies on these flows for about one-fifth of demand. - While this could see Egypt import more LNG to compensate, the most likely scenario is demand destruction. Egypt’s Petroleum Ministry has implemented an emergency plan to cut supplies to non-critical industries such as fertiliser producers, which were forced to halt operations on Friday. **Israel pounded Iran’s oil and gas infrastructure on Sunday 15 June**. Shahran oil depot, a storage facility outside Tehran with 11 tanks, is ablaze. Officials in Iran said the situation [is “under control”](https://english.alarabiya.net/News/middle-east/2025/06/15/iran-says-shahran-oil-depot-targeted-in-israeli-attack?ref=energyflux.news). An onshore processing plant at one of the world’s largest gas fields, South Pars, has also been hit. An Israeli strike caused a fire at Phase 14 of South Pars, reportedly halting production of 12 million cubic metres of gas. The blaze has since been extinguished. - South Pars provides around two third of Iran’s gas needs. Iran exports only small volumes to Turkey and Iraq, so the impact on regional balances remains very limited at this stage. Similarly, the volume of oil that may be impacted is insignificant given the supply overhang we have discussed above. ## Suspended animation Energy prices are rising, buoyed mostly by deteriorating sentiment. In the absence of a diplomatic breakthrough, this is likely to continue for most of next week and possibly beyond. But prices always surge on conflict. If price action isn’t backed by fundamentals the surge will be fleeting. As long as critical energy infrastructure supplying *global* markets remains unharmed, don’t expect the overarching direction of oil and gas markets to shift. If there is a global pivot to a war economy this might sustain some artificial economic growth, but it will be inflationary and prone to collapse. The long-term trend is downward and a drawn-out conflict will only reinforce this trend. **Osama Rizvi | Energy Flux | 15 June 2025** [Leave a comment (on website)](https://www.energyflux.news/dont-forget-the-macro-energy-market-israel-iran-war-economy-fundamentals-oil-gas) [Thoughts? Send us an email](mailto:seb@energyflux.news) **Get more timely, original market insights like this delivered straight to your inbox* 👇 [Subscribe ](https://www.energyflux.news/#/portal/subscribe) --- # More from *Energy Flux:* [Ukraine wants to frack its way to victoryEXCLUSIVE: Kyiv is hunting for foreign cash and technology to unleash an American-style shale gas revolution![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/logo-white-background-1000-square-9.png)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/Ukraine-fracking-shale-gas-rig-phoenix-from-flames-of-conflict-Russia-war-1.png)](https://www.energyflux.news/scoop-ukraine-fracking-freedom-shale-gas-natgas-europe-russia-war-energy/) [CounterweightTTF price upsurge must contend with demand flexibility and brimming global LNG supplies | EU LNG Chart Deck: 22 May 2025 Speculative investment funds are out on the prowl in the EU gas market again, buying up TTF gas futures like it’s 2021\. This is no surprise, the pattern is![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/logo-white-background-1000-square-10.png)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/20250522_0457_Winged-Bull-Market-Crash_simple_compose_01jvvt4eqferabf4m201ws74sy.png)](https://www.energyflux.news/counterweight/) [🎧 Fickle trade war takes its toll on LNG demandPLUS: Listener Q&A on TTF price outlook, US LNG risks, and Jeff Currie’s The New Joule Order![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/icon/logo-white-background-1000-square-11.png)đŸ’„ Energy Flux đŸ’„Seb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/thumbnail/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2fa9e7bf8c-f45c-4246-bddb-5e6b6d9b5376_1024x608.jpg)](https://www.energyflux.news/fickle-trade-war-takes-its-toll-on/) ### SOCAR: ‘Our customers are behind a glass wall’ URL: https://www.energyflux.news/azerbaijan-socar-our-customers-are-behind-glass-wall-gas-energy-vitaliy-baylarbayov-seb-kennedy-interview/ Last updated: 2025-08-04T20:34:39.000Z **Vitaliy Baylarbayov, deputy vice president of State Oil Company of the Republic of Azerbaijan (SOCAR), spoke to Seb Kennedy, founding editor of *Energy Flux,* about the prospects for expanding Azerbaijan’s gas exports to Europe.** In this wide-ranging interview, Mr. Baylarbayov – who also sits on the Executive Committee of the International Gas Union – discusses the ‘glass wall’ of policy and finance restrictions that he perceives standing between SOCAR and its European gas customers. The discussion also explores: - the outlook for hydrogen as an alternative export vector; - the commercial impediments to Azerbaijan’s ability to access the Vertical Gas Corridor; - the possible expansion of the Southern Gas Corridor, including the Trans-Adriatic Pipeline; - SOCAR’s approach to negotiating new gas supply deals on the eve of a global glut of LNG; - how the company views speculative market pricing on TTF and other European gas hubs. 💡 **TIP: Click on the drop-down arrows* ˅ *to reveal more* #### Vitaliy Baylarbayov – CV Mr. Baylarbayov brings over 30 years of experience in the oil and gas industry. He led negotiations and managed major projects including the Azeri-Chirag-Guneshli oilfields, Shah Deniz gas-condensate field, and the Baku-Tbilisi-Ceyhan pipeline. He played a key role in the development of the Southern Gas Corridor, contributing to the expansion of the South Caucasus Pipeline through TANAP and TAP đŸ’„ *Article stats: 3,500 words, 20-min reading time* _This post is for subscribers on the Premium and Deep Dives tiers only._ ### Ukraine wants to frack its way to victory URL: https://www.energyflux.news/scoop-ukraine-fracking-freedom-shale-gas-natgas-europe-russia-war-energy/ Last updated: 2025-11-10T14:41:57.000Z **EXCLUSIVE: Ukraine is working to unleash hydraulic fracturing with the goal of becoming a major shale gas exporter. The initiative, if successful, could transform European energy markets long before a peace deal is negotiated with Moscow.** Ministers in Kyiv are scrambling to access private investment and new drilling technology to exploit the country’s vast untapped shale gas resources, a senior government source told *Energy Flux*. The plans are critical to President Volodymyr Zelenskyy’s hopes of a post-war economic recovery, and could flip the script on Europe’s eternally febrile energy markets. Subscribe to **Energy Flux* to get the inside line on Kyiv’s energy policy, and support independent energy journalism [Subscribe ](#/portal/signup) Luring investment into Ukraine in the midst of an intensifying conflict is beyond ambitious. It’s practically a moonshot. But Kyiv is convinced it can be done, and is tapping Western allies to make it a reality. If so, this could have a material bearing on global energy markets, and even alter the trajectory of peace talks. 💡 This post is more than just an exclusive news story: it’s an **analytical resource** explaining in detail the *significance* of this scoop. ⚖ The article also runs the rule over the headwinds and tailwinds facing large-scale investments in the Ukrainian shale patch. Let’s get stuck in... đŸ’„ *Article stats: 2,200 words, 17-min reading time, 5 charts & graphs* _This post is for subscribers on the Premium tier only._ ### Back to Baku URL: https://www.energyflux.news/back-to-baku-azerbaijan-oil-rocks/ Last updated: 2025-06-03T05:51:39.000Z Azerbaijan occupies a fascinating and complex role on the energy-geopolitics map, wedged between north-south and east-west axes of Eurasian cooperation and conflict. So, I am very excited to be back in Azerbaijan for **Baku Energy Week.** I'll be reporting from the conference floor at the **Baku Energy Forum**, which is packed with dignitaries and high-ranking politicos from across the region. 0:00 /0:18 1× I'll also be taking a once-in-a-lifetime trip out to **Oil Rocks** – the world's first offshore oil platform that evolved into a surreal floating city of rusting oil gantries and bridges that sprawl across the Caspian Sea. The isolated and highly secretive *Neft DaƟları* (Oil Rocks) is now a crumbling homage to Soviet-era decline and environmental mismanagement. This 2016 documentary trailer gives a sense of how inaccessible, unique and frankly weird this place is: Oil Rocks is a bizarre hulking relic from a long-forgotten era of swashbuckling offshore adventurism. But Azerbaijan is not looking back: Baku has a highly ambitious vision to export clean power across the Black Sea to capitalise on Europe's decarbonisation drive. To get back in the Baku groove, and to bring readers up to speed with the entangled web of issues facing Azerbaijan's energy aspirations, I am reposting the special report I published after last year's visit. This 4,000-word feature article, the product of a week-long tour of the country's [many and varied energy installations](https://www.energyflux.news/from-baku-with-love/), gives a strategic overview of the energy landscape in the South Caucasus. Much of the analysis is still current, but bear in mind this post is now a year old; it was written in the run-up to COP29, well before the loss of Ukraine gas transits and the TTF-twisting fake news cycle that led many to believe Azerbaijan might play a role in facilitating continued Russian pipeline exports to Europe. That story is still infolding, which is why I'm here: to find out what the next chapter could mean for European gas and power markets. Azerbaijan's hybrid fossil and renewable export ambitions could move the needle on physical energy balances, but only if Baku plays its cards right. The main protagonist in the Azerbaijan gas story is (of course) regional geopolitics and shifting bilateral relations. I'll be reconnecting with folks at SOCAR, the energy ministry, and other well-connected industry players to bring you the full picture. Join me as I explore Baku's dilapidated infrastructure and moonshot clean export plans to decipher whether stranded Caspian resources still have a future in the fraught Eurasian energy puzzle. – Seb [Subscribe](#/portal/signup) P.S. The reposted deep dive looks even better now I'm using Ghost's flashy multimedia content editor. Check it out below, even if you read it last time (or better still, [read it in your browser](https://www.energyflux.news/back-to-baku-azerbaijan-oil-rocks/)). **I've lifted the paywall on this 2024 Deep Dive, but paid subscribers read it first a year ago.* **Sign up to* ***Energy Flux** **for timely, independent, on-the-ground reporting from* ***Baku Energy Week** *&* ***Oil Rocks!** [Subscribe ](https://www.energyflux.news/#/portal/subscribe) --- ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2024-04-17-16.28.52-1_DARK-1.jpg) ## ****REPOST: War, peace and energy in the land of fire** DISPATCH FROM BAKU: Can a ‘green corridor’ of energy trade heal deep wounds in the South Caucasus? **BAKU, 22 APRIL 2024: They say that peace and prosperity go hand in hand. But Azerbaijan, the small South Caucasus country transformed by Caspian oil riches, proves you can have one without the other.** An influx of petrodollars since the early 2000s propelled Azerbaijan from post-Soviet backwater into a regional economic and military powerhouse. Azerbaijan’s armed forces decimated neighbouring Armenia in a series of stunning and decisive offensives between 2020 and 2023 that reasserted Baku’s control over the Nagorno-Karabakh region and occupied territories. The two countries are technically still at war, although the Azeri people want to believe otherwise. Azerbaijan’s battlefield successes “settled” the issue, residents of Baku will impress upon you. Ilham Aliyev, Azerbaijan’s autocratic president, says the warring nations are “closer to peace than ever before” — a wishful line parroted by charming Azeri politicians in Azerbaijan’s chic and ostentatious capital. Oil wealth oozes from every corner of the city. Glass-fronted skyscrapers soar over an immaculate Caspian seaside boulevard dotted with enticing Persian-Anatolian eateries. The picturesque cobbled streets of the painstakingly restored old town send a very clear message: energy trade brings wealth, power and regional dominance. **For Armenia, the situation is dire.** Aside from so much else, the decades-long conflict cost Armenia the opportunity to become a transit country for Caspian hydrocarbons. Lucrative transit fees instead went to Georgia and Turkey, leaving Armenia economically isolated. Politically too the country is adrift after being abandoned by long-time ally Russia. Now, Azerbaijan’s upcoming presidency of COP29 is throwing a spotlight on the South Caucasus and its untapped renewables potential. Ministers in Baku want to promote the idea of a ‘green peace corridor’ — an electricity interconnector that unites feuding neighbours around a shared undertaking: to export pan-Caucasian wind and solar power to premium markets in Europe. European leaders are keen on the idea. Green infrastructure that forges an enduring peace deal while diversifying European energy sources and decarbonising coal-heavy Balkan power grids is a win-win-win. But there’s a catch: cross-border cooperation and investment won’t happen without a lasting diplomatic accord between Baku and the Armenian capital of Yerevan. **This is a region still processing the harrowing fallout** from decades of failed diplomacy and armed conflict. Armenia last week [alleged](https://www.msn.com/en-my/news/world/armenia-claims-azerbaijan-completed-ethnic-cleansing-in-nagorno-karabakh/ar-BB1lIqRc?ref=energyflux.news) Azerbaijan undertook “ethnic cleansing” and destroyed Armenian [cultural heritage](https://www.panorama.am/en/news/2024/04/19/destruction-church-Shushi/2991847?ref=energyflux.news) in Nagorno-Karabakh. Baku says Armenia’s 30-year occupation of territories on the Iranian border left the region contaminated with mines and toxic pollutants. Both sides accused each other of [violating](https://www.azatutyun.am/a/32893685.html?ref=energyflux.news) the terms of a ceasefire agreement during a cross-border skirmish in early April, prompting G7 leaders to [weigh in](https://news.az/news/g7-countries-urge-azerbaijan-armenia-to-remain-committed-to-peace-process?ref=energyflux.news). Against this backdrop, what chance is there that the distant promise of green export riches will focus minds at heated peace talks? Zoom out, and the picture becomes more nuanced. Azerbaijan might have won the war, but it still needs to cooperate with Armenia to win the peace — and there are some [encouraging signs](https://www.msn.com/en-gb/news/world/foes-azerbaijan-and-armenia-agree-historic-return-of-villages/ar-AA1njD7B?ref=energyflux.news) on that front. In parallel, the COP29 host is embracing renewables to diversify its fossil fuel-reliant economy and free up natural gas for export. An initial 2 GW of wind and solar is due online by 2027, but expansion beyond that requires access to premium export markets — and Armenia, to an extent, stands between them. Looking wider still, Azerbaijan and Armenia sit at the gateway between east and west. An enduring peace settlement could open a vital new trade corridor between energy-poor Europe and energy-rich landlocked Central Asia. With war raging in Ukraine, nations on both sides of the gateway are keen to unlock the opportunity — putting the issue of Azerbaijan-Armenia relations at the heart of geostrategic Eurasian energy and climate considerations. When it comes to energy geopolitics, the South Caucasus is one of the world’s most complex regions to unpick. This (rather long) special dispatch from Baku analyses the oil, gas and renewables outlook for Azerbaijan, and the sensitivities of developing energy flows across borders still bristling with tension. The region tends to fly under the radar of energy observers, but high-stakes peace talks could determine the energy future of the South Caucasus and, by extension, Europe. đŸ’„ ***Article stats: 4,200 words, 20-min reading time, 12 charts, graphics, videos, maps & photos*** **Researching this article involved numerous flights over two weeks of travel, many hours of interviews, reams of notes and a fair bit of data wrangling. None of this would be possible without the support of paid subscribers.* [Support independent energy journalism ](#/portal/signup) ## Third time lucky? Hopes of building a ‘peace pipeline’ to soothe Armenia-Azerbaijan relations have been dashed not once but twice. There was talk in the 1990s of including Armenia in what is now the wending Baku-Tbilisi-Ceyhan (BTC) pipeline that pumps Caspian oil from Azerbaijan up through Georgia and down to Turkey’s Mediterranean coast. The same was said about the South Caucasus Pipeline, which forms the easterly section of the Southern Gas Corridor carrying natural gas from Azerbaijan’s Shah Deniz offshore gas field to southern Italy. For the sake of expediency, on both occasions the decision made for these pipes to circumvent Armenia and thus the conflict itself. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/f12a4ee2-9829-4361-a40a-7e7547f9a0c6_1000x541-jpeg.jpg) **Azerbaijan’s main oil and gas export pipelines (*[**source*](https://tekmormonitor.blogspot.com/2017/07/azerbaijans-h1-2017-oil-exports-via.html?ref=energyflux.news)**)* Azerbaijan’s deputy energy minister Elnur Soltanov said at a media briefing in Baku last week: > “We missed that boat \[on a peace pipeline\], but maybe this is the time for a green peace corridor." Soltanov, who has taken on a second job as the CEO of Azerbaijan’s COP29 presidency, said Baku wants to deliver a “peace dividend” following Azerbaijan’s military conquest of Nagorno-Karabakh and recapture of territory previously occupied by Armenia. ## Peace powerline pain-points There is much talk in Baku about COP29 injecting momentum into a ‘green corridor’ of sustainable energy trade and investment. The idea is to position Azerbaijan as a key exporter of zero-carbon electricity to Europe. Two main interconnector routes are under consideration: a subsea power line under the Black Sea from Georgia to Romania, and a terrestrial transmission line via Armenia, Turkey and the Balkans. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0896fb02-a5f1-4b04-8143-287a95298dfb_1674x774.png) **Proposed ‘green corridor’ power line routes from Azerbaijan to Europe* Neither of these ‘green corridor’ concepts is straightforward. The Black Sea route has been contemplated since 2014 as a simple 1 GW high voltage direct current (HVDC) EU interconnector for Georgia. Azerbaijan joined the project a couple of years ago as a means of evacuating wind and solar power, jacking up the cable’s mooted capacity to 3 GW or 4 GW, according to sources in Baku. While interest has grown over time, so have the challenges it faces. Laying a 1,100 km high-voltage submarine cable at water depths of more than 2,000 metres is a vastly ambitious technical undertaking that could cost upwards of €2.3 billion. Add to that the logistical and insurance implications of cable-laying near an active warzone, and the project would seem unviable until there’s an end to hostilities in Ukraine and warships no longer patrol the Black Sea. But sooner or later that day will come, and leaders from Romania, Hungary, Georgia, Armenia, Azerbaijan and the European Union are making high-level preparations in earnest. ENTSO-E, the European Network of Transmission System Operators, included the Black Sea interconnector in its latest ten-year network development plan. The project’s official status is ‘under consideration’ with a tentative (read: optimistic) in-service date of December 2029. ## Enclaves and exclaves The terrestrial option might seem quicker and easier. But again, even the relatively simple first step — a power line from Azerbaijan to Turkey via Armenia — is mired in difficulty. Azerbaijan is split into two distinct territories: the ‘mainland’ to the east, and the landlocked exclave of Nakhchivan to the west. Armenia sits between the two. Nakhchivan’s energy system used to be connected to mainland Azerbaijan by pipes and power lines but these were largely destroyed during the war, Soltanov said. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/9adb8e7d-55b0-4a7f-901f-58a3a22bc6be_770x383.png) **Nakhchivan imports electricity from Turkey and natural gas from Iran. Turkey’s electricity system is synchronised to the ENTSO-E European grid, but Nakhchivan is not* > “We need to connect Nakhchivan to the mainland. It should and could go through Armenia and from there through Turkey and all the way to Europe also, and in fact it’s part of the quadrilateral agreement that we have \[with Armenia, France and the European Council\]. We believe that these corridors could also have some sort of peace dividend, this is one of the ideas we are entertaining." – Deputy energy minister Elnur Soltanov ## Tensions in Zangazur It is a noble objective. But head west from Baku towards the Armenian border, and the idea starts to sound fanciful. Azerbaijan is rebuilding old Soviet-era transport links with Nakhchivan via its southern ‘liberated territories’ that were recaptured following 30 years of Armenian occupation. The project envisages a road and railway crossing Armenia’s southern territory — the Zangazur (AKA Meghri) corridor. Azerbaijan demands it should control the corridor and border checkpoints, which Armenia rejects. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/debe250c-cb6e-4453-9ebc-f4e16ba678fc_650x569.png) **The Zangazur (Meghri) corridor in southern Armenia would connect Azerbaijan proper with exclave Nakhchivan (*[**source*](https://aze.media/construction-of-zangezur-corridor-underway-despite-some-remaining-disagreements/?ref=energyflux.news)**)* Armenia tried to “block” the project, according to Nijat Karimov, an official in East Zangazur who advises the region’s representative to President Aliyev. “It is another mistake they made because there are always alternative ways,” Karimov said during a tour of the new Agali ‘smart’ village in Zangazur last week. Armenian authorities will hopefully have a change of heart “very soon”, he added. But if they don’t, the railway would instead pass over Azerbaijan’s southern border and enter Nakhchivan via Iran, bypassing Armenia altogether. Sound familiar? It gets worse. Control of the Zangazur corridor is a highly sensitive matter and there are fears that it could be the next flashpoint in the crisis. Russia, which participates in a tripartite dialogue over Zangazur, has its own interests in developing a north-south trade corridor through Armenia to Iran. Without a hint of irony, Moscow last week [called for](https://news.am/eng/news/814741.html?ref=energyflux.news) all sides to exercise “restraint”. A military solution to the Zangazur question would kill any hopes of Azerbaijan building an overground interconnector to Europe via Armenia. The idea of rerouting via Iran might work for a regional railway, but European leaders and multilateral lenders would be hard-pressed to support a transmission project that benefits Iran and further isolates Armenia. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/2024-04-15-17.13.10-1.jpg) ## Crimped by the grid This is a problem for Azerbaijan. The government is desperate to showcase its green credentials and needs a compelling renewables growth story to tell when the world’s media descends on Baku for COP29 later this year. Solving the Zangazur puzzle would give credence to Azerbaijan’s future renewables aspirations. The country is making progress within the confines of existing infrastructure. Installed renewables capacity is on track to rise from today’s 1.6 GW to 3.6 GW (30% of total capacity) before 2030\. This will be delivered by an additional 2 GW across eight wind and solar projects that are due online by 2027, all of which can be integrated without significant grid upgrades. Further ahead, however, officials are planning an enormous 10 GW pipeline of wind and solar projects that would overwhelm the gas-rich country’s 9 GW electricity system. Going beyond 30% renewables “is the threshold from which we will need additional support or strengthening of the grid,” said Kamran Huseynov, deputy director of the state-run Azerbaijan Renewable Energy Agency (AREA). Speaking during a tour of Masdar’s 230 MW Garadagh solar PV plant, he said the export connection is vital to exceeding 30% RE. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/image-1.png) **Kamran Huseynov, deputy director of Azerbaijan’s state renewable energy agency, at Masdar’s 230MW Garadagh solar PV plant © Seb Kennedy / Energy Flux* ## Renewables force reform Renewables plants such Garadagh operate as independent power producers (IPPs) whose output offsets thermal generation from Azer Energy, the state monopoly with sole responsibility for generation, security of supply and grid stability. Officials are keen to talk about how much gas is saved from Azerbaijan’s renewables push, but the regulatory framework overseeing this transformation is not fit for purpose. Electricity market reform and monopoly unbundling has been on the cards since 2016\. The process hasn’t officially begun, but IPPs are forcing the issue. “So by introducing the new IPPs we are also kicking off with an electricity market,” Huseynov added. In parallel, AREA is looking at battery storage and production of green hydrogen to integrate more wind and solar. This adds extra urgency to the reform process. > “Who would be in charge of the battery storage? Who is covering the cost? You either put it as the responsibility of the IPP or the grid operator. Will it affect the \[renewable\] production tariff or will you have an additional battery storage tariff for ancillary \[services\] payment? These are all questions we are working on to see how we can implement projects beyond 2027.” – Kamran Huseynov, Azerbaijan Renewable Energy Agency ## Caspian wind — electrons or molecules? Market liberalisation and grid constraints must be fixed before Azerbaijan can exploit its Caspian offshore wind resource, which requires gigawatt-scale developments. Azerbaijan is working with Masdar to identify zones for an initial 2 GW of offshore wind that would come online post-2027, potentially rising to 6 GW later. Securing end-user commitment will be key to getting projects off the drawing board. The only destination market able to provide a demand anchor of this size is Europe, but transmission is a challenge. Azerbaijan is also looking at hydrogen as an alternative energy vector for enabling Caspian offshore wind. Similar obstacles present themselves here too. The EU, again, is the only viable market for Azerbaijani hydrogen exports. There is no market pull from domestic industry for green H2, and regional neighbours don’t need it either. “Nobody in Central Asia is going to pay a premium for green hydrogen,” said Teymur Guliyev, deputy VP energy transition at SOCAR. “If they want to, they can do it on their own. Uzbekistan, Kazakhstan, they have massive natural resources for green energy generation.” The Southern Gas Corridor could be upgraded to carry hydrogen, but Azerbaijan can’t do it alone. This would only work “if they can get some consortium going, similar to what we saw when they built the SGC, maybe seven countries and a number of companies,” Guliyev said. It doesn’t make sense to export both commodities because the infrastructure serves the same purpose. “Either way, you’ve got to get the energy from Azerbaijan to the EU,” he said. “The question is, do you 
 build new hydrogen pipelines, or do you use the Black Sea submarine cable to Europe and then you just export the green electrons and let them produce the hydrogen on their side? That is an open question,” he said. So, Caspian offshore wind development hinges on Azerbaijan forging international partnerships to secure long-term offtake deals and a viable westerly route for energy export infrastructure. Is it maybe all too difficult? And if so, is there an easier way? ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/IMG_1665-1.jpg) ## All roads lead back to gas Today, piping natural gas to Europe is Azerbaijan’s simplest energy export option. Upstream supply, transmission infrastructure and demand commitments are all in place. But domestic demand is rising almost as quickly as production is growing, gobbling up the slack. Azerbaijan exported 12.9 billion cubic metres (Bcm) of gas to Europe along the SGC last year (plus a similar amount to Turkey). It expects that to rise to 14 Bcm by 2026 and is targeting 20 Bcm per year from 2027, although there are doubts about SOCAR’s ability ramp up production in time. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a0ce0762-523f-479d-afef-fc264c8556c7_4350x2148.png) Wind and solar fix this by displacing domestic gas-fired generation and freeing up methane molecules for export. In fact, this is the primary motivation for Azerbaijan’s renewables pivot. “Our internal gas consumption is around eight billion cubic metres. Now with these renewable projects coming into effect we can use renewable energy for internal use and free up around 8 Bcm of gas,” said Mustafa Garbanli, head of environmental disclosures and green affairs department at SOCAR. ## Greening the gas chain Renewables also help to reduce the upstream emissions footprint of Azerbaijan’s gas production, alongside plugging methane leaks and eradicating routine flaring. With the EU’s Carbon Border Adjustment Mechanism (CBAM) coming into force from 2026, cleaning up the gas value chain is becoming a pressing issue for SOCAR. “If we don’t do that, there will be penalties so our gas will not be competitive \[and\] we will not survive,” Garbanli said. Environmental considerations are no longer “just ethical and moral, now it is both financial, ethical and moral. That’s why there is no way out.” ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0efad79d-35cf-4906-a361-a66b074740c4_640x480.gif) **Speeding past old oil derricks outside Baku © Seb Kennedy / Energy Flux* SOCAR also needs to expand transmission capacity on the SGC to hit 20 Bcm. This means upgrading compressors along the Trans-Adriatic Pipeline (TAP), the westerly segment of the SGC that runs from Turkey through Greece to Italy. Again, SOCAR, which owns 20% of TAP, can’t do this alone and needs European partners to commit to ship extra volumes to make the investment worthwhile. In parallel, plans are afoot to boost exports via the ‘Solidarity Ring’, a project to reinforce existing pipelines between Turkey and the Balkans and beyond. The EU-backed Solidarity Ring would enable gas to be diverted from the Trans-Anatolian Pipeline (TANAP) segment of the SGC northwards as far as Ukraine and Hungary. Again this requires consortium buy-in, but if it comes together it might render the TAP expansion redundant. ## Caspian oil’s last hurrah The ramp-up in European gas exports has given Azerbaijan a huge cash injection. The country earned $15 billion from gas exports in the energy crisis year of 2022, up from $5.5 billion the previous year and $2.2 billion in 2020. The gas windfall has come in handy. Baku’s oil revenues are highly unpredictable and reflect the volatility of global markets, lurching from $15 billion in 2019 to $9 billion in the pandemic year of 2020 before soaring to $19 billion in 2022, following Russia’s full invasion of Ukraine. The variability masks the fact that Azerbaijan’s oil export volumes are in terminal decline. Exports peaked at 30 million tonnes (mt) in 2019 and have fallen every year since, clocking in at 26 mt in 2022\. Ministers expect this to fall by another 8.8% by 2027. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/image-2.png) To offset the decline, Azerbaijan is turning into a transit country. Last year, Kazakhstan began shipping oil from the vast Tengiz field to Azerbaijan’s Sangachal terminal on the Caspian. From there it is pumped into the Baku-Tbilisi-Ceyhan (BTC) pipeline and towards global markets. Azerbaijan also wants to re-open a pipeline to Georgia’s Supsa terminal on the Black sea to open another non-Russian export route for Kazakh oil. This has the added benefit of avoiding the need to mix heavy Kazakh crude with lighter Azeri oil grades in the BTC pipeline. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/Cranes-1.jpg) ## Resurrecting the old Silk Road Azerbaijan’s pivot from oil exporter to transit country for Kazakh crude might seem like a hopeless backwards step. But, perhaps ironically, it exemplifies the forward vision needed to position the country as a crucial Eurasian trade link. Before February 2022, 86% of terrestrial trade between Europe and China transited through Russia along the so-called Northern Route. Russia’s full invasion of Ukraine and ensuing Western sanctions made this less attractive, presenting an opportunity to challenge Moscow’s transit monopoly. Meanwhile, Houthi attacks on Red Sea commercial vessels have complicated seaborne trade, pushing exporters to seek safer alternative routes. Thanks to a confluence of global crises, the old Silk Road is being reincarnated as the Middle Corridor — a multimodal transport system consisting of existing rail and port infrastructure. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/image-3.png) **Source: Port of Baku* The Middle Corridor offers benefits in its own right. Shipping distances are shorter, allowing for expedited transit times, and it avoids Russia altogether. Amazingly, Azerbaijan’s energy transition — such that it is — is already stimulating trade in green energy components along this passage. ## Blazing a trail to Baku ACWA Power, the Saudi state-backed renewables developer, intends to use the Middle Corridor to ship bulky 6.5 MW Chinese wind turbine components to a 240 MW onshore wind farm it is developing in Azerbaijan’s Absheron and Khizi districts. ACWA originally intended to ship components by sea from factories on China’s east coast via Turkey and Georgia, said Ashley Rowlands, ACWA Power project director. ACWA then looked at using river barges through Russia, before settling on the 7,000 km overland route via Kazakhstan, using roads for oversized components and railways and ships for smaller containerised items. The 111 blades and tower sections for the project’s 37 Envision turbines will ride through Kazakhstan before being loaded onto vessels and shipped across the Caspian Sea to the Port of Baku — which is gearing up for a major expansion in anticipation of a surge in terrestrial east-west trade flows, including a future buildout of Caspian offshore wind farms. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/9d33b02b-5d4f-4bf6-b8cc-69d3ba2bacdb_4032x3024-jpeg.jpg) **Cranes unloading Turkmen fertiliser into a warehouse at the Port of Baku © Seb Kennedy / Energy Flux* ## Trans-Caspian connection There’s a degree of overlap between the ‘green peace corridor’ for energy exports and the Middle Corridor for commerce. ACWA Power’s use of the Middle Corridor to deliver equipment to build a wind farm that could, eventually, contribute to Azerbaijani electricity exports to Europe is emblematic of the concept. “Azerbaijan is looking at the green corridor from \[the perspective of\] Azerbaijan, but it’s obviously a feeder also for all the other Central Asian countries to feed into Europe through that corridor,” said Rowlands. To enable those energy flows, long-lost plans for a Trans-Caspian pipeline are being resurrected also — but with a green twist. The subsea gas pipeline project from Turkmenistan to Azerbaijan has been dead in the water for some time. But phenomenal progress developing wind and solar resources in Kazakhstan and Uzbekistan is injecting fresh momentum into a Trans-Caspian power line — or even a Caspian hydrogen pipeline — to deliver those Central Asian green energy sources to Europe via Azerbaijan. Deputy minister Soltanov said he views a Trans-Caspian power line as the most likely contender, while ACWA Power CEO Selim GĂŒven said a hydrogen pipeline could deliver greater value. The decision cannot be taken in isolation and must be coordinated with onward connections to Europe. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/357096f1-deb2-4dc2-8d75-8f7b5b10dfc0_1788x685.png) **A Trans-Caspian energy link between Azerbaijan and Turkmenistan could connect Central Asian renewables with European markets © Energy Flux* Neither will be easy. Just like the Black Sea subsea cable or Trans-Anatolian power line, a Trans-Caspian link requires cooperation at the highest levels and “a vision and political will”, said ACWA’s CEO GĂŒven. Each project is a mammoth undertaking in its own right. Linking them together in a timely fashion is even more ambitious. ## Time for another miracle It is tempting to be pessimistic, but the combined force of a market ‘pull’ from Europe and a market ‘push’ from Central Asia should not be underestimated. If they can overcome their differences, Armenia and Azerbaijan are perfectly positioned to reap huge economic benefits, both in terms of energy flows and commerce, through their respective territories. Azerbaijan has been the driving force behind not one but two trans-regional energy infrastructure projects in the form of the BTC and TANAP/SGC pipelines. Sceptics poured scorn on both projects at the time, yet Baku’s wealth stands testament to its ability to forge partnerships that make impossible Caucasian energy infrastructure projects happen. The city’s prominence as the next COP venue is thanks in part to this achievement. Azerbaijan is highly motivated to pull off a third Caucasian energy infrastructure marvel, and the UN climate conference in November is adding impetus to this endeavour. With Baku about to come under intense scrutiny, Azerbaijan stands to benefit from capitalising on this unique moment to push ahead with the ‘peace corridor’ concept. In so doing, it could mark the start of a new era of normalised neighbourly relations that delivers the ‘peace dividend’ that the region so desperately needs. “Momentum is building” said ACWA’s CEO GĂŒven. “Azerbaijan is a gateway which we would like to grow further. This is only the beginning of the story.” **Seb Kennedy | Energy Flux | 22 April 2024** **If you enjoyed that (very) deep dive, sign up to* ***Energy Flux** **for for more honest & fiercely independent energy journalism* [Subscribe ](#/portal/signup) ### APLNG’s billion-dollar price cut URL: https://www.energyflux.news/aplng-billion-dollar-price-cut-lng-natgas-gas-china-asia-sinopec/ Last updated: 2025-11-10T14:42:10.000Z **One of Australia’s largest liquefied natural gas megaprojects just slashed its long-term sales price with a cornerstone Chinese buyer to the tune of *almost one billion dollars*, according to analysis by Energy Flux.** **The significance of the move, which went unnoticed by most market commentators, underscores the paradigmatic shift underway in LNG market power.** [Subscribe ](#/portal/signup) Australia-Pacific LNG (APLNG) cut the oil-indexed price formula for its 7.6 million tonne per annum contract with China’s state-run Sinopec last week. APLNG, a two-train liquefaction plant in Eastern Australia with nameplate export capacity of nine million tonnes per annum, signed the long-term sales and purchase agreement (SPA) in 2016\. The contract allows for price reviews every five years. Origin Energy, an Australian gas producer which owns 27.5% of APLNG, said it will take a six-month revenue hit of A$55 million (US$35 million) as a result. Origin didn’t provide many details about the new formula, saying only that it will cover the five-year period to 2030. > *“The price review has resulted in a reduction in the JCC-linked contract slope, which is effective from 1 January 2025\. As a result of this change, Origin expects its share of Australia Pacific LNG Underlying EBITDA for the second half of FY25 to be lower by $55 million. The LNG supply contract ends in December 2035 with one final price review in 2030, which is at Australia Pacific LNG’s discretion.” – Origin Energy* [*ASX filing*](https://www.originenergy.com.au/about/investors-media/sinopec-price-review-concluded/?ref=energyflux.news)*.* Price renegotiations are infrequent – every five years, at most – and highly secretive. The outcome is rarely publicised and the price formula is almost never revealed due to commercial confidentiality. *But Origin might have given the game away in its brief regulatory update*. The revenue hit of A$55 million, which applies to the second half of FY2025, offers a vital clue đŸ•”ïžâ€â™‚ïž This single data point can be used to quantify the amendments to this multi-billion-dollar SPA. Calculations by *Energy Flux* reveal the net value of the price cut to Sinopec is almost **one billion dollars over five years**. The analysis, explained in full below, sheds new light on the high-stakes nature of the APLNG-Sinopec renegotiation. It tells us how major LNG buyers and sellers see prices trending over a multi-year timeframe, and where they align over future expectations. **Elevate your insights. Subscribe to* ***Energy Flux** *and support fiercely independent market analysis* [Subscribe ](https://www.energyflux.news/#/portal/subscribe) The findings are of material significance to Europe’s febrile natural gas market, which is likely to remain overwhelmingly reliant on spot LNG to refill winter gas storage facilities for years to come. This leaves European gas traders, producers, suppliers and consumers structurally exposed to market dynamics in Asia, where most LNG is traded under long-term oil-indexed contracts such as this one. The APLNG-Sinopec price review isn’t just another footnote in LNG trade journals — it marks a seismic shift in bargaining power. Let’s take a break from the deafening noise of histrionic price movements on Dutch TTF and get under the bonnet of a market-moving contract renegotiation between two heavyweight LNG players. Spoiler alert: When buyers are extracting billion-dollar concessions from sellers at the negotiating table, you know that the bullish myth has been busted. đŸ’„ *Article stats: 1,800 words, 11-min reading time* _This post is for subscribers on the Premium tier only._ ### Counterweight URL: https://www.energyflux.news/counterweight/ Last updated: 2025-06-17T09:26:59.000Z *TTF price upsurge must contend with demand flexibility and brimming global LNG supplies | EU LNG Chart Deck: 22 May 2025* ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/1-Dashboard.png) **Speculative investment funds are out on the prowl in the EU gas market again, buying up TTF gas futures like it’s 2021\.** This is no surprise, the pattern is well established: on the tiniest hint of bullish news flow, Commodity Trading Advisors (CTAs) start executing automatic TTF buy trades. Often these are based on spurious headlines, unsubstantive soundbites, or unconfirmed regulatory interventions with distant time horizons. Donald Trump’s damp squib phone call with Vladimir Putin on Monday appears to have triggered the bullish algorithms. Their trading logic is as follows: Trump’s credulous rapprochement with Putin has, predictably, yielded zero results towards a ceasefire in Ukraine (let alone a lasting peace accord). Therefore, the prospects are dimming for the lifting of sanctions against Moscow and the return of Russian pipeline gas to Europe. Never mind the fact that a lasting peace settlement was always going to be months away, at best. Or the reality that cautious European energy companies, not the White House, would have to be willing counterparties to Gazprom. Monday’s phone call – in which one septuagenarian kleptocrat [played the other like a fiddle](https://www.abc.net.au/news/2025-05-20/played-by-putin-weary-trump-could-walk-away-from-ukraine/105312426?ref=energyflux.news) – apparently means that EU natural gas futures for delivery next month are suddenly worth 5% more than they were before one of them [reluctantly](https://news-pravda.com/world/2025/05/19/1345593.html?ref=energyflux.news) hung up. I’m being facetious, of course. The EU adopted its 17th round of [sanctions](https://enlargement.ec.europa.eu/news/eu-adopts-17th-sanctions-package-against-russia-2025-05-20%5Fen?ref=energyflux.news) against Russia on Monday, seeking to stymie Moscow’s energy export revenues. This came shortly after the EU Commission published its [roadmap](https://www.energyflux.news/zombie-bulls-twitch-back-to-life/) for a Russian gas ban. On the supply side, there was an unplanned outage at the Kollsnes processing plant that could coincide with seasonal maintenance scheduled this week at some Norwegian fields and facilities. And those cavernous EU gas storages aren’t going to fill themselves. For investment funds, events over the last fortnight sent a signal to hit that big red ‘buy’ button. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2-Empty-bounce_001.png) [Subscribe](#/portal/signup) So far, so predictable. But perma-bullish hedge funds are not the primary actors in the EU gas market right now. That role currently rests with the Commercial Undertakings – the physical players with large production, supply and storage portfolios. Think: gas producers, distributors, utilities, storage operators, and capacity holders. These participants are the counterweight to the oversized speculative capital component that’s been driving TTF price action all over the place since the 2021-22 energy crisis. This week’s bumper [**EU LNG Chart Deck**](https://www.energyflux.news/tag/chart-deck/) dives into the shifting procurement and hedging strategies of Commercial Undertakings to shed light on the way the summer gas market is likely to unfold. It also runs the rule over global LNG trade economics and how recent price action is reshaping inter-basin arbitrage from global LNG supply locations. TL:DR; While the CTAs are striving to relive past speculative glories, the physical gas market is sending a crystal-clear signal: this is *not* a buying opportunity. Let’s dive in. *Article stats: 1,800 words, 8-min reading time, 16 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Important update: Energy Flux has moved! URL: https://www.energyflux.news/important-update-energy-flux-has-moved/ Last updated: 2025-05-16T06:40:31.000Z Big news: ***Energy Flux* has switched platform providers**, moving from Substack to Ghost 😼 This change allows me to improve and expand the newsletter’s overall value proposition — delivering a richer experience, sharper analysis, and more utility for you. **Most importantly:** *You don’t need to do anything to keep receiving emails.* Your subscription, whether free or paid, has already been seamlessly transitioned to Ghost. See for yourself: just head on over to [EnergyFlux.news](https://www.energyflux.news/) and sign in with your existing email. **On Ghost, subscribers sign in using secure email authentication links, so there are no passwords to set or forget.* [Go check it out ](https://www.energyflux.news/) ### **For Paid Subscribers:** - **Stripe billing will continue uninterrupted.** Ghost has in-built Stripe integration so your paid subscription, whether monthly or annual, should renew on the same date & at the same rate. - **Corporate invoicing will not be affected.** Your renewal date won’t change, and your (group) sub has been migrated seamlessly. - **Everything is online.** However you subscribe, you can verify your subscription status by logging into the website via the link above. Any issues? Hit reply, or [email me](mailto:seb@energyflux.news). ### **Why Ghost? đŸ‘»** This move isn’t just about a new platform — it’s about unlocking tools to better serve you: 1. **More features, integrations, and add-ons** Ghost’s ecosystem allows me to expand the newsletter’s scope, including revamping the [*EU LNG Chart Deck*](https://www.energyflux.news/tag/chart-deck/) (stay tuned for exciting datavis updates). Expect a richer data experience and more user-friendly content. 2. **Flexible pricing tiers** Ghost supports multiple subscription tiers, meaning I’ll soon offer *bespoke membership options* to suit all budgets — without compromising on quality. 3. **Lower fees = better value** Unlike Substack’s revenue share model, Ghost’s flat fee structure keeps costs low. This means I can *keep subscription prices stable* instead of raising them to offset rising platform fees. ### **What to Expect During the Transition** - **Evolving site functionality** The [website](https://www.energyflux.news/) & archive have been migrated to Ghost, but I haven’t yet replicated all of the Substack features (such as Subscriber Chat and Podcast hosting). They are on the to-do list – I appreciate your patience. - **Temporary schedule changes** Post/podcast frequency may fluctuate while I adapt to Ghost’s tools and get things up and running. Rest assured, the usual cadence (and then some!) will resume ASAP. - **New features & tiers** Over time, you’ll see new subscription options, enhanced archives, and fresh formats as I leverage Ghost’s capabilities. This is just the beginning! ### **Final Notes** I love publishing *Energy Flux.* The newsletter is now my full time job and it’s thanks to the support of thousands of loyal readers that I am able to earn a living this way. Time is the ultimate commodity, and I’m honoured so many of you choose to spend some of it here with me. This transition is about repaying your investment by making *Energy Flux* a worthwhile use of your time, on every visit. Switching platform is about **future-proofing** *Energy Flux* — ensuring the newsletter remains your go-to source for *fiercely independent* EU-focussed gas, LNG and energy market analysis. Change can be messy, but I’m working hard to make this smooth and rewarding for you. Questions? Hit reply — I’m here to help. As ever, thank you for your ongoing trust and support. — Seb ### The Merz mandate URL: https://www.energyflux.news/the-merz-mandate/ Last updated: 2025-06-17T09:27:27.000Z **Russia is on the offensive, Europe is rearming, and the US — once the Old Continent’s security guarantor — has gone AWOL. Germany, caught in the middle, must recalibrate its energy allegiances under a fragile new coalition led by a historically unpopular new Chancellor.** [Subscribe now](https://www.energyflux.news/subscribe) The task facing Germany’s new Chancellor Friedrich Merz became much tougher following a bombshell in the Bundestag. Merz failed to win support from his own coalition members in the first round of a typically banal voting procedure, only to gain a majority after an embarrassing second round. The incoming chancellor now leads an inherently unstable Grand Coalition that must somehow revitalise Europe’s fastest-shrinking economy. The German gas giant is waning at an alarming rate: the world’s third-largest economy is predicted to have a third year of no growth, a situation attributable primarily to high energy costs and exacerbated by US tariffs. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/public/images/6c0e7f72-7734-48f8-aebc-8288a333ebf9_1536x1024.png) **Tug of politics. Image by Sora.* Merz, a centrist technocrat who places his faith in market economics, ran on a pro-growth platform. But the only thing growing in post-nuclear Germany right now are energy costs. Taming Germany’s skyrocketing gas and power prices will be top of his economic agenda. Merz must also contend with an American trade war, controversies swirling around new LNG terminals, and a burgeoning populist backlash from Germany’s pro-Kremlin far right. - How can Merz deliver on his commitment to bring down the cost of energy to give the beleaguered German economy a shot in the arm? - With Germany structurally dependent on natural gas imports, how will Merz balance energy security, affordability, and industrial competitiveness concerns? - Will fraught geopolitical relations shape Germany’s energy choices — or vice-versa? > *This exclusive* [*Deep Dive*](https://www.energyflux.news/t/deep-dive) *by regular contributor explores the impossible energy/trade/foreign policy trade-offs facing Merz, as well as the political opportunities that he could leverage as global gas market conditions shift.* > > *Zach spoke to the A-list of German energy and political analysts to bring you the full picture from Berlin, at this critical moment in European energy geopolitics.* > > [*Subscribe now*](https://www.energyflux.news/subscribe) *for full access, and support fiercely independent energy journalism.* > > *— Seb* [Subscribe now](https://www.energyflux.news/subscribe) *ARTICLE STATS: 3,500 words, 17-min reading time, 5 charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### 🎧 Nord Stream 2: the plot thickens! URL: https://www.energyflux.news/nord-stream-2-the-plot-thickens/ Last updated: 2025-05-14T15:01:55.000Z 🎧 Nord Stream 2: the plot thickens! 0:00 /200 1× **The day after the European Commission proposed an outright ban on Russian gas in the EU, a Swiss court threw a lifeline to Nord Stream 2.** [Subscribe now](https://www.energyflux.news/subscribe) The ruling opens the door to a potential revival of the defunct Russia-Germany gas pipeline that was half destroyed in a dramatic subsea explosion in 2022. How should we square the circle of an EU ban on Russian gas with a possible revival of Nord Stream 2? How does the restructuring ruling affect the ownership of this contentious piece of infrastructure? Would any buyer really be interested in owning it? This episode of [**Energy Flux: On Air**](https://www.energyflux.news/podcast) unpacks the legal ruling and weighs up the options in light of the EU’s push to outlaw Russian gas entirely, which I covered in [last week’s ](https://www.energyflux.news/p/zombie-bulls-twitch-back-to-life)[**EU LNG Chart Deck**](https://www.energyflux.news/p/zombie-bulls-twitch-back-to-life). I also discuss the historical purpose of Nord Stream 2, the role it played before and during the 2021-22 energy crisis, and how Gazprom’s actions have galvanised a European political consensus against a resumption of Russian gas dependency. The full transcript is included below. Thanks for listening, — Seb [Leave a comment](#ghost-comments-root) --- # More from *Energy Flux*: [Zombie bulls twitch back to lifeAre investment funds rising from the ashes of the 2024 bull run? After months of relentless selling, Dutch TTF futures twitched to life this week as Brussels unveiled plans to sever ties with Russian energy imports by 2027 — a move greeted as a bullish spark.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2fea13547b-d5b6-4a85-80f7-e66ea55ddc43_1536x1024.jpg)](https://www.energyflux.news/p/zombie-bulls-twitch-back-to-life) [Gas attack: Inside Russia’s new strategy to break UkraineA gas metering station ablaze and a pipeline sneak attack. A 30-day energy infrastructure ceasefire violated within the hour only to be revamped in Russia’s favour a week later. Deep distrust, recriminations and ongoing clashes are the soundtrack to putative Ukraine ‘peace talks’.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxZach Simon![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f2f0df68a-d425-43b2-b9b5-cda96db2e4fe_1792x1024.jpg)](https://www.energyflux.news/p/gas-attack-inside-russias-new-strategy) [Sudzha burns đŸ”„The natural gas transmission system that used to pump Russian gas through Ukraine into Europe is ablaze after being struck by a drone, making a mockery of Donald Trump’s efforts to broker an ‘energy ceasefire’.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f39c77342-d62f-431b-99f9-d604fb915fd2_1522x840.gif)](https://www.energyflux.news/p/sudzha-burns) --- # Episode transcript: (00:00:19): Hi there, and welcome back to Energy Flux On Air. (00:00:23): I'm your host, (00:00:24): Seb Kennedy, (00:00:25): founding editor of Energy Flux, (00:00:27): the energy newsletter analyzing European natural gas and global energy markets (00:00:33): through the lens of Europe's energy transition and global geopolitics. (00:00:37): I'm doing something a bit different on this episode. (00:00:41): I'm going to dedicate almost the entire show to a single listener question. (00:00:46): It's such an interesting topic and doing it justice requires quite a lot of explaining, (00:00:52): especially in the current regulatory environment. (00:00:56): So without further ado, the question comes from Mark in Hertfordshire. (00:01:00): He says, Hi Seb, love the show. (00:01:02): Can you give us your take on the Nord Stream 2 insolvency proceedings? (00:01:07): How should we square the circle of the stay of execution granted by the Swiss (00:01:12): Bankruptcy Court with the EU's proposed Russian gas ban? (00:01:17): Well, thanks for the question, Mark. (00:01:19): Nord Stream 2's insolvency saga is like the latest chapter in an endless legal (00:01:26): thriller full of action and suspense with geopolitical twists. (00:01:31): The Russian gas ban proposed by the EU that you referred to adds a fresh layer of (00:01:36): complexity and uncertainty into an already fraught outlook for this piece of (00:01:41): critical infrastructure. (00:01:43): So I'm going to unpack the key elements of the legal situation before then going on (00:01:48): to look at the Russian gas ban itself and how the two fit together to understand (00:01:53): where the pipeline might be headed and what it all means for European energy markets. (00:01:59): But first, just some brief background facts on Nord Stream 2 for unfamiliar listeners. (00:02:07): So, (00:02:07): Nord Stream 2 is a twin undersea pipeline built to carry up to 55 billion cubic (00:02:14): metres of Russian gas per year directly from Russia to Germany under the Baltic Sea. (00:02:20): And it ran alongside an operational project called Nord Stream or Nord Stream 1. (00:02:26): It cost about 11 billion euros to build and was and is fully owned by Gazprom, (00:02:33): but financed by five Western lenders, (00:02:37): energy companies Uniper, (00:02:38): Wintershell, (00:02:39): Deo, (00:02:39): Shell... (00:02:40): OMV and ONGIE. (00:02:42): They financed about half of the construction costs through loans rather than equity, (00:02:46): and they ponied up about 700 billion euros each. (00:02:50): But Gazprom owns 100% of the share capital of Nord Stream 2 AG, (00:02:56): which is the Swiss incorporated holding company for the Nord Stream 2 project. (00:03:02): Nord Stream 2 has been a real political flashpoint. (00:03:05): Construction was completed in 2021, but it was never commissioned. (00:03:10): Germany halted its launch in February 2022 amid Russia's full land invasion of (00:03:15): Ukraine and Western sanctions. (00:03:18): One of its twin pipes was sabotaged in 2022, (00:03:21): of course, (00:03:22): alongside the two operational strings of Nord Stream 1 in that dramatic subsea (00:03:27): detonation that was worthy of a James Bond spy movie. (00:03:31): And the insolvency proceedings, (00:03:34): they relate to effectively the undamaged single string of Nord Stream 2, (00:03:40): because without operations and shrouded in sanctions, (00:03:44): then the holding company, (00:03:47): Nord Stream 2 AG, (00:03:49): was to all intents and purposes bankrupt, but not officially so. (00:03:54): So a court in the Swiss canton of Zug in Switzerland opened the restructuring (00:04:01): rather than liquidation proceedings in early 2023. (00:04:05): and granted successive moratoriums until the 9th of May last week, (00:04:11): when it approved a debt restructuring plan. (00:04:15): And that's a little bit like Chapter 11, the US bankruptcy protection process. (00:04:20): This is a key asset that's been a focal point, (00:04:23): a flashpoint for political arguments across the EU and the rest of Europe for many years. (00:04:30): And the reigning line, (00:04:32): single line, (00:04:32): that can carry up to about 27 billion cubic metres of gas per year is essentially (00:04:38): the principal asset that's being the subject of potentially being auctioned or (00:04:43): refinanced or restructured or sold under the supervision of that Swiss court. (00:04:49): So the court itself approved this debt restructuring deal, (00:04:55): and that essentially spared Nord Stream 2 AG, (00:04:58): the Gazprom-owned holding company, (00:05:00): from official bankruptcy. (00:05:01): Small creditors were paid off in full, (00:05:03): and the claims of those major European lenders like Shell and Winter Shaldea (00:05:09): they were effectively elevated above the claims of Gazprom. (00:05:13): And this is a really interesting point, (00:05:15): because apparently the shareholder voting rights that Gazprom held in Nord Stream 2 AG, (00:05:22): they have, (00:05:22): to all intents and purposes, (00:05:24): been suspended, (00:05:25): which means that if the pipeline is sold, (00:05:29): then Gazprom, (00:05:31): as an equity holder and a debtor to those European lenders, (00:05:35): will only get anything after all the creditor claims are paid off. (00:05:40): And that's really important because, (00:05:42): you know, (00:05:42): if it cost them $11 billion to build and that was for two strings, (00:05:47): then, (00:05:47): you know, (00:05:49): how much can you realistically expect to get for one string in the context that I'm (00:05:53): about to describe where Russian gas is... (00:05:57): facing immense hurdles and is not entirely likely to return to the European markets, (00:06:03): potentially ever, (00:06:04): or at least for many years. (00:06:07): So these Western creditors have about 700 million euros each claim over Nord Stream (00:06:12): 2 AG and the infrastructure that it owns. (00:06:16): And they're very much now in the driving seat. (00:06:19): So this restructuring procedure has really kind of turned the tables over the power (00:06:25): and control over the fate of Nord Stream 2. (00:06:30): Because before Gazprom really called the shots as the sole shareholder, (00:06:34): but now it seems that the Western creditors have a bit more of the upper hand. (00:06:37): That said, they do have an aligned interest. (00:06:40): I think that both sides would like to kind of get something back from this, (00:06:45): you know, (00:06:46): immensely expensive white elephant that's been half blown up on the bed of the (00:06:51): Baltic Sea. (00:06:52): But quite how they go about doing that could soon see their interests diverge. (00:06:56): And that's when the power play could come into effect because we've seen... (00:07:00): interest from a US investor, (00:07:02): this kind of mysterious chap called Stephen Lynch, (00:07:05): who cropped up last year, (00:07:07): said he wants to buy the pipeline for quote-unquote pennies on the dollar, (00:07:10): which would flip control over this critical asset to Western Australia. (00:07:15): into Western hands, (00:07:16): allow Washington to essentially hold a stranglehold over Russian gas flows into Europe, (00:07:24): which is kind of an interesting geopolitical twist on the future energy and (00:07:29): security arrangements for Europe. (00:07:32): i think it's a bit fanciful really because you know like nordstrom 2 it never (00:07:36): received german certification so it wasn't allowed to start up and the eu's gas (00:07:43): directive which is an important regulation that adds a hurdle to operating (00:07:49): nordstrom 2 and so like pipelines that enter the the eu single energy market they (00:07:55): must separate (00:07:57): the legal ownership of the pipeline from the physical gas supply of the gas that (00:08:02): the pipeline is carrying. (00:08:03): So you can't own the pipeline and the gas supply entirely. (00:08:06): And that's actually why the Western energy companies opted for a financing role (00:08:12): rather than taking shareholder stakes. (00:08:14): They all wanted (00:08:15): rights on Nord Stream 2 and to own the molecules flowing through the pipe. (00:08:19): And they couldn't have that if they owned stakes in the Nord Stream 2 AG operating (00:08:25): company as well. (00:08:26): So that's why we're in this situation now. (00:08:31): So what's going to happen? (00:08:33): Well, it's worth recalling at this stage that Gazprom has a lot of legal baggage. (00:08:38): There's about 13 billion euros in unsettled arbitration claims. (00:08:44): from Uniper, (00:08:45): which is one of the creditors, (00:08:46): to Nord Stream 2 AG for non-delivery of gas under their previous long-term contract. (00:08:52): So you can imagine a third-party buyer wants to come in, (00:08:57): take control of this potentially operational single string of Nord Stream 2, (00:09:03): But then all the gas revenues could be seized because, (00:09:07): you know, (00:09:07): Gazprom owes a lot of money to Uniper and hasn't paid up for cutting off gas in the (00:09:12): 2021-2022 crisis invasion period. (00:09:13): So that's probably going to be (00:09:19): A bit of a minefield, really, for any new owner of the infrastructure. (00:09:22): And then back to Mark's question, (00:09:24): you know, (00:09:24): what about this new element, (00:09:26): the EU's Russian gas ban? (00:09:28): How do you square the circle of the, (00:09:31): you know, (00:09:31): the kind of lifeline to Nord Stream 2's potential resuscitation with the fact that (00:09:36): Brussels is floating a quite serious sounding plan to actually... (00:09:41): outlaw the supply or delivery or trade of russian gas within the eu and that could (00:09:46): start as soon as the end of this year so they they published a roadmap last week (00:09:51): almost around about the same time as the insolvency ruling which was kind of an (00:09:55): interesting timing for that then this roadmap says there'll be no spot sales and no (00:10:01): new contracts after 2025 for russian gas (00:10:05): And it's pretty sweeping, the way it's been proposed. (00:10:08): It's quite bold, (00:10:10): and it seemed to catch a few commentators by surprise for its boldness, (00:10:16): because it would, (00:10:17): if passed, (00:10:18): rule out any flow of Russian origin gas along Nord Stream 2 or any other pipeline. (00:10:24): regardless of who owns the pipeline and obviously you can't change where nordstrom (00:10:30): 2 starts or ends you know it is a fixed piece of infrastructure so it's very (00:10:36): difficult to put anything down that pipe into europe that's that's not russian gas (00:10:41): So if this gas ban comes into effect, (00:10:44): then it's very difficult to see how Nord Stream 2 has any value whatsoever. (00:10:48): But, and there's always a but with these things, of course, isn't there? (00:10:51): The Russian gas ban, well, it hasn't been implemented yet. (00:10:54): And when you start to look at it, you start to think, well, actually... (00:10:58): There could be a lot of compromises. (00:11:00): I mean, (00:11:00): I think the European Commission's proposing it because they want to get ahead of (00:11:06): any possible settlement over Ukraine, (00:11:08): which I'll get onto as well a bit later on. (00:11:12): They want to kind of close the door on Russian gas coming back as part of a peace settlement. (00:11:16): But we've already seen how Russian energy products, (00:11:20): Russian commodities, (00:11:22): have managed to skirt around Western sanctions. (00:11:26): Russian gas could conceivably be rebranded by doing gas swaps, (00:11:31): like pumping the gas into Azerbaijan, (00:11:33): then Azerbaijan. (00:11:34): that freeing up gas that azerbaijan produces for its domestic market to then export (00:11:38): through you know the southern gas corridor or the same with turkey as well because (00:11:42): turkey is a massive kind of transit route for for russian gas because they have the (00:11:47): turkstream pipeline that runs under the black sea and that's now the main entry (00:11:51): point for for russian gas indirectly into the eu through turkey so they could just (00:11:55): send more russian gas through uh through turkey and you (00:11:59): essentially kind of whitewash it of its origins, (00:12:01): and then Turkey's even saying they signed an agreement with Romania after the (00:12:07): Russian gas ban was proposed. (00:12:09): They signed this kind of high-level political agreement, (00:12:11): the leaders of Romania and Turkey saying that Romania's going to start buying (00:12:15): Turkish gas now. (00:12:17): which seems like quite an affront to the European Commission, (00:12:19): because it's really blatantly not going to be Turkish gas. (00:12:23): I think Turkish gas, if I recall right, only supplies about 5% of Turkish domestic gas needs. (00:12:30): So it's kind of like, well, guys, where are you going to get the gas from then? (00:12:34): You've got this kind of massive Russian gas pipeline coming across the Black Sea, (00:12:39): and Turkey's going to provide entirely Turkish gas to Romania. (00:12:43): Right, yeah, sure, okay. (00:12:45): All right, (00:12:45): anyway, (00:12:46): so, (00:12:46): you know, (00:12:46): like, (00:12:47): there is this possibility that, (00:12:49): you know, (00:12:49): Russian gas will be rebranded in some form or another and still find its way into (00:12:54): European markets. (00:12:55): The big question is really, (00:12:56): like, (00:12:57): you know, (00:12:57): the ban, (00:12:58): if it's introduced, (00:13:00): then, (00:13:00): like, (00:13:00): how fiercely will it be policed? (00:13:02): Does it rest on member states' willingness to enforce it? (00:13:05): Because, (00:13:06): you know, (00:13:06): judging by Romania's attitude, (00:13:07): then it sounds like they'd be quite happy to kind of go along with the charade that (00:13:11): Turkish gas is Turkish and it's not actually Russian gas. (00:13:15): And I'm sure there'll be lots of other member states who are quite willing to flout the ban. (00:13:18): I mean, Hungary, Slovakia, they're all very kind of Russia-friendly, aren't they? (00:13:23): And they'd quite happily get their hands on, you know, non-Russian Russian gas if they could. (00:13:29): So, (00:13:29): you know, (00:13:29): it's like, (00:13:31): how can the EU trace and crack down on Russian gas swaps with these countries? (00:13:35): It's, (00:13:37): you know, (00:13:37): it's hard to see it not being laundered to avoid being penalised by these new rules. (00:13:42): And there are other questions as well. (00:13:44): So if it's like a selective ban against a single country's exports, (00:13:48): does that expose the EU to a Russian challenge before the World Trade Organization? (00:13:54): Because that kind of could flout the TO rules to enabling free and fair trade. (00:13:58): That's an unanswered legal question. (00:14:02): um and and i think there's like the biggest question of all really is and i think (00:14:07): this is kind of what the ban is intended to address is you know what happens if (00:14:13): there's a peace deal in ukraine which puts russian gas exports at the heart of any (00:14:19): agreement between the sides you know if there's if there's a kind of negotiated (00:14:24): settlement and the big prize for moscow is that it gets some of its european market (00:14:29): back (00:14:29): for gas and maybe other energy products as well, (00:14:33): then it's hard to see how this Russian gas ban can really be enforced, (00:14:40): or quite how that would play out in the negotiating table. (00:14:43): And the other aspect of this as well, (00:14:45): of course, (00:14:45): is that Ukraine itself is in a really, (00:14:48): really difficult energy situation. (00:14:50): It's a war-torn country. (00:14:52): struggling to replenish its severely depleted gas storages they went as low as (00:14:56): about three percent i think over the winter and they haven't been replenished much (00:15:01): yet so far at this early stage of the refilling season and my understanding is that (00:15:05): pipeline access into ukraine is actually quite constrained by very high border (00:15:11): tariffs from southeast europe and limited interconnector capacity availability from (00:15:16): poland (00:15:17): So, (00:15:17): you know, (00:15:19): an EU ban on Russian pipeline gas, (00:15:22): if effective, (00:15:23): could actually force Ukraine to turn to Russian gas to help meet its domestic needs (00:15:28): and refill those gas storage facilities. (00:15:30): And that would really weaken Kiev's negotiating hand at a critical moment in the conflict. (00:15:35): So there are a lot of really kind of knotty, (00:15:38): difficult trade-offs at the heart of this Russian gas ban that make you wonder if (00:15:43): it could really be introduced and enforced as the Commission is proposing. (00:15:48): So just to summarise, (00:15:49): I'd say, (00:15:49): well, (00:15:49): an EU ban on Russian gas could be very leaky, (00:15:53): but I would say that the ultimate fate of Nord Stream 2 is probably bound up in the (00:15:59): Ukraine peace talks, (00:16:00): which means it's not really in Europe's hands, (00:16:03): because Europe isn't really in the driving seat when it comes to Ukraine. (00:16:06): Obviously, they are a material actor, but... (00:16:10): The big players are the US, (00:16:13): Russia and Ukraine, (00:16:14): of course, (00:16:14): because Ukraine can continue fighting as long as it has access to weaponry, (00:16:19): although that could be curtailed again if the US and Russia agree some sort of deal (00:16:26): and they could turn the pressure on to the Ukrainians to force them... (00:16:29): to stop fighting by cutting off access to military intelligence and to US weapons. (00:16:34): Well, you know, that could, again, turn the tables on the battlefield, couldn't it? (00:16:39): But, you know, the war is dragging on. (00:16:41): There are putative talk going on between Moscow and Washington, (00:16:44): but apparently getting nowhere, (00:16:45): as far as I can tell, (00:16:47): from the outside. (00:16:47): Apparently, (00:16:48): due primarily to the Kremlin's intransigence on a bunch of totally unrealistic red (00:16:54): lines that... (00:16:55): I won't get into here, but essentially they want Ukraine on a platter. (00:16:58): And I think that even the kind of Kremlin-friendly administration in the White (00:17:03): House is kind of struggling to sell that to anybody but the most ardent kind of (00:17:10): Russiophiles who seem to be running amok. (00:17:12): at the moment in the halls of power in washington so where's it all going to go i (00:17:16): mean peace you have to think peace in ukraine it will have to prevail in some form (00:17:20): or another it might be a kind of ugly unstable unsustainable unenforceable and (00:17:26): highly damaging peace deal that really undermines european security interests for (00:17:31): decades to come but a deal of some description perhaps that kind of a deal would (00:17:36): almost certainly have to be done (00:17:38): at some point, because everybody loses in a stalemate, which is essentially what we're in now. (00:17:43): I don't think either side wants to get bogged down in a forever war, (00:17:46): but I mean, (00:17:47): I guess at the same time, (00:17:48): the way things are going, (00:17:49): you can't rule that out either. (00:17:51): Where does that leave us? (00:17:52): Well, I think it's worth mentioning, just to take a step back, (00:17:55): And to think about Nord Stream 2 and why it was built in the first place. (00:18:00): I mean, (00:18:01): Nord Stream 2 was proposed and built by Russia alongside Nord Stream 1 as a means of, (00:18:07): for the Russian side, (00:18:08): cutting Ukraine out of the equation. (00:18:11): Because Ukraine, of course, earned many billions of euros in transit fees prior to 2022. (00:18:19): And just by having this very elaborate and high-capacity transmission system that (00:18:25): connected Russian, (00:18:27): Siberian gas-producing fields with these kind of prized premium European markets, (00:18:33): then they were the middleman. (00:18:34): And they took a cut, (00:18:36): essentially, (00:18:36): for the kind of rentier economy arrangement, (00:18:40): where it was just... (00:18:41): just like money flooding into Ukraine. (00:18:44): And I've been told, (00:18:45): and I've never been to Ukraine, (00:18:46): never been to Kiev, (00:18:48): but I've been told that these immense checks just dropping into Kiev, (00:18:51): they fostered a real kind of sprawling, (00:18:54): parasitic kleptocracy that was just completely riddled with corruption. (00:18:58): I've heard it described as a kind of mafia organisation that just sprung up to gorge on these (00:19:04): Russian gas transit fees over the years and that was one thing that EU leaders (00:19:09): pretty much turned a blind eye to, (00:19:11): along with so much else in the years leading up to Russia's annexation of Crimea in 2014. (00:19:17): And I think that the Russian side got sick of kind of bankrolling these mafia types (00:19:22): in Kiev and wanted to cut them out of the equation. (00:19:24): They wanted to just bypass Ukraine (00:19:26): And probably strategically so that they could then think about, (00:19:30): you know, (00:19:30): then exerting their will over Ukrainian sovereignty and eventually planning an (00:19:35): invasion of various bits, (00:19:37): the annexation of Crimea and then the full land invasion. (00:19:39): They wanted to kind of take Ukraine back. (00:19:41): One way of doing that or one of the many steps leading up to being able to do that (00:19:46): was to kind of end their access to Russian gas transits. (00:19:50): which of course did eventually finally come to an end on the 1st of January this year. (00:19:55): Russian transits of gas through Ukraine have halted. (00:20:01): And so, (00:20:01): you know, (00:20:01): that is another loss of revenue for Ukraine in this war, (00:20:05): which was kind of crazy to think that they were still earning Russian transit (00:20:10): revenues for a couple of years after the invasion in February 2022 for transiting (00:20:15): Russian gas to European buyers, (00:20:16): just like they always had done. (00:20:20): There's another side note that's relevant in this story. (00:20:24): Everyone says that rushing gas is cheap, but that's a myth. (00:20:28): Remember that liquefied natural gas, (00:20:30): so LNG from global suppliers, (00:20:33): was introduced into Europe as a means of holding Gazprom's feet to the fire in (00:20:38): contractual negotiations, (00:20:40): because in its heyday Gazprom sold gas to lots of EU utilities and industrials (00:20:45): under these (00:20:46): kind of premium priced oil indexed long-term contracts that were often priced above (00:20:52): the prevailing market rate on the dutch title transfer facility which is the the (00:20:57): benchmark spot trading venue in the netherlands for for natural gas and the (00:21:03): reference price for europe so when when the spot market evolved um the introduction (00:21:08): of competition and liberalization it did what it was supposed to do which was to (00:21:11): kind of you know more competition increases market efficiency and that kind of (00:21:16): classic (00:21:17): kind of market economics 101 playbook which is the you know diversity of diversity (00:21:22): of sources and breaking down these rigid state structures and and breaking open (00:21:28): this closed house of bilateral trade between state-backed actors having lots of (00:21:32): dynamic private capital flow in and (00:21:35): and then having lots of interesting innovation in financial instruments and futures (00:21:39): trading and all the stuff that I monitor in energy flux like that, (00:21:42): that did lower prices. (00:21:43): So for a very long time, (00:21:44): the spot price of gas was on the CTF was much lower than the price that European (00:21:51): buyers had to pay gas from under those oil index contracts. (00:21:54): And of course, (00:21:55): Vladimir Putin did like troll the EU for pursuing this strategy of liberalizing (00:22:01): European gas markets. (00:22:02): So like, you know, (00:22:03): be careful what you wish for and it was it was somewhat prophetic because obviously (00:22:09): when the the market conditions changed they changed dramatically so Gazprom went (00:22:14): from being one of the most expensive suppliers to being one of the cheapest when (00:22:19): the spot market went absolutely crazy during the 2021-2022 energy crisis which of (00:22:25): course Gazprom helps to engineer it's worth adding by withholding (00:22:29): volumes from the European gas market which it was used to sending and allowing its (00:22:35): own gas storage facilities which it owned and controlled in Germany allowing those (00:22:40): to deplete so leaving Europe's biggest economy in a really kind of parlous energy situation. (00:22:47): During the refilling season of 2021, (00:22:49): that was all part of this premeditated campaign to destabilise the European energy (00:22:55): market and to weaponise its use of gas, (00:22:57): all obviously as a prelude to the full land invasion of Ukraine. (00:23:03): so that's a little bit about the background of russian gas and how it's not really (00:23:07): like the cheap thing it's always described as being and like the raw the (00:23:10): reintroduction of russian gas oh we need our cheap russian gas oh our poor (00:23:13): industrials they're all they're all going bankrupt they're all suffering because we (00:23:16): don't have russian gas anymore anymore it's like well actually it's not quite how (00:23:20): things were and i think the eu policy of like diversifying gas sources (00:23:26): or just diversifying energy sources in general but even within gas like having (00:23:30): pipelines from algeria global lng supplies having lots of lng terminal (00:23:36): regasification capacity and then having lots of trading within the eu of different (00:23:42): gas sources i think all of that stuff it's all vitally important isn't it to (00:23:46): building resilience into the system you know this kind of single (00:23:50): point supplier reliance is um it's just a recipe for vulnerability which can then (00:23:56): be exploited for geopolitical advantage and that's another big question that sort (00:24:00): of hangs over the russian gas ban because you know there's i think i think there's (00:24:06): about 20 30 billion cubic meters per year of gas still entering the eu from russia (00:24:12): indirectly through that turkstream pipeline i mentioned (00:24:15): And like, you know, how's that going to be replaced? (00:24:17): Is it just going to be mopped up by the other kind of dependency which EU has, (00:24:23): which is on US LNG? (00:24:25): So American liquefied natural gas or Qatari liquefied natural gas. (00:24:29): Is it just going to swap one dependency for another or exacerbate the dependency on (00:24:33): those two big suppliers? (00:24:34): It's difficult to know, isn't it? (00:24:36): But it's hard to see there being really that many options. (00:24:39): Like who else can really ramp up? (00:24:41): supply to uh to meet that demand if of course that demand remains and that's (00:24:46): another important kind of part of the story which i won't get into too much but you (00:24:49): know european gas demand is on secular decline slope so it's hard to see that the (00:24:55): kind of demand profile being particularly resilient for all the topics i mentioned (00:25:00): on previous episodes so the outlook is is a bit shaky on that front (00:25:04): But yeah, (00:25:04): essentially, (00:25:05): so the whole gas story and the Nord Stream 2 story is all so bound up in European (00:25:12): geopolitics and relationships between the EU and Russia. (00:25:18): Bearing in mind everything that's happened in recent years, (00:25:21): it's quite understandable for there to be a very strong political consensus across (00:25:28): European capitals against resuscitating that dependency on Russian... (00:25:33): in particular, (00:25:35): I mean, (00:25:35): you know, (00:25:36): when the gas prices spiked to, (00:25:39): what was it, (00:25:41): about 300 euros per megawatt hour in 2022 after the invasion, (00:25:45): then anybody who was holding oil indexed contracts with Gazprom was able to make (00:25:50): just these obscene profits by reselling those same molecules that were priced on a (00:25:57): Brent slope into this red hot spot market. (00:25:59): The margins were just... (00:26:01): phenomenally it's like winning the lottery a million times over every single day (00:26:05): and that dual pricing structure was really revealed for what it was you know it was (00:26:09): allowed both european gas buyers and gas from itself to sort of manipulate the (00:26:13): market and rake in huge war profits during the early months of the war before of (00:26:17): course gazprom cut off flows as part of the kremlin's multi-dimensional war (00:26:21): campaign against the west and the european in particular (00:26:26): So the scars of 2021, (00:26:28): 2022, (00:26:28): they're still very raw, (00:26:31): and I don't think anybody's forgotten the pain that was heaped upon consumers, (00:26:35): ultimately, (00:26:36): by Russia's weaponisation of gas, (00:26:38): and all the political fallout from that, (00:26:41): because obviously, (00:26:42): you know, (00:26:42): that... (00:26:43): that kind of upsurge in in energy costs that were all rooted from the gas price (00:26:48): crisis of 2021-2022 that's all fermented all this discontent among socially (00:26:54): deprived communities across europe where you know you've then seen uh you know (00:27:00): these kind of de-industrialized forgotten communities just turning into the (00:27:04): breeding ground for the kind of populist far right and this (00:27:09): really quite kind of worrying trends towards authoritarianism and this neo-populism (00:27:14): that's creeping at the edges of European democracy and threatening to undermine it (00:27:20): at any given moment. (00:27:21): And I think that the energy story is a key element to that trend. (00:27:26): And there is one final element I'd like to discuss around the whole kind of energy (00:27:33): gas weaponization theme, (00:27:35): and it's something that Energy Flux covered in a recent Deep Dive article, (00:27:39): and that's how Russian forces are now systematically using the gas weapon in a (00:27:45): different way, (00:27:46): and that's to destroy Ukraine's ability to produce its own domestic gas resources (00:27:51): and weaken Kiev's hand at this critical moment in the conflict. (00:27:55): I won't go into that in too much depth, (00:27:57): but I just raised that point to kind of underscore why there's so much resistance (00:28:03): to this idea of allowing Russian gas back in again and why the ban has been (00:28:07): introduced now in the way it has been or is being introduced and proposed. (00:28:12): But the Ukraine gas production story, that really is a very separate story to Nord Stream. (00:28:17): And it's worth reading as well. (00:28:19): So you can read that story in full on the Energy Flux website. (00:28:23): Just go to www.energyflux.news and don't forget to sign up for a subscription while (00:28:30): you're at it. (00:28:32): In conclusion, I'd say that Nord Stream 2's fate, or its likely fate, is probably just a (00:28:38): sort of quite sorry end really as a as a kind of stranded asset i mean i think (00:28:43): barring just a phenomenal geopolitical u-turn then north stream 2's intact pipeline (00:28:50): will probably just gather rust at the bottom of the baltic sea eu ban german (00:28:56): opposition sanctions they all leave very little room for a revival and there has (00:29:01): been some chatter around repurposing it for hydrogen making it part of europe's (00:29:06): hydrogen backbone which (00:29:07): I definitely won't get into now, (00:29:09): but it's technically possible, (00:29:10): but eye-wateringly expensive, (00:29:12): and the market really just isn't there, (00:29:14): isn't ready for that kind of investment now. (00:29:16): So the pipeline's really an 11 billion euro relic, (00:29:19): symbol of Europe's sort of energy divorce from Russia, (00:29:22): if you like. (00:29:23): I'd say the legal and political barriers are thicker than Baltic ice, (00:29:28): and the less the peace talks rewrite the rules, (00:29:30): then this pipeline's future is, (00:29:33): pardon the pun, (00:29:34): deep underwater. (00:29:36): So, Mark, thank you. (00:29:38): What a great question and really enjoyed getting into the weeds of that one. (00:29:42): And remember, (00:29:43): if you want to have your own energy question answered in depth on the Energy Flux (00:29:47): On Air podcast, (00:29:49): then go take out a subscription. (00:29:51): Head on over to www.energyflux.news. (00:29:55): You can sign up for free emails just to kind of get a feel for what it's like. (00:29:59): But if you want to get all of the exciting analysis, (00:30:01): all the deep dives, (00:30:02): all the charts, (00:30:03): the EU LNG chart deck, (00:30:05): You want to be able to comment on all the posts, (00:30:08): join the community, (00:30:09): raise questions for the pod, (00:30:11): then take out a paid subscription. (00:30:13): All the details are on the website. (00:30:15): And all I can say is go check it out. (00:30:17): Thank you for listening. (00:30:18): It's been a joy as ever. (00:30:21): And I'll see you again next time. ### Zombie bulls twitch back to life URL: https://www.energyflux.news/zombie-bulls-twitch-back-to-life/ Last updated: 2025-06-17T09:27:39.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/eff0e40a-5e40-40f8-9be9-c25881e00999_1349x445.png) **Are investment funds rising from the ashes of the 2024 bull run? After months of relentless selling, Dutch TTF futures twitched to life this week as Brussels unveiled plans to sever ties with Russian energy imports by 2027 — a move greeted as a bullish spark.** [Subscribe now](https://www.energyflux.news/subscribe) The European Commission’s [roadmap](https://energy.ec.europa.eu/publications/communication-roadmap-towards-ending-russian-energy-imports%5Fen?ref=energyflux.news) to halt Russian energy imports is more ambitious than anticipated. Gas and LNG spot deals and new long-term contracts could all be halted by the end of this year, and existing ones phased out by end-2027\. The narrative reversal is palpable. Not so long ago, the return of Russian gas to Europe was being widely discussed as part of putative Ukraine peace talks that have since stalled. Now, Moscow’s methane might never return to the troubled Old Continent. Spooked by this U-turn, front-month TTF duly leapt 6% on Tuesday to settle at a two-week high of €34.74/MWh before racing above €35 in intraday trading on Thursday. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/9c4ed9cd-9330-4cad-9c10-dec97b853e4f_4018x2064.png) For some, mid-€30s TTF is oversold territory. For others, it is merely a dip into a price range that (just about) incentivises the refilling of EU storage caverns. The ‘oversold’ crew might be feeling vindicated. But this nervous uptick reeks less of revival and more of a dead cat bounce. Bullish hedge funds, ever the opportunists, are almost certainly diving back into long positions, lured by the siren song of fresh geopolitical drama. Their enthusiasm will collide with an inconvenient truth: frothy narratives based on improbable scarcity fears don’t have the same cut-through in the shoulder season, when demand sags and panic over dwindling gas stocks dissipates. I’ve [said this before](https://www.energyflux.news/p/phase-shift), but the facts of the recent selloff bear repeating: hedge funds torched a staggering 227 TWh of speculative net length since February, dragging prompt TTF prices down 40% from their winter peak. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ea13547b-d5b6-4a85-80f7-e66ea55ddc43_1536x1024-2.png) **Some things never truly die. Image by Sora* Acting as if none of that really happened, the market wasted no time pricing in the total loss of all Russian molecules as if it were a *fait accompli* — while apparently ignoring the imminent relaxation of storage refilling targets. The EU Parliament voted yesterday in favour of the Commission’s new gas storage regulation, which — pending final negotiation — is highly likely to take the heat out of the summer 2025 procurement season. This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) dissects the latest TTF histrionics by weighing up the push-pull price effect from (bearish) new storage targets and a (bullish) mooted Russian energy ban. Looking beyond the exaggerated prompt price action, the regulatory interplay between these two uncertainties could recast the winter risk calculus and reshape the TTF forward curve in subtle ways. Let’s dive in. 💡 *Elevate your understanding of gas markets with fiercely independent market analysis.* [*Sign up now*](https://www.energyflux.news/subscribe) *for full access to original, actionable insights backed up by hard data.* [Subscribe now](https://www.energyflux.news/subscribe) đŸ’„ *Article stats: 2,200 words, 10-min read, 10 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The storage-speculation nexus (part 3) URL: https://www.energyflux.news/the-storage-speculation-nexus-part/ Last updated: 2026-02-05T20:38:37.000Z **The EU gas market is in the doldrums, and so are the hedge funds that rode the baseless 2024 TTF bull run up to the stratosphere and back down into the ground.** [Subscribe now](https://www.energyflux.news/subscribe) The bullish thesis that propelled European gas prices to within a whisker of €60/MWh at the start of this year has completely unravelled. Investment funds banking on a re-run of the 2022 energy crisis unwound the bulk of their net long position in a head-spinning few weeks. The seeds of the correction were sown when, rather amazingly, European politicians actually sat up and took notice of perverse price signals on the Dutch Title Transfer Facility (TTF). When the Summer 2025 TTF seasonal contract started trading above Winter 2025-26, the routine calculus of buying cheap summer gas and stashing it away until the premium-priced winter months was turned on its head. The inverted summer-winter TTF spread made such a mess of the economics of refilling Europe’s network of vast underground natural gas storage caverns that the problem became impossible to ignore. ## Speculator’s charter Fingers were soon pointing at the EU’s rigid gas storage regulations, which set interim gas refilling targets every two months from 1 February to 1 September, and a final target of 90% by 1 November. The fact that storages were being depleted faster than usual over winter added a sense of panic to this perverse situation. As winter dragged on, it became clear that the storage targets had become a speculator’s charter. Mandating procurement at an established trajectory every summer regardless of market conditions turned price *in*sensitive storage operators into sitting ducks for predatory hedge funds. Armed with knowledge of likely procurement volumes and timings, money managers poured speculative capital into long summer positions in a bid to corner the refilling market. This elevated the summer price above winter, making gas storage a lossmaking exercise. Calls to relax the targets intensified as the spread inversion widened, and the movement achieved [political buy-in](https://www.energyflux.news/p/regulatory-schizophrenia) early in the New Year. The direction of travel was set, and the regulatory cover for holding summer length was blown. The mere suggestion to relax 2025 restocking targets [knocked the legs out](https://www.energyflux.news/p/the-bear-roars) from under the ‘tight summer gas market’ narrative that had driven so much speculative capital into absurdly long TTF positions. Donald Trump’s ‘Liberation Day’ trade war nonsense was the icing on the bears’ cake. By the time the EU Parliament voted in April to lower the bloc’s 1 November target to 83% and to abolish intermediate targets, **the storage-speculation nexus that had underpinned bullish momentum had already been severed.** [Subscribe now](https://www.energyflux.news/subscribe) Since February, prompt TTF prices are down more than 40% and fund net length culled by three-quarters. With gas storages now refilling at a decent clip, the critical questions facing the market are: > **đŸ’„ How did hedge funds reposition along the TTF strip during the selloff?** > > **đŸ’„ What does current fund positioning tell us about 2025-26 seasonal price dynamics?** > > **đŸ’„ Has upward price risk vanished entirely, or merely shifted from summer to winter?** This [**Deep Dive**](https://www.energyflux.news/t/deep-dive) answers those questions with hard data. How? By analysing TTF traded volumes and hedge fund length to identify where residual length in speculative portfolios is now concentrated. The Commitment of Traders report is like the Rosetta Stone for TTF. But the raw data tells only half the story: the net position gives no indication of which TTF futures contracts on the forward curve are being bought or sold from week to week. Deciphering the CoT report fully requires an extra level of analysis. This post – the third instalment in a subscriber-only multi-part series – does exactly that. 1. [**Part one**](https://www.energyflux.news/p/the-storage-speculation-nexus) identified the possible link between storage targets and speculation (August 2024) 2. [**Part two**](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) used regression analysis to prove the storage-speculation hypothesis (December 2024) 3. **Part three** (this post) uses the same technique to **dissect the Q1 TTF selloff** and **assess seasonal price risk** for 2025-26 If you trade TTF or highly correlated power/carbon futures, or have material exposure to European energy price movements, then this post is essential reading. Subscribe now for full access. [Subscribe now](https://www.energyflux.news/subscribe) **đŸ’„** *Article stats: 2,000 words, 10-min reading time, 10 charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### That Friday feeling URL: https://www.energyflux.news/that-friday-feeling/ Last updated: 2025-05-14T14:59:56.000Z Pexapark podcast, Iberian blackout culture war, US-Ukraine mineral deal, trade war thaw _This post is for paying subscribers only._ ### 🎧 Fickle trade war takes its toll on LNG demand URL: https://www.energyflux.news/fickle-trade-war-takes-its-toll-on/ Last updated: 2025-07-20T09:53:09.000Z 🎧 Fickle trade war takes its toll on LNG demand 0:00 /200 1× **The US-China trade war has rewritten the macroeconomic outlook for 2025, and with it the global demand picture for liquefied natural gas (LNG).** [Subscribe now](https://www.energyflux.news/subscribe) Swingeing import tariffs could be lifted just as quickly as they were introduced. However, even a swift resolution at this stage would be unlikely to purge the bearish sentiment now dominating the European natural gas market. This episode catches up on the many market-moving events of recent weeks, with a focus on disruption to energy trade, relaxation of the EU’s gas storage targets, and bearish factors weighing on the summer gas demand outlook. In the reader Q&A, I fielded questions relating to [my recent take](https://www.energyflux.news/p/phase-shift) on the shift to a new lower pricing regime, and the risks posed by a cratering price environment to customers [buying US LNG](https://www.energyflux.news/p/the-big-squeeze). I also share my thoughts on [The New Joule Order](https://www.carlyle.com/global-insights/research/the-new-joule-order?ref=energyflux.news), a thought-provoking essay from esteemed energy commodities analyst Jeff Currie. The full transcript is included below. Thanks for listening, — Seb P.S. Don’t forget to share your questions, thoughts and reactions for inclusion in the next episode. I prioritise input from paid subscribers 😉 [Leave a comment](#ghost-comments-root) --- # More from *Energy Flux*: [The big squeezeDEEP DIVE: US LNG margins are about to be crushed by immense cost & price pressures![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2ff0a72eca-bc2e-4bd2-8c71-37f30c128869_1024x608.jpg)](https://www.energyflux.news/p/the-big-squeeze) [Phase shiftWe are past the point of no return. The European natural gas market has shifted definitively into a new pricing regime. By extension, so has the global LNG market.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f2d696bf2-8290-4928-be24-0133e5f8840a_1024x608.jpg)](https://www.energyflux.news/p/phase-shift) [Chaos theoryHOT TAKE: Trump’s impossible energy trade demands are a fractal of infinite contradictions![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f5a33e27a-b2e9-4074-bbc7-de26618c8f92_1024x608.jpg)](https://www.energyflux.news/p/chaos-theory) --- # Episode transcript: (00:00:19): Hi there, and welcome back to Energy Flux On Air. (00:00:23): I'm your host, (00:00:24): Seb Kennedy, (00:00:25): founding editor of Energy Flux, (00:00:28): the energy newsletter analyzing European natural gas and global LNG markets through (00:00:34): the lens of Europe's energy transition and global geopolitics. (00:00:38): It's been quite a while since my last episode. (00:00:41): I've been quite busy with the house move, transatlantic travel, Easter break. (00:00:45): So apologies for those of you who have missed energy flux on air. (00:00:50): I've been dying to get back into the studio to talk over everything going on in (00:00:53): energy markets and the global geopolitical panorama. (00:00:56): And I finally found time and I'm hoping to get back onto a more regular recording schedule. (00:01:02): To give a measure of how much time has elapsed since the last episode, (00:01:05): the price of European gas traded on the Tidal Transfer Facility, (00:01:10): that's the TTF, (00:01:11): the European benchmark, (00:01:12): has dropped from more than 43 euros per megawatt hour on the 19th of March to less (00:01:18): than 32 euros at the end of last week. (00:01:21): That's a drop of more than a quarter in barely more than a month. (00:01:25): Since the last episode, (00:01:27): we've had Liberation Day, (00:01:28): the start of a bitter Sino-US trade war with both sides seemingly entrenched, (00:01:34): a stock market shock, (00:01:35): bond markets wavering, (00:01:37): dollar devaluation and a rewriting of both the global macroeconomic script and the (00:01:42): security guarantees. (00:01:43): that underpinned 80 years of global trade since the Second World War. (00:01:48): So TTF settled on Friday below €32 per megawatt hour, (00:01:52): but that's the first time it's been that low in a year. (00:01:55): €32 is approximately $10.80 per MMBTU. (00:02:01): And that sell-off has, (00:02:03): as usual, (00:02:04): correlated quite strongly with a sell-off in hedge fund long positions. (00:02:09): The hedge funds that bet on the future price of TTF, as you'll recall, they had an eye-watering (00:02:16): net long position of 292 terawatt hours and that was in February when the price on (00:02:24): TTF was reaching for 60 euros per megawatt hour we've seen massive liquidations two (00:02:30): big sell-off periods in February and in April April of course being triggered by (00:02:34): the Liberation Day trade war which I mentioned at the start net position went from (00:02:38): 292 terawatt hours to just 86 terawatt hours (00:02:42): or a 15 billion euros long bet to a 5 billion bet. (00:02:48): So essentially the hedge funds have sold off 10 billion euros worth of length in (00:02:54): TTF futures since February. (00:02:57): But I don't think the sell-off has finished. (00:03:00): And the reason I say that is because if you go back 12 months to when TTF was last (00:03:06): trading at around about the 32 euro per megawatt hour mark, (00:03:11): then at that point, (00:03:13): hedge funds had a net bullish position of, (00:03:17): on average, (00:03:17): 62 terawatt hours throughout April 2024. (00:03:20): And we're currently 86 terawatt hours. (00:03:24): So if anything, (00:03:26): you could say that while the momentum is towards further sell-off, (00:03:30): to the extent that the historical correlation between price levels and net position (00:03:35): is an indicator of where equilibrium lies, (00:03:38): then you could argue that (00:03:39): further sell-offs are required to get down to sort of 62-ish terawatt hours. (00:03:44): And depending on how bearish this summer turns out to be in terms of physical demand, (00:03:49): policy changes, (00:03:50): geopolitical developments, (00:03:52): then it's entirely feasible to imagine there being, (00:03:56): I mean, (00:03:56): you know, (00:03:57): the hedge funds, (00:03:57): they do go net short. (00:04:00): um when the market flips extremely bearish so it's not out of the question that the (00:04:04): entire net position could be sold off and hedge funds could start shorting ttf on a (00:04:09): net basis anyway so since the last episode there's also been some interesting (00:04:12): developments on the policy front so the european parliament's energy committee has (00:04:16): voted to lower the eu's gas storage targets to 83 by the first of november and to (00:04:24): scrap the intermediary targets (00:04:26): So you'll recall the EU has this target. (00:04:28): Everybody had to reach a certain percentage fill level every two months throughout (00:04:33): the filling season. (00:04:34): But that's probably not going to matter. (00:04:36): There have been several policy suggestions and proposals and it's all open to negotiation still. (00:04:42): But the direction of travel is very firmly towards a place where it looks like the (00:04:47): gas storage targets essentially are meaningless. (00:04:50): And they're just a guide because... (00:04:53): you know after all is said and done after everybody's negotiated and the (00:04:57): derogations have been issued and the exceptions have been carved out what really (00:05:01): matters is is there a penalty for non-compliance for falling short of your gas (00:05:07): storage fill level and there never really was one and there were measures that (00:05:10): could be taken but there was never actually a financial penalty to be levied upon (00:05:14): the gas storage operators and i did say last year you need to watch their behavior (00:05:18): the gas storage operators to what extent are they going to comply (00:05:22): um and potentially not necessarily bankrupt themselves but you know lose a lot of (00:05:26): money just in the name of compliance with an arbitrary target for refilling these (00:05:31): massive underground gas storage facilities and evidently uh i think when there's no (00:05:37): penalty then it's an easy decision to take you know why would you lose money (00:05:41): storing expensive gas to sell it at a loss in the future and pay all the storage (00:05:45): costs associated with that just to comply with a target which (00:05:49): is only arbitrary and doesn't carry a penalty for non-compliance so i think that (00:05:53): one was quite easy to predict and it seems like it's going to be that way this year (00:05:57): not to say that europe doesn't need to buy gas this summer absolutely does need to (00:06:01): buy gas needs to get some gas into storage for next winter but (00:06:05): The physical panorama in the market is looking relatively loose. (00:06:08): We've got some new LNG projects coming on stream this summer. (00:06:12): The pan-EU scramble to procure gas will not occur in a way that drives up prices, (00:06:19): and there will be probably more measured procurements, (00:06:22): and I think (00:06:23): paying very close attention to the price spreads, (00:06:26): calendar spreads, (00:06:27): to make sure that the gas storage operators aren't taking on an undue amount of (00:06:31): price risk by storing gas at prices they can't then recover their costs from. (00:06:37): So the TTF term structure is now pretty flat. (00:06:41): The negative spreads that were blighting the markets over the kind of tight winter (00:06:47): months when the bull run was in full swing, (00:06:49): those essentially corrected themselves. (00:06:52): So we did have a situation where gas was cheaper in the future than in the present (00:06:58): month or the front month. (00:06:59): And obviously that was a big disincentive for storing because you wouldn't store (00:07:03): something that's going to get less valuable over time and incur costs for doing so. (00:07:07): but still the the signal the market signal for storing gas is very weak you need to (00:07:15): have a sufficient spread between the price of gas at the time of procurement and (00:07:22): the winter months when you're hedging in your sales to obviously cover your costs (00:07:28): your storage costs your cost of capital and hopefully you know to make a margin if (00:07:32): you're a (00:07:33): If you're a commercial player, not all gas storage operators are. (00:07:36): Some are mandated to operate in a strategic way, (00:07:39): but some are commercial operators and they do need to make some money. (00:07:42): But either way, none of them want to lose money. (00:07:43): A negative spread would have implied a loss on storage, which is why there was this... (00:07:49): Debates in Europe about, (00:07:50): well, (00:07:50): do we subsidise the cost of refilling our gas storage facilities? (00:07:54): I don't think that's going to happen now. (00:07:55): It doesn't seem necessary. (00:07:57): And there is a much more relaxed approach to how the gas storage capacity in Europe (00:08:02): should be managed. (00:08:03): That's only a good thing, (00:08:04): because it seems that politicians are taking a much more realistic view to... (00:08:09): how the gas market will pan out over the next sort of 12 to 18 months. (00:08:14): When, (00:08:14): of course, (00:08:15): if you've been reading energy flux, (00:08:16): you'll be aware that my view is very strongly that we're heading towards a new (00:08:21): pricing regime because of the way that the global liquefied natural gas market is (00:08:27): developing with the onset of new supply, (00:08:31): which is coming into the market at a rate that exceeds the rate of demand growth. (00:08:36): So if the supply growth outstrips demand growth, (00:08:38): then you have a loose market where there is a kind of nominal surplus. (00:08:45): And that will just mean that prices have to go lower in order for the market to (00:08:49): find its equilibrium and then for that supply to be soaked up. (00:08:54): And you will see that happen. (00:08:55): You will see price sensitive demand come back into the markets in markets like Bangladesh, (00:09:00): Pakistan. (00:09:00): Pakistan, maybe Vietnam, where you'll see energy imports increase as the price goes lower. (00:09:06): But right now we're seeing, (00:09:08): in terms of the physical balances, (00:09:10): EU energy imports hit a record in the first quarter of 2025. (00:09:13): They dropped off in April. (00:09:15): as demand fell away. (00:09:17): Asian demand is also very soft. (00:09:19): We've seen Chinese imports flagging quite a bit. (00:09:21): Weekly imports of LNG have come in at the lower end of the five-year range since (00:09:26): late 2024 and throughout 2025, (00:09:28): according to data from data provider Kepler. (00:09:31): And Kepler, (00:09:32): in fact, (00:09:32): their analysts ran some interesting figures recently around the way that the softer (00:09:38): macroeconomic outlook was impacting gas markets or likely to impact gas markets. (00:09:43): And while this isn't their central scenario, (00:09:45): they did say, (00:09:46): let's have a look at the worst case macro scenario in combination with the (00:09:49): potential for a cool summer. (00:09:51): So rather than there being lots and lots of heat waves where you have lots of (00:09:56): cooling demand for running air conditioning, (00:09:58): driving power prices crazy and people shipping in LNG vessels to fire those gas (00:10:03): turbines to run the AC units. (00:10:06): If you get a cool summer where that doesn't happen, plus you get like the worst possible... (00:10:11): macroeconomic outlook from a trade war, (00:10:14): then essentially you are looking at 7.5 million tonnes of LNG demand disappearing (00:10:20): from the market. (00:10:22): 7.5 MT, (00:10:23): that's an equivalent of about one month of EU LNG demand, (00:10:27): like an entire month of LNG imports for the whole of the EU just gone. (00:10:32): That kind of bearish view was backed up by the Oxford Institute for Energy Studies, (00:10:36): which says that a year-on-year decline in EU gas demand is a very real possibility (00:10:42): for this year. (00:10:43): So in summary, I'd say the market's looking very bearish. (00:10:46): The bearish setup is undeniable. (00:10:48): And it seems like there won't even be a sort of policy-induced scramble to inject (00:10:53): gas into storage facilities in Europe to support LNG demand this summer. (00:10:56): So it'll be interesting to see... (00:10:58): quite where the equilibrium lies, (00:11:00): how low the prices go this summer, (00:11:02): because obviously there will be some procurements. (00:11:04): But at the same time, the industrial sector is very much on its knees still. (00:11:08): There's no signs of an industrial recovery on the horizon. (00:11:13): And the power sector, (00:11:14): we're already seeing very, (00:11:16): very steep negative pricing in the power sector in day-ahead markets. (00:11:19): We saw all across continental Europe today. (00:11:21): This is Sunday, the 27th of April, I'm recording. (00:11:24): And many parts of North, Central and Western Europe were registering negative prices. (00:11:30): So you're not going to see any gas-fired generation dispatching when power prices (00:11:35): are minus 10, (00:11:35): 20, (00:11:36): 100 euros per megawatt hour. (00:11:41): Now, moving on to reader questions. (00:11:44): So James in Adelaide, he's written in to say, (00:11:56): I'm not sure I would call $11 gas, quote unquote, glut economics. (00:12:02): And that's a phrase that I used in a recent piece in Energy Flux, (00:12:06): saying that the correction and sell-off, (00:12:09): taking gas down to the equivalent of $11 per mbtu was sort of a signal of a glut coming. (00:12:15): James carries on, he says, I guess the question is, where do we settle as a floor? (00:12:19): in the coming years and for how long and he says anecdotally by the way I was in (00:12:23): Europe a fortnight ago and most corporates as in utilities and LNG producers were (00:12:27): saying that between 50 and 70 billion cubic meters per annum of Russian gas is (00:12:32): going to come back including a certain French super major naming no names who said (00:12:37): that 80 BCM could return but they're still buying US LNG (00:12:41): In which case, (00:12:42): do we bump along a sort of $6 MMBTU floor for several years because of a US (00:12:47): capacity overbuild? (00:12:48): And who wears the most pain? (00:12:50): Likely the portfolio players buying USLNG that haven't sold to an end customer yet. (00:12:56): And maybe the utilities and the emerging markets are the winners. (00:12:59): Interested in your take. (00:13:01): Well, (00:13:02): hey, (00:13:02): James, (00:13:02): that's like just excellent questions and really interesting perspective on the kind (00:13:07): of mood music coming from the European corporates. (00:13:10): And I mean, (00:13:11): I just say that when I started covering gas in 2016, (00:13:13): then yeah, (00:13:14): like $11 from BTU was a winter spike and definitely not a correction or a phase shift. (00:13:20): which is what I've been calling the current state of the market, (00:13:24): shifting from one price phase to another. (00:13:26): So I take your point about glut economics. (00:13:29): And I'd say that a $6 floor sounds feasible. (00:13:32): I mean, at this price, some US LNG shut-ins seem inevitable. (00:13:37): And I'll talk about those in a minute. (00:13:38): And you can imagine also the off-takers, (00:13:40): the customers of the US LNG plants, (00:13:42): that they're going to get burnt if TTF is trading at $6 because they're going to be (00:13:47): losing money on (00:13:48): every single cargo that they lift at that price because the cost of lifting, (00:13:52): liquefaction and shipping across the Atlantic, (00:13:55): regasification is going to come in at much more than $6 per MMBTU. (00:14:00): I'd say, yeah, the portfolio players are most exposed. (00:14:02): Those are the likes of Shell and Total Energies who have big offtake commitments, (00:14:07): who have to then find an end user to sell the LNG onto. (00:14:12): And they always have a very rosy view of demand. (00:14:14): They're extremely long on LNG production, LNG supply. (00:14:18): carry all this long risk on their books because they know that demand will rise and (00:14:23): they'll be able to offload those cargoes in a profitable way. (00:14:26): And also make lots of money around trading and portfolio optimisation and basically (00:14:30): arbitraging away all of the inefficiencies in the global LNG market, (00:14:34): of which there are many, (00:14:35): I might add, (00:14:36): particularly because we have a trade war going on now. (00:14:38): But I think that their view is probably a little bit too rosy the way that things (00:14:43): are panning out. (00:14:44): So, (00:14:44): yeah, (00:14:44): the portfolio players, (00:14:45): they're very exposed, (00:14:46): but so are end users, (00:14:47): as in like the utilities and the industrials. (00:14:50): So the likes of BASF, (00:14:51): the big German chemical company, (00:14:53): they're on the hook for quite a large volume of US LNG from Chenier. (00:14:59): And that sales and purchase agreement comes into effect this year or next year. (00:15:04): I can't quite remember. (00:15:05): But the point is that if these industrials, (00:15:07): they can't physically use the gas, (00:15:09): like if they don't have enough demand for their products, (00:15:11): whatever they may be, (00:15:12): and they have to resell these cargoes at a loss on the TTF or cancel the cargoes (00:15:17): and purchase. (00:15:18): pay the take or pay fee to the US LNG exporters, they're going to be losing a lot of money. (00:15:23): So you've got to ask yourself whether they're going to be in hot water as well. (00:15:26): Again, (00:15:27): it depends on industrial demand, (00:15:29): demand for products which are manufactured in Europe, (00:15:32): energy intensive products. (00:15:33): And you've got to say that the outlook... (00:15:35): is is pretty bearish on that front too i mean we're going to have a glut of chinese (00:15:39): products just hitting the market because they've got nowhere to go literally there (00:15:44): are cargo ships that are stuck in ports in china all loaded with all manner of (00:15:49): products and they've got nowhere to go because they can't go to the us because (00:15:53): there's 140 something percent tariff on chinese goods in america (00:15:57): and no one's going to pay those tariffs on those goods. (00:15:59): So where's all this Chinese stuff going to go? (00:16:02): You're going to have just a massive wave of cheap Chinese produce hitting European ports, (00:16:06): being imported all over the place, (00:16:08): Africa, (00:16:09): across the rest of Asia, (00:16:11): South America. (00:16:12): And so it's very hard for European industrials to compete against that kind of (00:16:18): tidal wave of cheap produce. (00:16:20): So it's not looking good for industrial demand, (00:16:22): and so all the people who have signed up for LNG, (00:16:24): they could be in for a nasty surprise. (00:16:27): But on the question of USLNG, (00:16:29): I'm glad you brought that up, (00:16:30): James, (00:16:30): because I have actually, (00:16:32): since you wrote that question, (00:16:34): published a quite interesting deep dive on the economics of USLNG. (00:16:38): And I created a new data model to take a look at the economics of USLNG. (00:16:44): So I talked about that just now, like the cost of delivering USLNG into different markets. (00:16:48): like Europe and Asia when you when you break it all down then like the the cost (00:16:52): base is pretty high even though like shale gas in the US is is really cheap and (00:16:57): often like free or even negatively priced at the wellhead and you still got to like (00:17:01): transport it to the Gulf Coast you've got to cover the costs of a liquefaction (00:17:05): facility you've got to pay the cost of shipping fuel bunker fuel and then you've (00:17:09): got to pay the cost of regasification at the other end once you add all those costs (00:17:13): up and you deduct them from the sales price that's your margin and they call it the (00:17:17): net back (00:17:18): but it's just the kind of the profit level, the gross profit. (00:17:20): And the netback on USLNG, selling USLNG into Europe, has fallen really quite dramatically. (00:17:27): I mean, (00:17:27): this is no news to anybody that follows this stuff, (00:17:30): but they've fallen 90% since the peak just in the aftermath of the Ukraine invasion (00:17:36): in 2022. (00:17:36): Back then, a single cargo of USLNG... (00:17:41): was fetching a netback of around about $200 million. (00:17:46): And you think there were hundreds of these ships all crossing the Atlantic like an (00:17:51): armada and each one was carrying hundreds of millions of dollars worth of gas (00:17:55): because the Europeans were bidding up the price. (00:17:57): Well, you know, it's really crashed since then. (00:17:59): You know, you're looking at about $20 million. (00:18:03): per cargo currently and that's falling fast so we can calculate what the margins (00:18:09): are today but also in the future by looking at the futures market so you can look (00:18:13): at the future price of henry hub the future price of ttf the future price of jkm (00:18:18): which is the spot price in asia we can also look at the future price of shipping (00:18:23): which is actually very cheap at the moment but even so the margins are just on a (00:18:27): kind of very steep downward trajectory they're going to (00:18:30): crash between now and 2028 so the margin on uslng will actually be zero or negative (00:18:38): by 2028 in europe and by 2030 they'll be negative in asia as well and that's only (00:18:45): based on current futures pricing that doesn't take into account how prices could (00:18:50): still change between now and then (00:18:52): And I just can't see any really major bullish drivers on the horizon between now (00:18:57): and 2028 that could offset that kind of secular decline in margins in sales prices (00:19:04): for gas for all the reasons I've been talking about so far in this podcast. (00:19:08): So, yeah, it's looking pretty bad for US LNG producers. (00:19:12): And obviously, when margins... (00:19:13): flip negative, then they stay negative for quite a long time. (00:19:17): Then there's the very real possibility that plants will be shut in. (00:19:20): And I see the US as essentially becoming the swing producer for liquefied natural (00:19:26): gas in the second half of this decade. (00:19:29): So that means that they will essentially fire up plants and then shut them down again, (00:19:34): depending on the kind of physical state of the market. (00:19:37): And, (00:19:37): you know, (00:19:38): if supply curtailments are required to balance the market, (00:19:41): then they'll be among the first to shut in. (00:19:44): Because of the way that their contracts are structured, (00:19:46): because of their relatively high cost base and the flexibility that they afford in (00:19:50): their commercial contracts with customers, (00:19:53): You're going to see the very real possibility of US LNG shut-ins, (00:19:57): kind of like what happened during COVID when there were these lockdowns and energy (00:20:01): demand across the board was quite quickly and tightly squeezed. (00:20:06): And as a result, you saw a big sell-off in commodities. (00:20:09): All commodity prices fell and oil, of course, famously settled at negative. (00:20:13): Well, (00:20:13): the price of American oil, (00:20:15): the West Texas Intermediate, (00:20:17): settled at negative pricing in 2020 and gas prices went very, (00:20:21): very low too. (00:20:22): We saw lots and lots of LNG cargoes cancelled and plants shut in until prices recovered. (00:20:28): So I do see that happening again. (00:20:30): in the next sort of two, three years. (00:20:32): So yeah, just a kind of final note on that. (00:20:34): So futures markets, (00:20:35): those negative margins, (00:20:37): they're based on TTF hitting a low of $8, (00:20:41): the equivalent of $8 per MMBTU in summer 2029. (00:20:46): So even if TTF only falls by another, what is it? (00:20:49): If it's about just over $10 now and you're going down to eighth, (00:20:53): then you're only looking at like, (00:20:54): what's that? (00:20:54): One fifth, around about one fifth reduction in the current pricing between now and 2029. (00:21:00): And you're already going to hit negative US LNG margins. (00:21:04): I mean, (00:21:04): I see the possibility for TTF prices to fall by one fifth this year, (00:21:09): let alone between now and the year 2029, (00:21:12): when we have an absolute wall of new LNG supply hitting the market relative to very (00:21:18): kind of flat demand growth. (00:21:19): so i just don't really see a way for us lng margins to stay in positive territory (00:21:24): and that's going to make it very difficult for new projects that want to get off (00:21:27): the drawing board that want to sell lng to customers and then you know get these (00:21:32): binding purchase agreements to take to the banks to get finance to build their (00:21:36): projects i just don't see that happening i just don't see how you can sell lng into (00:21:41): a market that's kind of cratering towards negative margins that it just doesn't add (00:21:44): up to me but (00:21:45): Maybe I'm wrong. (00:21:45): Maybe they'll pull a rabbit out of the hat somehow. (00:21:47): We'll see. (00:21:49): Oh, yeah. (00:21:49): And just one more thing I thought was worth pointing out that if TTF does hit $6 (00:21:55): per MBTU equivalent, (00:21:55): then in 2028, (00:21:56): that would imply... (00:22:03): a loss of 8.2 million dollars per cargo so if you were to to you know produce an (00:22:09): lng cargo at the future price of a henry hub in 2028 whatever that is and like lock (00:22:15): in the cost of shipping now and and then you had to sell at six dollars per mbtu (00:22:19): then you'd be losing eight more than eight million dollars on that trade so so i (00:22:24): think that's entirely feasible (00:22:26): Now, next question. (00:22:27): Carled in, I think he's in New York. (00:22:29): He says, Hi Seb, thank you for all the interesting content and insights. (00:22:33): I wanted to share with you this report from Jeff Curry and see if you can share (00:22:38): your feedback on it in your next podcast. (00:22:40): Carled's referring to a report called The New Jewel Order by Jeff Curry, (00:22:46): who's the Chief Strategy Officer of Energy Pathways at Carlyle, (00:22:49): which is an investment house. (00:22:51): and curry was of course formerly their global head of commodities research at (00:22:55): goldman sachs where he helped to build their commodities business over nearly a (00:22:58): three-decade career and very well regarded high-steemed gentleman jeff curry and i (00:23:02): always pay attention to the things he says and writes the new jewel order i'll put (00:23:06): a link in the show notes and it really does make for compelling reading because it (00:23:10): was published a few weeks ago now and everything that's happened since kind of does (00:23:15): corroborate the world view that he he describes (00:23:18): It's a really sweeping view of the post-Second World War energy geopolitical panorama. (00:23:23): He talks about how the Bretton Woods Accord underpinned global trade and US energy (00:23:28): import dependence created an incentive for the US to protect shipping lanes and how (00:23:34): all of that is coming crashing down around us. (00:23:37): Not solely because of Donald Trump and the kind of cack-handed way that he's trying (00:23:41): to correct America's enormous trade deficit, (00:23:44): but certainly his actions are accelerating this sort of slow burn trend. (00:23:49): They're bringing it right to the forefront of what's driving global markets and (00:23:54): global geopolitics. (00:23:55): And it was kind of something that was happening on a very, (00:23:57): very much slower basis until now, (00:24:00): but now it's kind of impossible to ignore. (00:24:02): The Bretton Woods Accord, (00:24:04): of course, (00:24:04): established the US dollar as the global reserve currency, (00:24:08): facilitated international trade and investment, (00:24:10): and this gave the United States both a strong dollar and the means of financing the (00:24:14): enormous debts that come with maintaining its military. (00:24:17): It also, (00:24:18): of course, (00:24:18): gave rose to the petrodollar, (00:24:20): which is just the name given to dollars received by crude oil exporting countries, (00:24:26): and the way that those countries kind of reinvest those dollars in things like U.S. (00:24:31): treasuries, U.S. (00:24:31): debt. (00:24:32): So U.S. (00:24:33): energy independence has changed all that, because this whole structure worked because the U.S. (00:24:38): was just a massive consumer market with massive energy needs, (00:24:42): massive trade import needs, (00:24:44): and so they had this incentive to protect the sea lanes. (00:24:47): to make sure they got the products and the commodities that they needed to keep (00:24:49): their industrial economy running. (00:24:51): But of course, that's all changing now. (00:24:53): The US has energy independence to an extent. (00:24:56): I mean, (00:24:56): it still requires energy trade, (00:24:58): but on a kind of net basis, (00:24:59): then it does export more energy, (00:25:01): as in oil and gas principally, (00:25:04): than it imports. (00:25:05): And LNG, of course, is a massive part of that. (00:25:07): So the shale revolution made the nation a net petroleum exporter, (00:25:11): and that's decreased US interest in protecting sea lanes, (00:25:15): writes Jeff Curry in this report. (00:25:17): And because he says the United States is now energy independent, (00:25:21): it's not safe for other countries to be energy dependent. (00:25:24): And I thought that's such an interesting way to put it, (00:25:26): because if you think about it, (00:25:27): being energy dependent... (00:25:30): In a world where, (00:25:32): you know, (00:25:32): the kind of the trade lines that ensure that tankers of oil and gas turn up not (00:25:37): being protected anymore, (00:25:38): then, (00:25:39): you know, (00:25:39): your energy security is at risk. (00:25:41): And I think Europe is a really, really good example of that. (00:25:43): You know, Europe is heavily, heavily dependent on energy imports. (00:25:49): 54% of all European energy consumption is imported from overseas. (00:25:54): And if you're seeing a trade war, (00:25:55): you're seeing things like gunboats in the Red Sea, (00:25:59): and you're seeing the Suez Canal being unnavigable due to security constraints, (00:26:04): and other potential conflicts like pinch points like the Malacca Strait in Asia, (00:26:09): or even a military invasion of Taiwan... (00:26:12): Or, (00:26:12): you know, (00:26:13): in the Strait of Hormuz, (00:26:14): of course, (00:26:15): that could severely disrupt and spike energy prices. (00:26:20): So for importing countries, those are major, major risks to your economic security. (00:26:25): And that's kind of what Jeff Curry's talking about. (00:26:27): And I think on that point, then, he makes some really interesting and valuable observations. (00:26:32): It goes on to write about how the green premium is being replaced by a security premium. (00:26:38): So zero interest rate environment made renewable energy bets cheap because you (00:26:42): could essentially bet on future revenues by making losses now because the cost of (00:26:46): doing so was essentially zero or negative. (00:26:48): And the return to higher rates with a kind of slightly more inflationary (00:26:51): environment requires more targeted capital allocation. (00:26:55): so rather than kind of betting on you know wonderful new offshore wind growth (00:26:59): markets in exotic parts of the world you might kind of retrench around well okay (00:27:03): what's the the kind of the local supply that we need right now to keep our (00:27:07): economies running and those are the most valuable investments to make (00:27:11): renewables and nuclear are local energy sources and they're not traded over long (00:27:14): distances so therefore they're in higher demand argues curry and he says that (00:27:19): fossil fuels are under threat from the trade war and he says that peak oil has (00:27:24): manifest but in the sense that it's actually peak oil trade so we're not going to (00:27:29): see oil traded in the way that we do currently ever again frankly (00:27:34): And he cites China's falling oil imports as a kind of evidence for that. (00:27:39): And that was really the product of strategic planning for energy security decades ago. (00:27:44): And we've seen how China's embrace of electric vehicles is really motivated by this (00:27:50): desire to liberate itself from the trappings of having to do business with OPEC leaders. (00:27:56): And obviously, if you can electrify your economy, (00:28:00): and you have just the world's most enormous coal reserves, (00:28:04): massive wind and solar build-out, (00:28:07): kind of world-beating nuclear development program, (00:28:10): then obviously, (00:28:11): you know, (00:28:11): the role of oil in your economy is going to be reduced significantly, (00:28:15): and you're protected from things like a trade war. (00:28:17): So if oil becomes more expensive, (00:28:19): less reliable, (00:28:20): less accessible, (00:28:20): you know, (00:28:21): you've got backup options. (00:28:22): And I think that's how the Chinese have approached this thing. (00:28:25): They always take the long view, and they're in a much... (00:28:27): sort of stronger position than somewhere like europe for example which has always (00:28:31): been very much kind of a kind of open trade approach and relying on on kind of the (00:28:39): supply lines that have kept the global economy running and just assuming that you (00:28:43): know the energy the products will always turn up will always be able to trade well (00:28:47): hey, look what's happening. (00:28:48): That's not the case anymore. (00:28:50): And if you don't take corrective measures very quickly, (00:28:53): then you're going to find that essentially living standards are going to take a (00:28:56): very strong hit. (00:28:57): In fact, they are taking a very heavy hit in this current macroeconomic environment. (00:29:02): um so so i'd say like like jeff curry's view is is very interesting very (00:29:07): thought-provoking i agree with a great deal of it not all of it i must say i mean (00:29:10): you know wind solar and nuclear they are not immune from a trade war you know let's (00:29:14): be clear that a lot of the um the critical minerals and the (00:29:18): the components that are required to build these energy sources, (00:29:22): they are very much controlled by the Chinese too. (00:29:25): And if there's a trade war and those supply lines get disrupted, (00:29:28): the growth of renewables particularly are under threat. (00:29:33): China essentially owns the supply lines and the refining and processing capacity (00:29:37): for these new and cleaner energy sources. (00:29:40): And so I'd say that the security paradigm, it's not entirely supportive of this kind of (00:29:46): security premium that supports renewables unless of course it's complemented by (00:29:51): balancing technology and infrastructure so you know that means we need to get (00:29:56): things like batteries and more transmission infrastructure to to be able to to (00:30:01): ensure that these supplies are robust as well and because you know they need to be (00:30:05): they need to be secure and they need to be 24 7 availability and um and obviously (00:30:10): the demand side needs to needs to be able to flex with sort of digitalization and (00:30:15): technology (00:30:15): and AI and big data and all these things, (00:30:19): which I've just described, (00:30:20): all these technologies that are extremely exciting and doing wonderful things and (00:30:24): have great potential, (00:30:25): they're all exposed as well. (00:30:26): You know, like where are you going to get your semiconductors from? (00:30:29): Where are you going to get your copper from? (00:30:31): It's like it's out there, (00:30:33): like they can be made, (00:30:34): but the trade war does change the way that you look at these things. (00:30:38): So yeah, there's a real kind of question mark. (00:30:43): around the extent to which disruption might affect the outlook for those investment (00:30:47): prospects or not, (00:30:49): of course, (00:30:49): because this whole situation is essentially, (00:30:53): it's a kind of, (00:30:54): what's the word? (00:30:55): It's something that's been kind of pushed to the front of the global priority on (00:31:01): the whim of a man who wants to make his mark on the world. (00:31:05): And I think that he's going to be (00:31:06): He's going to have to kind of acknowledge reality sooner or later. (00:31:10): You know, I mean, I'm going to speak frankly here. (00:31:12): The guy was elected on a tidal wave of bullshit. (00:31:15): I mean, (00:31:15): I've never seen so many lies told by a single human being in a single electoral campaign. (00:31:20): And that's really saying something. (00:31:21): And, you know, it's like you can't have your cake and eat it. (00:31:24): I don't think that there's really a kind of sound strategy behind this trade war. (00:31:30): It's very much a lot of bluster, a lot of noise. (00:31:32): And the minute that American shelves in American supermarkets go empty and, (00:31:37): you know, (00:31:37): the kind of the MAGA faithful are having to pay... (00:31:40): twenty dollars for a loaf of bread or whatever it might turn out to be or they (00:31:43): simply can't get hold of all the things they need to live their lives then you you (00:31:48): know what's going to happen there's going to be enormous pressure for this man (00:31:52): donald trump of course i'm talking about to take a step back and say well actually (00:31:56): you know what we can't just bully china and all our other trade partners into (00:32:00): submission we have to actually do deals with them which take into account the fact (00:32:06): that we need them (00:32:07): You know, he doesn't hold all the cards. (00:32:09): America simply can't exercise that kind of belligerence without consequences for (00:32:15): American citizens. (00:32:17): So I think you're going to see Trump kind of go groveling back to Beijing and essentially (00:32:23): Or, (00:32:23): you know, (00:32:24): lower the tariffs and like try to extract some kind of symbolic concession, (00:32:31): which could be something completely meaningless, (00:32:33): which he'll seize on as being the greatest deal that's ever been done in the (00:32:39): history of the world. (00:32:40): Because, (00:32:41): you know, (00:32:41): he's the art of the deal and everything he says and everything he does is just (00:32:44): amazing and blah, (00:32:45): blah, (00:32:45): blah. (00:32:46): It's entirely possible that we'll just see his media allies trying to tell the (00:32:51): world that, (00:32:52): you know, (00:32:54): the black is white and that, (00:32:55): you know, (00:32:55): we've done a deal and that we can kind of climb down and save face. (00:32:59): At least that's how I see this unraveling. (00:33:03): And so that's the outlook as it stands. (00:33:05): I mean, (00:33:06): I do reserve my judgment in the sense that if this happens, (00:33:10): if there's a big kind of climb down on the trade war, (00:33:13): then I could very well readjust my entire outlook in terms of like how this year (00:33:18): could pan out. (00:33:20): If there's a truce and tariffs are kind of significantly wound back and the stock (00:33:26): market rallies and all those ships manage to dock back at American ports again and (00:33:32): you see the stock market rallying, (00:33:34): bonds stabilising, (00:33:35): industrial production kind of whirring back into America. (00:33:39): operation again across um you know in china's industrial seaboard and you see (00:33:44): consumption resuming then of course your natural gas is going to benefit from that (00:33:49): prices are going to elevate because you're going to see more more gas being drawn (00:33:52): into those industrial plants and you're going to see more consumption generally (00:33:55): more power and so that could that could materially change the outlook for this (00:33:59): summer and so you could see like some some price support coming in (00:34:02): I don't think we're likely to see now another crazy bull run like the kind that we (00:34:07): saw last year when TTF went sort of spiralling upwards from about $20 at the start (00:34:15): of 2024. (00:34:15): And it ended the year kind of nosing towards $60 on the basis of a big nothing pie. (00:34:21): And it's now goled off spectacularly since then. (00:34:25): So I don't think we're going to see that happen again, (00:34:27): but we could see things still quite interesting if the kind of global outlook (00:34:33): doesn't quite pan out in the kind of incredibly bearish way that I'm seeing it (00:34:37): right now anyway. (00:34:38): I will see. (00:34:40): okay that's a i think that's probably enough for one episode you've probably heard (00:34:43): enough from me but just a reminder that if you want to get your question asked on (00:34:47): the podcast then don't forget to go and sign up for a subscription over at energy (00:34:52): flux so go to www.energyflux.news and sign up for for free email updates if you (00:34:59): just want to kind of get a feel for it but if you want to get the full shebang you (00:35:02): want to get behind the paywall (00:35:04): If you want to see all the number crunching, (00:35:06): all the data analysis, (00:35:08): all the data modeling that I'm getting up to, (00:35:10): if you want to be able to ask questions in the subscriber chat, (00:35:13): you want to be able to get your questions answered on the podcast or just make (00:35:17): comments on posts and everything, (00:35:19): then take out a paid subscription, (00:35:20): go check it out, (00:35:21): sign up, (00:35:22): and your question could be the next one to be asked on the next episode. (00:35:26): So thank you for listening. (00:35:28): Have a great week, and I'll see you soon. ### The big squeeze URL: https://www.energyflux.news/the-big-squeeze/ Last updated: 2025-11-13T01:29:32.000Z **The Trump administration wants the world to buy more US liquefied natural gas to rebalance America’s trade deficit. The trouble is, LNG is losing its allure amid a bruising trade war of Donald Trump’s own making and the onset of a** [**new global gas pricing regime**](https://www.energyflux.news/p/phase-shift)**.** With bond markets in turmoil and tectonic shifts in the global security order, the US LNG industry is entering choppy waters. Margins are about to be crushed in a pincer movement of tariff-induced cost inflation and tumbling energy prices in key import markets. Right now, as the effects of the 2022 energy crisis linger, American shale gas is still considerably cheaper than premium-priced demand centres in Europe or Asia. Large price differentials (spreads) mean there are decent profits to be made from buying natural gas at Henry Hub prices, liquefying it on the Gulf Coast, and shipping it across the Atlantic to Rotterdam or through the Panama Canal to Tokyo. But that economic calculus is on the cusp of a rapid debasement. New financial analysis published today by *Energy Flux* exposes the extent of the problem, and how quickly it could unfold. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/11/1500x500-1-1.jpg) ## Sign up for đŸ’„ Energy Flux đŸ’„ ***Fiercely independent** energy market analysis Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. Using detailed modelling of US LNG cost inputs, commodity futures and original scenario analysis, this **Deep Dive** reveals: đŸ’„ *US LNG netbacks have fallen \~90% since the 2022 energy crisis* —> **Are we returning to Covid-era shut-ins?** đŸ’„ *Full lifecycle cargo profitability is on track to fall below zero this decade —> *What does this mean for America’s world-leading role in the global LNG mix?** đŸ’„ *Several plausible future energy scenarios present major downside risks to netbacks —> *Who are the likely bag-holders and can they reduce their exposure?** This post also explains the cost components and unique contracting considerations of US LNG, which could mitigate some — but not all — of the worst effects of the economic maelstrom that’s brewing for America’s primary energy export. *Subscribe for full access, and support independent analysis that gives you the unvarnished truth about tumultuous 21st century energy markets.* đŸ’„ *Article stats: 2,000 words, 10-min reading time, 11 charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Phase shift URL: https://www.energyflux.news/phase-shift/ Last updated: 2025-07-20T09:59:35.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ee47bb94-f455-403e-8429-1d038ec3965d_1349x445.png) **We are past the point of no return. The European natural gas market has shifted *definitively* into a new pricing regime. By extension, so has the global LNG market.** [Subscribe now](https://www.energyflux.news/subscribe) There were plenty of warnings of [over-supply](https://www.energyflux.news/p/the-asian-lng-glut-is-here-oil-gas-price-trade), [hubris](https://www.energyflux.news/p/eu-natural-gas-ttf-hedge-funds-fighting-gravity), [imbalance](https://www.energyflux.news/p/fever-pitch) and [correction ](https://www.energyflux.news/p/one-for-the-road-ttf-natgas-russia-ukraine-gas)throughout 2024\. One after another, these prophecies are starting to come true. As usual, movements in speculative capital — investment funds shifting their price bets — provide the best explanation of market momentum. The sell-off on the Dutch Title Transfer Facility (TTF) since February has been so deep and so fast that investment funds have neither the means nor the motivation to rebuild a bullish narrative. The figures are quite astonishing. Since mid-February, hedge funds sold off a staggering **220 TWh** of net length in TTF futures, or 75% of their total net position. That’s equivalent to **22.5 Billion cubic metres** (Bcm) of gas, or the equivalent of the entire annual gas consumption of Poland — gone in just nine manic weeks of trading. Over the same time period, front-month TTF has fallen by about **40%**. The exodus of speculative capital from TTF length began after TTF reached its winter peak of **€58/MWh** in February. It then accelerated as the Trump regime clumsily [declared a trade war ](https://www.energyflux.news/p/trump-slump)against the whole world, and then mostly against China. TTF subsequently crashed haphazardly through supports as funds intensified their selloff, settling at a nine-month low of **€33/MWh** last Thursday. In January, *Energy Flux* [defined](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-1) ‘five phases of speculation’ that characterised the EU gas market over the past five years. Since then, it has become apparent that a sixth phase is already upon us. Speculative capital flight and price action have made it impossible to ignore: the ‘Geopolitical Speculative Bubble’ that started in February 2024 has burst. We are into a brave new pricing regime. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/5f73d636-298d-4c43-a7a8-22e0118cc6bd_4273x1851.png) This week’s Easter special [**Chart Deck**](https://www.energyflux.news/t/chart-deck) explores how a confluence of bearish factors (on both demand and supply sides) will prevent a convincingly bullish narrative from taking root throughout summer 2025 — or, indeed, for some time thereafter. If you want to understand the significance of recent price action — and the reasons why the market won’t return to the insane highs of 2024 — **this post is for you**. [Subscribe now](https://www.energyflux.news/subscribe) for full access, and support independent market analysis that dares to make the bold calls that mainstream outlets can’t or won’t. [Subscribe now](https://www.energyflux.news/subscribe) đŸ’„ *Article stats: 1,800 words, 8-min reading time, 14 charts, graphs and animations* đŸ’„ _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The unstoppable tragedy of Mozambique LNG URL: https://www.energyflux.news/the-unstoppable-tragedy-of-mozambique/ Last updated: 2025-07-22T16:46:15.000Z **Amid rapidly deteriorating US-China trade relations, the Trump administration’s renewed support for the Mozambique LNG project is taking on new significance.** The Export-Import Bank of the United States (EXIM) recently reapproved a $4.7 billion loan to bankroll the sprawling onshore development on the east coast of sub-Saharan Africa. Led by French oil major TotalEnergies, Mozambique LNG is a $20-30 billion megaproject with a nameplate capacity of 12.9 million tonnes per annum (mtpa). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/186a6b0a-4bb0-446d-aec6-6f1a10872924_720x701-jpeg.jpg) **Map: TotalEnergies* The loan was first issued in 2019 but required fresh approval from EXIM — which answers to the White House — following years of delays. TotalEnergies declared force majeure in 2021 amid a worsening security situation in the northern Cabo Delgado province that hosts the development. The [decision](https://www.exim.gov/news/minutes/board-meeting-minutes-2025-03-13?ref=energyflux.news) to rubber stamp the loan was seen as incongruous: why use American taxpayer dollars to de-risk a contentious project that’s targeting the same Asian markets as the next wave of American LNG export plants planned along the US Gulf Coast? ## Reputational hazard Mozambique LNG has become synonymous with a brutal counterinsurgency against Islamist militias in the isolated war-torn northern territories of Mozambique near the border with Tanzania. An [investigation](https://www.politico.eu/article/totalenergies-mozambique-patrick-pouyanne-atrocites-afungi-palma-cabo-delgado-al-shabab-isis/?ref=energyflux.news) published by Politico late last year detailed horrific human rights abuses perpetrated by Mozambican soldiers on the Mozambique LNG payroll operating out of the plant’s Afungi construction site. TotalEnergies [denies](https://www.mozambiquelng.co.mz/wp-content/uploads/2025/03/Press-Release-Investigations-performed-by-Mozambique-LNG-on-the-allegations-published-by-Politico.pdf.pdf?ref=energyflux.news) it was aware of these incidents and [welcomed](https://totalenergies.com/news/mozambique-lng-totalenergies-welcomes-launch-official-investigations-mozambique?ref=energyflux.news) an official criminal investigation. Last month, French authorities [launched](https://www.ndtv.com/world-news/france-launches-manslaughter-probe-against-totalenergies-over-mozambique-attack-7929396?ref=energyflux.news) a manslaughter probe against the French oil and gas major for allegedly failing to protect its subcontractors killed in a ruthless siege of a hotel in Palma in 2021\. The company is cooperating with the investigation, the second [manslaughter complaint](https://totalenergies.com/media/news/press-releases/mozambique-lng-totalenergies-response?ref=energyflux.news) arising from this incident. Why, then, is EXIM so keen to bankroll a high-stakes African LNG gamble with extreme reputational risks? ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a9029588-ff5f-411d-9dce-aed2f88c707b_1024x608-png-1.jpg) **Image by Substack Image Generator* ## More than just jobs The commonly cited justification is that the project will procure more than 40% of its goods and services from US contractors. EXIM [says](https://www.exim.gov/news/exim-board-unanimously-approves-amended-financing-exports-mozambique-lng-project-and-support?ref=energyflux.news) Mozambique LNG will support nearly 17,000 American jobs in the five-year construction phase. The largest beneficiary is Houston-based McDermott, which [signed](https://www.mcdermott-investors.com/news/press-release-details/2019/McDermott-Announces-Contract-Agreement-for-Mozambique-LNG-Development/default.aspx?ref=energyflux.news) a $2 billion contract in 2019 to help build the facility. But the reality is more complex. By its own [admission](https://www.state.gov/u-s-relations-with-mozambique/?ref=energyflux.news), the EXIM deal is the US government’s largest investment on the African continent. This is not a simple state loan to fund American economic exports. Mozambique LNG is of **existential significance** for the host country’s ruling elite**,** and a **geopolitical priority for the Trump administration** as it launches a bruising trade war against China. I reported on the travails of Mozambique LNG in a previous life as a daily gas/LNG news editor, documenting the twists and turns as financiers steered what would be Africa’s largest capital project through to a final investment decision (FID). This [**Deep Dive**](https://www.energyflux.news/t/deep-dive) reveals little-known details surrounding the financing commitments between Western sponsors and the government of Mozambique — and the geopolitical tailwinds propelling this high-stakes megaproject through a quagmire of insecurity. [Subscribe now](https://www.energyflux.news/subscribe) for full access, and support independent energy journalism. [Subscribe now](https://www.energyflux.news/subscribe) *Article stats: 3,200 words, 15-min reading time, 3 charts/maps* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Chaos theory URL: https://www.energyflux.news/chaos-theory/ Last updated: 2025-07-29T03:31:32.000Z HOT TAKE: Trump’s impossible energy trade demands are a fractal of infinite contradictions _This post is for subscribers on the Premium tier only._ ### Trump slump URL: https://www.energyflux.news/trump-slump/ Last updated: 2025-06-17T09:31:18.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/f2ee686f-6840-432b-8aed-d84aaad6629d_1349x445.png) **Trump’s trade war is crashing the global economy and slamming the brakes on energy demand. Who’da thunk it?!** [Subscribe now](https://www.energyflux.news/subscribe) As the rulebook for post-World War 2 globalised trade goes up in smoke, fear and confusion reign supreme. The market is struggling to parse the significance of the Trump administration’s sweeping tariffs and punitive reciprocal measures from America’s major trading partners. For the second time this decade, supply chains, capital flows and growth projections are all in rapid dizzying flux. Ruling elites are scrambling to save strategic industries in an unparalleled spasm of protectionism. Markets are imploding as investors flee stocks in search of safe haven assets. Like an emergency medic warming up the defibrillator, governments are drawing up hasty stimulus plans in a bid to halt an economic heart attack. An inflationary shock seems inevitable, and recession risk is surging. No region or segment of the global economy is safe, although some are far more exposed than others. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/c107458f-e20d-431e-9e4d-7418f05afd8a_1024x768-jpeg-3.jpg) **It’s all part of the plan, right Don? Image by Grok* **Liquefied natural gas stands out as a big loser in any version of Trump’s trade war.** The LNG industry’s core narrative of endless growth, predicated as it is on [surging demand from emerging Asian economies](https://www.energyflux.news/p/asias-lng-bottleneck-part-1), is becoming less convincing by the day. The economics of LNG were transformed after yet another manic week in European energy markets. And if Trump remains recalcitrant, this is just the start. Prices on Dutch TTF, the European gas benchmark, fell 14% across four manic trading sessions between Tuesday and Friday — with profound implications for global LNG trade flows and the summer EU gas restocking season. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a6f96ea0-c88b-42e5-9bbf-9206449a14df_3979x1935.png) This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) runs the rule over how Trump’s burgeoning trade war is roiling: - TTF-JKM spreads and the LNG arbitrage opportunity to Asia - TTF calendar spreads and the economics of refilling gas storages - The competitiveness of US LNG, as Henry Hub and crude oil prices race lower Let’s get stuck in. [Subscribe now](https://www.energyflux.news/subscribe) *Article stats: 1,200 words, 6-min reading time, 9 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Gas attack: Inside Russia’s new strategy to break Ukraine URL: https://www.energyflux.news/gas-attack-inside-russias-new-strategy/ Last updated: 2025-06-17T09:31:42.000Z **A gas metering station** [**ablaze**](https://www.energyflux.news/p/sudzha-burns) **and a** [**pipeline sneak attack**](https://www.rferl.org/a/russia-ukraine-kursk-pipeline-surprise-attack-/33346763.html?ref=energyflux.news)**. A 30-day energy infrastructure** [**ceasefire**](https://www.energyflux.news/p/a-ceasefire-in-name-only) **violated within the hour only to be** [**revamped**](https://kyivindependent.com/ukraine-russia-partial-ceasefire-may/?ref=energyflux.news) **in Russia’s favour a week later. Deep distrust, recriminations and ongoing clashes are the soundtrack to putative Ukraine ‘peace talks’.** [Subscribe now](https://www.energyflux.news/subscribe) The kind of headlines that feel scripted for a geopolitical blockbuster have become a daily occurrence in Ukraine over the past few weeks. As a result, the markets are at fever pitch trying to price in the prospects of a lasting peace settlement and anticipate the next curveball development. Unanswerable questions abound: Will there ever be a resumption — or definitive preclusion — of gas pipeline flows through Ukraine? Start-up of Nord Stream 2? Or even the destruction of TurkStream? Against a background of incendiary headlines lies one that most hurts Ukraine and its negotiating power: **Russia’s bombardment of Ukrainian natural gas production.** ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2f0df68a-d425-43b2-b9b5-cda96db2e4fe_1792x1024-3.png) **Raining down energy misery on Ukraine. Image by DALL-E* Over the past few months Moscow has taken out approximately 40% of Ukrainian production through a fierce campaign of drone and missile strikes. The strikes have upset a delicate domestic gas balance in the war-torn country, forcing it to become more dependent on imports. Russian forces had largely steered clear of targeting natural gas assets up until this year. So why now? And how could the relentless bombardment of Ukraine’s gas production capability shape the contours of a peace settlement that that US Trump administration is desperately trying to forge? If you need to understand the Kremlin’s many motives for destroying Ukraine’s gas infrastructure, the extent of the damage, and its long-term implications for European geopolitics and energy markets — **this post is for you**. ✍[*Subscribe now for full access*](https://www.energyflux.news/subscribe) *and support *independent energy journalism* at the cutting edge of market-moving events on the battlefield.* [Subscribe now](https://www.energyflux.news/subscribe) *Article stats: 3,600 words, 17-min reading time, 4 charts and maps* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### US LNG’s affordability crisis URL: https://www.energyflux.news/us-lngs-affordability-crisis/ Last updated: 2025-06-17T09:32:10.000Z **The Trump administration’s energy policy is full of contradictions.** Not long ago, *Energy Flux* [explored](https://www.energyflux.news/p/us-lng-vs-america-first) how the mission to maximise LNG exports runs counter to Donald Trump’s campaign promise to put ‘America first’ and keep domestic energy prices low. Now, there’s another paradox rearing its head: **cheap oil will make US LNG less competitive in key importing markets across Asia**. Oil prices have fallen by more than 10% since Trump took office, and the White House is ([erroneously](https://www.msn.com/en-us/money/markets/gasoline-prices-coming-down-but-trump-s-drill-baby-drill-promises-are-not-the-reason/ar-AA1APXdO?ref=energyflux.news)) claiming credit for this. At the same time, prices on Henry Hub – the US natural gas benchmark – have risen 13%. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/04bf4650-8aea-48e9-8851-02b10f4e48c5_3654x1836.png) [Subscribe now](https://www.energyflux.news/subscribe) Few economic indicators are as hardwired to the incumbent administration’s approval rating as the price of gasoline at the pump. Remember these anti-Biden gas pump meme stickers? ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/4df05a0b-45b9-4fd7-b689-41eb97eb6db3_1280x720-jpeg.jpg) Senior advisor Peter Navarro recently predicted that oil prices could fall as low as $50 per barrel. This is a wayward forecast, but not beyond the realm of possibility. If it came true, $50 oil would be a welcome reprieve for consumers braced for a spike in inflation that Trump’s tariff trade war is widely expected to trigger. However, **it would also be kryptonite for his administration’s hopes of selling large volumes of US LNG into Asia**. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/f34a6d6f-24c1-4938-ad80-0a2ce699036a_1500x1024-jpeg-4.jpg) **US LNG: drowning in cheap oil? Image by DALL-E* This [**Deep Dive**](https://www.energyflux.news/t/deep-dive) examines why cheap oil is eroding the competitiveness of American liquefied natural gas, and the likely impact of $50 crude. Spoiler alert: *it ain’t pretty*. Subscribe now for full access, and support independent energy market analysis. [Subscribe now](https://www.energyflux.news/subscribe) *Article stats: 1,900 words, 9-min reading time, 6 charts & graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Sudzha burns đŸ”„ URL: https://www.energyflux.news/sudzha-burns/ Last updated: 2025-06-17T09:32:44.000Z **The natural gas transmission system that used to pump Russian gas through Ukraine into Europe is ablaze after being struck by a drone, making a mockery of Donald Trump’s efforts to broker an ‘energy ceasefire’.** Dramatic videos emerged on social media last night showing fires raging from the gas metering station at Sudzha near the Kursk-Sumy border. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/39c77342-d62f-431b-99f9-d604fb915fd2_1522x840-3.gif) Source: [X](https://x.com/saintjavelin/status/1902860057034793351?ref=energyflux.news) Flows along this route were halted on 1 January 2025 when the Russia-Ukraine transit and interconnector agreement expired. Speculation was mounting around a potential resumption of flows as part of a Trump-brokered peace deal. The strike on Sudzha brings an end to that speculation, and marks a potential tipping point in how EU natural gas markets price risk emanating from the Ukraine conflict — with distinct echoes of the 2022 Nord Stream pipeline sabotage. [Subscribe now](https://www.energyflux.news/subscribe) *Article stats: 1,000 words, 5-min reading time, 2 charts* _This post is for subscribers on the Premium tier only._ ### 🎧 A ceasefire in name only URL: https://www.energyflux.news/a-ceasefire-in-name-only/ Last updated: 2025-05-14T15:03:31.000Z 🎧 A ceasefire in name only 0:00 /200 1× **Energy markets are digesting last night’s breaking news that Russia has agreed to a 30-day temporary ceasefire in Ukraine.** [Subscribe now](https://www.energyflux.news/subscribe) The ceasefire is limited to energy infrastructure only, meaning Russian forces can continue their military advancements into Ukrainian territory. I recorded this emergency episode of the podcast late last night to share some initial thoughts about what this ‘ceasefire’ means for energy markets, and the wider prospects of a lasting peace settlement. Shortly after uploading the podcast, I read on [X](https://x.com/InnaSovsun/status/1902087130958197123?ref=energyflux.news) that Russian forces broke the agreement barely 30 minutes after signing it by bombing power infrastructure in Sloviansk
 đŸ€Šâ€â™‚ïž ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2fb9db34b5-379f-4cce-bc81-b48b1c02d68b_1024x768.jpg) *Pinkie promise? Image by Grok* As it happens, I have a [**Deep Dive**](https://www.energyflux.news/t/deep-dive) in the works that will explore Russia’s targeted campaign of destruction against Ukrainian natural gas infrastructure since the New Year. That piece will be published very soon — be sure to subscribe at[ www.EnergyFlux.news](https://www.energyflux.news/) to get it delivered straight to your inbox. Thanks for listening. — Seb P.S. Don’t forget to share your questions, thoughts and reactions to this and other energy-related news headlines for inclusion in the next episode. I prioritise input from paid subscribers 😉 [Leave a comment](#ghost-comments-root) --- # More from *Energy Flu*x: [🎧 Regulation vs. geopolitics: what's driving EU gas prices?This week’s episode of Energy Flux: On Air is all about the resurgence of geopolitics, rather than regulation, as the primary driving force behind EU natural gas markets.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/public/images/174c1c3e-3f60-45fd-a422-734f72ece686_1458x781.png)](https://www.energyflux.news/p/regulation-vs-geopolitics-whats-driving) [Sell the rumour
European natural gas prices are at an inflection point. Tectonic shifts across the regulatory and geopolitical landscape are — finally! — starting to deflate the bloated risk premium and correct the inverted summer-winter spread.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f38f0de7d-17d1-40b8-8ac4-ed17d9f167b6_1024x1024.jpg)](https://www.energyflux.news/p/sell-the-rumour) [Geopolitics turns bearishBullish momentum has once again overwhelmed European gas markets. But this time the rally has nowhere to go, not least because geopolitical events – so often the clarion call of EU gas permabulls – are now conspiring to crash the market.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/public/images/8ecf3690-9014-4fcf-b22d-a58f2ea4508a_1024x1024.jpg)](https://www.energyflux.news/p/geopolitics-turns-bearish) ### Appearances can be deceiving URL: https://www.energyflux.news/appearances-can-be-deceiving/ Last updated: 2025-06-17T09:33:07.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2ee9c14d-dd13-4303-a6d9-a40512857483_1349x445-jpeg.jpg) [Subscribe now](https://www.energyflux.news/subscribe) **At first glance, the Dutch TTF natural gas market looks like it’s in freefall.** Over the past month, hedge funds have slashed their bullish bets at an unprecedented pace, dumping long positions and driving prices sharply lower. Funds reduced their net length by another 48 TWh last week, according to the latest ICE Endex Commitment of Traders report. This appeared to mark a fourth successive week of speculative length being purged from the market. Fund net length now stands at **127 TWh**, having fallen by a whopping **166 TWh** since early February. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/6342b508-1937-4c9a-a2a7-0e130e02b667_4132x1929.png) The nominal value of funds’ bullish bets has dropped by two-thirds — a staggering **€10 billion** — over this timeframe. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/462dffb0-fa6d-446d-b79a-fecdece67d6b_6036x2928.png) The [bloodletting](https://www.energyflux.news/p/burning-the-house-down) has been swift and brutal, reinforcing the *perception* that sentiment has turned decisively bearish. But beneath the surface, something doesn’t quite add up. Investment funds quietly shifted tactics last week, signalling doubts about the doom-laden price action. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0e564e84-c7f6-45de-be22-36c6108fe4da_1024x1024-jpeg-1.jpg) **In EU gas markets, not everything is as it seems. Image by DALL-E / Bing Creator* This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck)analyses the behaviour of **hedge funds** and **physical gas players** to figure out whether TTF has over-corrected — and where the market might be heading next. [Subscribe now for full access](https://www.energyflux.news/subscribe), and support independent market analysis. [Get 10% off a group subscription](https://www.energyflux.news/subscribe) 👉 *Prefer *corporate invoicing*? I offer that too.* [*Get in touch*](mailto:seb@energyflux.news) *for more details* 👈 đŸ’„ *Article stats: 1,200 words, 6-min reading time, 15 charts, graphs and maps* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### 🎧 Regulation vs. geopolitics: what's driving EU gas prices? URL: https://www.energyflux.news/regulation-vs-geopolitics-whats-driving/ Last updated: 2025-05-14T15:04:00.000Z 🎧 Regulation vs. geopolitics: what's driving EU gas prices? 0:00 /200 1× [Subscribe now](https://www.energyflux.news/subscribe) This week’s episode of [**Energy Flux: On Air**](https://www.energyflux.news/podcast) is all about the resurgence of geopolitics, rather than regulation, as the primary driving force behind EU natural gas markets. Don’t get me wrong, regulatory risk has not evaporated — far from it. After the apparent relaxation of the EU’s [gas storage refilling targets](https://www.energyflux.news/p/the-bear-roars), there’s lingering uncertainty around how existing regulations are being interpreted. But the regulatory standoff generated by the European Commission’s confusing [recommendation](https://www.energyflux.news/p/burning-the-house-down) is unlikely to be resolved quickly. In the meantime, the intense geopolitical newsflow emanating from Ukraine and latest round of ceasefire talks in Saudi Arabia is a bottomless source of market uncertainty. This was always going to be the case, and I was planning to discuss it all at length in the podcast. But an influx of reader questions on these topics in recent days confirms to my mind that warp speed geopolitical upheaval is the top issue of concern for market players and observers alike. The *Energy Flux* posts referenced in the pod are as follows: - [Burning the house down](http://Burning the house down) - [The bear roars](https://www.energyflux.news/p/the-bear-roars) - [The ‘wild card’ for TTF in 2025](https://www.energyflux.news/p/the-good-the-bad-and-the-ugly?utm%5Fsource=publication-search) - Sizing up the LNG glut — parts [one ](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-1)and [two](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-two) Happy listening :) — Seb P.S. Apologies if audio quality is not perfect, I’m still finding my feet with recording equipment and software. [Leave a comment](#ghost-comments-root) --- # More from *Energy Flu*x: [Regulatory schizophreniaThe European Union’s regulatory machinery, ever-slow to course correct, may finally be lurching towards something resembling sense.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f8dab4079-084f-4e18-8a62-f8bea0f4ede9_1024x1024.jpg)](https://www.energyflux.news/p/regulatory-schizophrenia) [🎧 A wild week in EU gas marketsPLUS: The correlation between TTF and Henry Hub![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/video_upload/post/158149863/5fc27e92-5681-4d57-8ed0-d4800dd52ef1/transcoded-1740795886.png)](https://www.energyflux.news/p/a-wild-week-in-eu-gas-markets) [Dismantling the EU’s flawed equity LNG plan\* I dissected the EU’s plan to invest in LNG projects on the podcast this weekend. This Hot Take distils the main message.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/public/images/530092d6-ce65-4868-b931-9644be3c4fe6_1792x1024.jpg)](https://www.energyflux.news/p/dismantling-the-eus-flawed-equity) ### Burning the house down URL: https://www.energyflux.news/burning-the-house-down/ Last updated: 2025-06-17T09:33:34.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/68607c19-ea56-4ee0-bc1a-402b3dd448b1_1349x445.png) [Subscribe now](https://www.energyflux.news/subscribe) **Hedge funds are fleeing the European gas market faster than at any time since records began.** Investment funds offloaded a whopping 57 TWh of net long positions last week on Dutch TTF, the benchmark gas trading hub for most of Europe. That volume of paper gas bets is equivalent to the entire annual consumption of Greece, gone up in smoke. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/117766e0-6054-4398-afe1-0b3ef6596df7_1707x1024-jpeg-5.jpg) **TTF gas bulls: burning to the ground, or rising from the flames? Image by DALL-E* This episode marks the third successive week of selloffs. Since 10 February, funds have offloaded 118 TWh of net length and triggered a 25% price correction. In other words, hedge funds have **torched €8 billion of bullish gas positions** in three chaotic weeks. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a4f3ed48-d383-42bc-b501-73cd2bc40c52_5660x2704.png) **The European gas market has literally never seen anything like this.** Technically, there was a deeper selloff in April 2021\. But that mass liquidation event was immediately followed by a surge in rebuying. That event was a blip. This appears to be something much deeper. Investment funds are probably the single biggest driver of TTF price action. Last week’s unprecedented exodus strongly suggests the bull run that began in early 2024 has finally run its course. However, there is a growing risk of over-correction stemming from extreme fund movements. This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) crunches the numbers from the latest ICE Endex Commitment of Traders report to gauge market momentum and tease out underlying trends. It includes: **đŸ’„ Granular analysis:** Long, short and net position changes for Investment Funds & Commercial Undertakings âžĄïž *Who is selling what, and why?* **đŸ’„ The TTF Sentiment Tracker**: Regression analysis of weekly fund movements vs price action âžĄïž *What does a strengthening correlation tell us?* **đŸ’„ Historical context**: Changes in net positions have shaped pricing regimes since 2020 âžĄïž *Are we in a new market phase?* **đŸ’„ Underlying drivers**: Geopolitics and EU regulations are pulling in opposite directions âžĄïž *Which one has the upper hand?* This datavis-packed update gives you chapter and verse on the European gas market at this critical juncture. [Subscribe now](https://www.energyflux.news/subscribe) for full access. *Article stats: 2,000 words, 9-min reading time, 15 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### 🎧 A wild week in EU gas markets URL: https://www.energyflux.news/a-wild-week-in-eu-gas-markets/ Last updated: 2025-05-14T15:04:25.000Z 🎧 A wild week in EU gas markets 0:00 /200 1× Welcome back to [**Energy Flux: On Air**](https://www.energyflux.news/podcast), the interactive podcast that delves into the world of European natural gas and global LNG markets. The big story of the week was the wild rollercoaster on Dutch TTF, the European benchmark. I dig into what caused the epic price swings, drawing on my analysis from Thursday’s subscriber-only [EU LNG Chart Deck](https://www.energyflux.news/p/the-bear-roars). In response to a reader question, I also discussed the correlation between TTF and Henry Hub — the benchmark for natural gas in North America — and how this is evolving with the unstoppable rise of US LNG. Don’t forget to send me your questions, comments and observations for the next episode. I read everything, and love hearing from listeners. Just hit reply to any email, drop a line in one of the [Chat Threads](https://substack.com/chat/74367?ref=energyflux.news), or send me a direct message. Remember, you can also listen to the podcast on your favourite platform: - [Apple](https://podcasts.apple.com/us/podcast/energy-flux-on-air/id1795806284?ref=energyflux.news) - [Spotify](https://open.spotify.com/show/45u2QbOOtfXDwLZ6oDyvuW?si=83c47ed6d6874f10&ref=energyflux.news) - [YouTube](https://www.youtube.com/playlist?list=PLcDbICh3ZDbkZl0JC1VE4sCs6jzREGp1V&ref=energyflux.news) - Or just search for **Energy Flux: On Air** wherever you get your podcasts Happy listening! — Seb --- # More from *Energy Flux*: [The bear roars!TTF selloff gains pace, but regulatory standoff sets the stage for a rebound | EU LNG Chart Deck: 27 February 2025![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/public/images/803e8027-fc14-4deb-a870-6ac5dd6ef544_1496x1024.jpg)](https://www.energyflux.news/p/the-bear-roars) [Regulatory schizophreniaThe European Union’s regulatory machinery, ever-slow to course correct, may finally be lurching towards something resembling sense.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f8dab4079-084f-4e18-8a62-f8bea0f4ede9_1024x1024.jpg)](https://www.energyflux.news/p/regulatory-schizophrenia) [🎧 Europe is waking up to the TTF speculation problemWelcome back to Energy Flux: On Air, the interactive podcast that delves into world of European natural gas and global LNG markets.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/video_upload/post/157662102/6ba814af-991e-4e77-9ce4-9830e4d6ce73/transcoded-1740196341.png)](https://www.energyflux.news/p/europe-is-waking-up-to-the-ttf-speculation) ### The bear roars! URL: https://www.energyflux.news/the-bear-roars/ Last updated: 2025-06-17T09:34:42.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ba9d7d9a-6681-497b-9636-67a15d2b1572_1349x445.png) **What a fortnight! Bearish sentiment has swamped the European gas market, dragging prices to 10-week lows. What’s driving the correction, and how much further will it run?** [Subscribe now](https://www.energyflux.news/subscribe) The dramatic reversal is still gaining pace: Dutch TTF, the European benchmark gas hub, has fallen by one fifth since it peaked at €58 per MWh on 10 February. The front-month contract (Mar-25) lost 12% this week alone, dipping to €41/MWh ($13/MMBtu) on Tuesday. These are prices not seen since mid-December, before the loss of Ukraine gas transits. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/8a94119a-a23c-40f5-9e2b-60078b02e6ec_3510x1905.png) The most significant aspect of this reversal is the narrowing of the summer-winter spread. The summer 25 contract is now trading at less than €1 above winter 25-26, having peaked above €6 just a few short weeks ago. For next year, the summer 2026 contract is back below the following winter (i.e. a return to seasonal ‘normal’). Independent analyst John Kemp captured the summer-winter spread collapse in this exquisite chart: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a40e5b61-91f0-4d4e-8369-73172c12a787_1211x782.png) Chart by John Kemp / [Best in Energy](https://jkempenergy.com/?ref=energyflux.news) Regular readers will be well aware that the negative spread was fuelled by speculative capital [sloshing into long summer positions](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) in a bid to corner the refilling market. Yes, the current correction is (predictably) nothing to do with supply-demand fundamentals and everything to do with investment funds: the speculative ‘tourists’ with deep pockets taking directional bets on TTF gas futures big enough to move the market. The only thing sustaining the 2024 bull run into 2025 was the expectation of heightened competition for liquefied natural gas (LNG) over the summer to achieve the EU’s 90% refilling target by 1 November. That reality has not diminished; EU-wide gas storage levels are below 40%. While not abnormally low by historic standards, refilling to 90% still poses a challenge in the absence of Russian pipeline gas inflows. High-level machinations around a *possible* relaxation of the gas storage regulation captured the imagination of newspaper editors, with a slew of misleading headlines suggesting the European Commission has acquiesced to member state demands to lower the 2025 target. Investment funds are in panic mode because they trade on headlines and fear regulators are about to pull the rug from under their epic TTF long position. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/9b10373e-1b2b-4e3a-b305-02790f00ac5e_4005x2019.png) However, the situation is more nuanced than fund movements suggest. A closer inspection of regulatory overtures from Brussels tells us that the EU gas market is (as usual) trading on incomplete information. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/80149d4a-a8d4-4a12-b8b1-29c4e11f2d48_1496x1024-jpeg.jpg) Don’t believe everything you read about EU gas regulations. Composite image by DALL-E / Bing Creator This special [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) sets the record straight. It reveals what’s *really* driving the TTF selloff, why the investment funds are at risk of over-reacting, and what we know (and don’t know) about the EU’s ongoing review of gas storage regulations. It also explores how the TTF selloff is impacting: - **Global LNG trade flows and cargo diversions** - **The TTF-JKM spread and US-Asia arbitrage across the futures curve** - **Shifting EU LNG netbacks from global FOB locations** - **The competitiveness of Asian spot LNG versus oil-indexed contracts** If you’re looking for a balanced and comprehensive assessment of how Europe’s febrile gas market is reshaping global LNG trade dynamics, this post is for you. [Sign up now](https://www.energyflux.news/subscribe) for full access, and support independent energy market analysis. [Subscribe now](https://www.energyflux.news/subscribe) đŸ’„ *Article stats: 2,300 words, 11-min reading time, 18 charts and maps* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Dismantling the EU’s flawed equity LNG plan URL: https://www.energyflux.news/dismantling-the-eus-flawed-equity/ Last updated: 2025-09-11T19:33:59.000Z HOT TAKE: The EU wants to gamble taxpayer money on US LNG at the worst possible moment _This post is for subscribers on the Premium tier only._ ### 🎧 Europe is waking up to the TTF speculation problem URL: https://www.energyflux.news/europe-is-waking-up-to-the-ttf-speculation/ Last updated: 2025-05-14T15:04:54.000Z 🎧 Europe is waking up to the TTF speculation problem 0:00 /200 1× Welcome back to [**Energy Flux: On Air**](https://www.energyflux.news/podcast), the interactive podcast that delves into world of European natural gas and global LNG markets. The main story featured in this week’s show is: - Italy calls for EU investigation into speculation on TTF inflating gas prices ([Montel News](https://montelnews.com/news/e7b0db7d-cf29-4a11-8c7a-ebb0028508d0/italy-urges-probe-into-possibility-speculators-inflating-gas?ref=energyflux.news), [QualEnergia](https://www.qualenergia.it/articoli/cosa-aspettarsi-decreto-contro-caro-energia/?ref=energyflux.news)) In response to reader questions, I discussed: - The EU Commission’s draft plan to consider US LNG equity investments to ward off Trump trade war ([Politico](https://www.politico.eu/article/eu-funding-foreign-lng-projects-lower-prices-draft-plan-commission/?ref=energyflux.news)) - The impact of Trump’s incoming 25% steel tariff on US LNG projects - Outlook for prices during the LNG ‘glut’ and potential for demand response from Asian buyers - The excess LNG problem: Japan’s LNG buyers are over-contracted ([IEEFA](https://ieefa.org/resources/japans-largest-lng-buyers-have-surplus-problem?ref=energyflux.news)) I also referenced the following *Energy Flux* articles: - Gas, carbon and the geopolitical web ([link](https://www.energyflux.news/p/gas-carbon-and-the-geopolitical-web)) - Sizing up the LNG glut (part [one ](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-1)and [two](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-two)) Happy listening! — Seb [Leave a comment](#ghost-comments-root) P.S. If you want to ask a question or make a comment for the next episode, send me a message. I prioritise Q&A requests from paying subscribers 😇 --- # More from *Energy Flux*: [TTF selloff: tactical pause?Investment funds liquidated a sizeable chunk of their gargantuan net long position in European gas futures last week, as the front TTF month contract crashed by 12% across three hectic trading sessions.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/public/images/6e670e76-d6fc-445d-95c6-8b3e1e4d273f_1024x1024.jpg)](https://www.energyflux.news/p/ttf-selloff-tactical-pause) [Regulatory schizophreniaHOT TAKE: EU mulls relaxation of gas refilling targets, as industry rejects THE’s restocking subsidy folly. But price cap revival muddies waters.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f8dab4079-084f-4e18-8a62-f8bea0f4ede9_1024x1024.jpg)](https://www.energyflux.news/p/regulatory-schizophrenia) [Sell the rumour

buy the news? | EU LNG Chart Deck: 18 February 2025![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f38f0de7d-17d1-40b8-8ac4-ed17d9f167b6_1024x1024.jpg)](https://www.energyflux.news/p/sell-the-rumour) ### TTF selloff: tactical pause? URL: https://www.energyflux.news/ttf-selloff-tactical-pause/ Last updated: 2025-06-17T09:37:33.000Z HOT TAKE: Hedge funds liquidate big chunk of TTF long position, but this is not a structural reversal — yet _This post is for subscribers on the Premium tier only._ ### Sell the rumour
 URL: https://www.energyflux.news/sell-the-rumour/ Last updated: 2025-06-17T09:37:59.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/3529dcbd-caba-42fb-8e45-ef481499f761_1349x445.png) [Subscribe now](https://www.energyflux.news/subscribe) **European natural gas prices are at an inflection point. Tectonic shifts across the regulatory and geopolitical landscape are — finally! — starting to deflate the bloated risk premium and correct the inverted summer-winter spread.** **But with traders seemingly giving credence to unconfirmed bearish news, there is potential for a rebound if the downside risks that triggered the selloff fail to materialise.** Speculation is swirling around the potential for a Trump-brokered Ukraine peace settlement to pave the way for a resumption of Russian pipeline gas imports into central and eastern Europe. Less likely, but not impossible, is a relaxation of Western sanctions against Russian LNG as a bitter sweetener for the Kremlin. At the same time, member states are now speaking openly about the need to relax the EU’s 2025 summer gas storage refilling targets. They have woken up to the market-distorting effects of the inflexible mandate to hit 90% by 1 November. Relaxing or removing the regulation could trigger investment funds to sell down most if not all of their enormous 292 TWh net long TTF position. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/38f0de7d-17d1-40b8-8ac4-ed17d9f167b6_1024x1024-jpeg-4.jpg) Image by Bing Creator However, neither of these eventualities — relaxed storage regulations or a return of Russian gas — is guaranteed to prevail. The more that the market softens or trades sideways on the assumption that they are, the greater the risk of an inverse ‘buy the rumour, sell the news’ event later in the year. This risk could become acute if heatwaves send cooling demand surging across densely-populated Asian economies, triggering a summer tug-of-war for cargoes in the refilling season. This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) runs the rule over market reaction to recent (geo)political developments and how this has altered: > đŸ’„ **JKM-TTF spread** & US-Asia **LNG arbitrage** > > đŸ’„ **LNG netbacks** to Europe from global FOB export locations > > đŸ’„ **TTF summer-winter** seasonal spread & term structure > > đŸ’„ **Near-term directionality** ahead of new price regime in 2026 It also takes stock of: > đŸ’„ **EU gas storage** levels and ongoing regulatory discussions > > đŸ’„ **Austria’s gas pivot** since Ukraine transits ended > > đŸ’„ What to look out for in the next TTF **Commitment of Traders** report If you’re looking for a complete and nuanced picture of European gas in the context of the global LNG market at this critical juncture in energy geopolitics, this datavis-heavy post is for you. [Subscribe now](https://www.energyflux.news/subscribe) for full access. [Subscribe now](https://www.energyflux.news/subscribe) đŸ’„ *Article stats: 2,000 words, 9-min reading time, 11 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Regulatory schizophrenia URL: https://www.energyflux.news/regulatory-schizophrenia/ Last updated: 2025-06-17T09:38:28.000Z **The European Union’s regulatory machinery, ever-slow to course correct, may finally be lurching towards something resembling sense.** [Subscribe now](https://www.energyflux.news/subscribe) EU member states and industry lobbyists will meet this morning at the Gas Coordination Group in Brussels to discuss the possible relaxation of the EU’s 2025 gas storage refilling targets. Pressure is mounting to ease the rigid requirement to replenish the EU’s fast-depleting underground gas storage facilities to 90% by 1 November 2025. The move comes after a group led by Germany, Italy, and the Netherlands pushed back against EU plans to renew the restocking targets for 2026. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/8dab4079-084f-4e18-8a62-f8bea0f4ede9_1024x1024-9.webp) **A heated meeting in Brussels. Image by DALL-E* After two years of clinging to rigid targets, Brussels is belatedly waking up to the problem its well-intentioned regulation created. The policy served as a neon sign to speculators to open [aggressively bullish long positions](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) in the summer refilling season. The effect was the inversion of the summer-winter spread, rendering gas storage uneconomic and the targets impossible to achieve without [massive subsidies](https://www.energyflux.news/p/germany-bites-the-gas-storage-bullet). With front-month TTF flirting with €60/MWh earlier this week, the cost of achieving the 90% target is currently estimated at roughly €36 billion. That’s an increase of €2 billion in barely three weeks. Investment funds are betting heavily that EU member states will cough up. They have amassed 292 TWh of net length in TTF gas futures with a nominal value of almost €16 billion, according to the latest Commitment of Traders report from ICE Endex and calculations by *Energy Flux*. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/f2993ed1-9ac4-4024-bcd8-d3e34a876d60_5916x2900.png) The trade is as transparent as it is cynical: capitalise on the EU’s predictable, self-imposed desperation to refill underground gas storage caverns at any cost, and repatriate the easy winnings to overseas clients. When policy makes it this easy, who is really to blame? ## Timing is everything Having essentially created this problem, policymakers hold all the cards. Now, with tentative signs that the bloc might be inching toward dismantling this obvious folly, timing will be everything. Here’s why, and what to look out for. _This post is for subscribers on the Premium tier only._ ### 🎧 The Energy Flux podcast 🎧 URL: https://www.energyflux.news/the-energy-flux-podcast/ Last updated: 2025-12-22T17:23:47.000Z 🎧 The Energy Flux podcast🎧 0:00 /200 1× Hi there, I am very excited today to be relaunching the Energy Flux podcast đŸ„ł After the overwhelmingly positive response to my recent run of [podcast appearances](https://www.energyflux.news/p/on-the-air), I realised there is huge appetite for audio format news and commentary. As I explain in this introductory episode, the concept is simple: chat through the most interesting headlines and market events of the week, and respond to any questions and observations mailed in from readers. This won’t be a super-slick polished production, but rather a discreet space for people to tune in and engage with *Energy Flux* in audio form. I’m still figuring out the schedule, length and frequency, but didn’t want to let small details stand in the way of actually getting started. So here goes! If you have any burning questions you would like me to tackle in the next episode, just hit reply to any email. Thanks for listening, — Seb --- # More from *Energy Flux*: [On the AirI love talking energy. Here’s an evergreen list of recent podcast and media appearances.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/public/images/f7e6e16b-dbd7-49ba-84fd-ddcb6dca67cf_1458x781.png)](https://www.energyflux.news/p/on-the-air) [The storage-speculation nexus (part 2)DEEP DIVE: Data analysis reveals how hedge funds are positioned to exploit lax regulation and profit from EU gas storage targets![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/public/images/ad25b1fd-bc0c-42bd-98d4-c17c46bac653_1792x1024.jpg)](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) [Sizing up the LNG glut (part 2)DEEP DIVE: The future of energy ain’t what it used to be![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com_2fpublic_2fimages_2f25128294-e926-479c-990f-e3863a34ca36_200x200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/image/fetch/f_auto-q_auto:good-fl_progressive:steep/https_3a_2f_2fsubstack-post-media-s3-amazonaws-com_2fpublic_2fimages_2f6e34a09b-4940-4481-b855-0f82a4c9acaa_1024x1024.jpg)](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-two) ### Sizing up the LNG glut (part 2) URL: https://www.energyflux.news/sizing-up-the-lng-glut-part-two/ Last updated: 2025-06-17T09:39:07.000Z **In the depths of the 2025 winter, the notion of an LNG ‘glut’ might feel like a fantasy; a bedtime story to help panicked buyers and politicians sleep at night, as a tsunami of geopolitical and fundamental forces whips European natural gas prices back to the destructive highs of 2023.** **Yet here lies the paradox: today’s scarcity and tomorrow’s surplus are not opposing forces, but two chambers of the same hourglass — one depletes only to fill the other, like an unbroken cycle of inevitability.** [Subscribe now](https://www.energyflux.news/subscribe) The market is caught in a hall of mirrors. Every tremor — a sudden cold snap in Beijing, a wind lull in the North Sea, a Russian gas valve tightened ‘off’, an outrageous speech designed to inflame Middle East tensions further — distorts the view of what comes next. The long-anticipated LNG glut is both a mirage and a mathematical certainty, a future so inevitable that shellshocked policymakers and impossibly bullish speculators dare not contemplate it — even as the world’s next wave of LNG megaprojects creeps toward completion like glaciers sliding into the rapidly warming sea. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/6e34a09b-4940-4481-b855-0f82a4c9acaa_1024x1024-jpeg-2.jpg) Image by Bing Creator This is a story of time horizons colliding. The present is governed by the raw physics of winter and the blinding psychology of war, where the profit from each LNG cargo is spiralling above $35 million, and import-dependent nations hoard these precious molecules as if they were sovereignty incarnate. But the future hums with a different calculus: more than 200 million tonnes of new LNG capacity, now under construction, could flood the market before 2030\. The same ships steaming across the Atlantic to feed shivering European cities may soon idle laden in northern hemisphere seaports, waiting for a murmur of a contango. The pendulum will swing from famine to feast — but how fast, how far, and with what consequences? To trace LNG’s arc from 2025’s fever dream to 2030’s reckoning is to confront more than supply-demand curves. It is to ask which version of the 21st century is starting to prevail at this precarious moment in history. - Will Asia’s booming billions embrace liquefied natural gas to fuel their industrialisation and aspirational middle classes, or double down on domestic coal and renewables? - Will Europe’s green dogma survive a neopopulist backlash after almost a decade of energy poverty? - Can Qatar and Texas coexist in a market where margins dissolve? - For how long will the pocked dam of Western sanctions hold against the developing world’s clamour for forbidden Eurasian and Persian resources? The LNG glut is diminishing in our minds even as it looms into view. But before internalising this inexorable phase shift in reality, we must first survive the squeeze. This mini-series started as an attempt to gauge the likely length and depth of oversupply, and what might follow. It quickly ran into impossibly complex questions at the heart of the energy transition. 1. [Part one](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-1) set the scene by applying an historical lens to how the transition to looser market conditions might unfold. 2. **Part two** (this post) grapples with conflicting visions of the future — the narratives that will define role of LNG in a fracturing world where every choice is a gamble with compounding stakes and fractal outcomes. This is the most complete and nuanced take on the long-term future of LNG in the global energy matrix that you are likely to read all year. It is the product of long conversations with leading energy thinkers and commercial analysts, and countless hours of rumination over how to reconcile myriad countervailing economic, commercial and geopolitical forces at play. [Subscribe now](https://www.energyflux.news/subscribe) for full access, and support truly independent energy journalism. đŸ’„ *Article stats: 3.500 words, 16-min reading time, 9 charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### The future growth of LNG URL: https://www.energyflux.news/the-future-growth-of-lng/ Last updated: 2025-06-17T09:40:04.000Z I had the immense pleasure of appearing on the **Redefining Energy** podcast recently, with hosts Laurent Segalen and Gerard Reid. We discussed the future growth of LNG — the inherent volatility of this commodity, the demand outlook in Asia, the future of US shale, untapped gas reserves in geopolitical hotspots, and many other topics. If you missed it, you can listen to the episode here on Apple: And on Spotify: We covered a lot of ground in 30 minutes. The conversation was the spark of inspiration for my two-part miniseries, [Sizing Up The LNG Glut](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-1). Part one is available [here](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-1), and part two is due out next week. (I had hoped to publish the second instalment this week, but it is a complex topic and I want to do it justice.) [Subscribe now](https://www.energyflux.news/subscribe) --- ### Heading for the scrapheap? Following last week’s news about [zero/negative freight rates](https://www.energyflux.news/p/lng-shipping-rates-go-negative), I noticed some interesting comments from shipping company Flex LNG. Speaking on an earnings call, CEO Oystein Kalleklev called for old steam engine vessels to be scrapped: > *“Rates for steam tonnage
 it’s actually zero. So we have been talking about this for a long time. *It's overdue scrapping cycle for steam tonnage*. These ships have been surviving because you have had generally quite good markets, especially in '22 and '23 and into at least the 
 first quarter of '24\. So given the slump in the market and making these ships unattractive, *we do expect to see a big uptick in scrapping this year, next year and the coming years,* driven not only by economics, but also by environmental rules which put a disadvantage on these ships.”* Kalleklev also spoke out against Trump’s trade war with China, which triggered Beijing to impose retaliatory tariffs against US LNG. > *“it's not very constructive with the trade rhetoric from Trump, which tend to scare away buyers because if suddenly there are tariffs, that might make it uneconomically to take those LNG cargoes to those import nations, who have acquired them. So *we would like to see a toning down of the trade rhetoric* that would be very helpful for LNG market for sure.* China is proposing a 15% US LNG tariff if Trump follows through on his threat to slap a 10% levy on all Chinese imported goods. The tariffs are due to come into force on Monday. Market impact is unclear at this stage; last time Trump did this, Beijing imposed a 25% tariff and Chinese imports of US LNG slumped to zero for several months. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/92c762a3-da06-469c-bce7-a5b1c95ff88e_6106x2897.png) However, Chinese buyers of US LNG are heavily incentivised to deliver these cargoes to Europe in any case due to more favourable economics versus shipping to Asia. US LNG would still be in the money in China compared to current Asian LNG spot prices, even with a 15% tariff. The biggest losers would be proposed new American LNG export projects at the planning/pre-investment stage. No Chinese buyers would sign sales and purchase agreements (SPAs) in the middle of a US-China trade war, and this might hold up investment in new capacity. The market can afford a degree of delay and attrition to new supply that might otherwise come online towards the end of decade, when ‘peak glut’ is likely to have passed. At the same time, the broader macroeconomic impacts of a trade war are bearish for energy and commodities more generally. --- ### Storage rethink The inverted summer-winter spread on Dutch TTF [narrowed this week](https://x.com/JKempEnergy/status/1887099666132562075?ref=energyflux.news) after [reports emerged](https://www.bloomberg.com/news/articles/2025-02-04/group-of-eu-countries-hold-talks-on-relaxing-gas-storage-targets?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTczODc3MDA3NiwiZXhwIjoxNzM5Mzc0ODc2LCJhcnRpY2xlSWQiOiJTUjVRUjhEV1gyUFMwMCIsImJjb25uZWN0SWQiOiJBQjY0QzMyRDYyRjQ0NENDQjg2ODEzQkZFQzA3OEJBOSJ9.5%5FrUbCRFSL1NP-V7UL%5F6hXk72%5FO5jLY15Oe5bq7FRtE&ref=energyflux.news) that a group of EU member states is discussing the possible relaxation of the EU’s misguided gas storage regulations. The distortions arising from rigid gas refilling targets are by now [well documented](https://www.energyflux.news/p/germany-bites-the-gas-storage-bullet), so it is good to see this being discussed at the highest level. What’s perplexing is that any mooted relaxation would apply to the 2026 refilling season, so if anyone can explain why that should be moving the 2025 spread please let me know in the comments. [Leave a comment](#ghost-comments-root) I’ll be diving deep into some of these topics in next week’s instalment. — Seb --- # More from *Energy Flux*: [Germany bites the gas storage bulletHOT TAKE: TTF surges above €50/MWh on Berlin’s new storage subsidy mechanism![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-81.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/b644f5c1-5526-4e46-8784-e1c6544551f5_1024x1024-1.webp)](https://www.energyflux.news/p/germany-bites-the-gas-storage-bullet) [The storage-speculation nexus (part 2)DEEP DIVE: Data analysis reveals how hedge funds are positioned to exploit lax regulation and profit from EU gas storage targets![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-82.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ad25b1fd-bc0c-42bd-98d4-c17c46bac653_1792x1024-jpeg-19.jpg)](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) [On the AirI love talking energy. Here’s an evergreen list of recent podcast and media appearances.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-83.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/f7e6e16b-dbd7-49ba-84fd-ddcb6dca67cf_1458x781-5.png)](https://www.energyflux.news/p/on-the-air) ### LNG shipping rates ‘go negative’ URL: https://www.energyflux.news/lng-shipping-rates-go-negative/ Last updated: 2025-06-17T09:40:48.000Z [Subscribe now](https://www.energyflux.news/subscribe) **Who wants a free LNG vessel? You can’t even give them away these days.** The cost of chartering specialised cryogenic ship for transporting liquefied natural gas (LNG) is plumbing new depths, amid an acute oversupply of tonnage. Spot charter rates fell within a whisker of $0 per day this week, market sources told *Energy Flux,* and there is talk of negative rates in the Atlantic basin. Official price assessments are not quite below zero yet, but it is a distinct possibility. Downward pressure is expected to intensify in the coming weeks and months. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/5a01bdcb-b9c7-4ea2-b481-8e0de0825ac0_1024x1024-jpeg-1.jpg) **Holed below the waterline. Image by DALL-E* This midweek bonus post explores why LNG freight rates are going through the looking-glass, who are the winners and losers, and what this means for European gas and power markets. [Subscribe now](https://www.energyflux.news/subscribe) for full access. *Article stats: 1,500 words, 8-min reading time, 2 charts* _This post is for subscribers on the Premium tier only._ ### Sizing up the LNG glut (part 1) URL: https://www.energyflux.news/sizing-up-the-lng-glut-part-1/ Last updated: 2025-06-17T09:41:38.000Z **With the aftershocks from 2022 still reverberating, the liquefied natural gas market is awash with tension and uncertainty. Before much longer, it will be awash with surplus LNG too.** The United States and Qatar are racing to flood energy markets with a record 40% increase in liquefaction capacity by 2030\. But when exactly will this supply wave start to loosen global balances? And when it does, how deep and long might the ensuing glut be? [Subscribe now](https://www.energyflux.news/subscribe) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/68626d49-807f-4def-992a-7f8f0d4a0c7b_1247x831-jpeg-7.jpg) **LNG vessels riding the crest of a sine wave. Image by Bing Creator* ## LNG tsunami The coming supply wave is, frankly, immense. Qatar is building out 48 million tonnes per annum (mtpa) by 2028, and the US has almost 80 mtpa under construction. Together with Mozambique, Canada and others, that’s enough to meet the annual LNG import requirements of China, Japan and South Korea *combined*. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/be56fa23-b6b4-421e-a16c-967439320969_4273x2079.png) **Chart © Energy Flux 2025* The International Energy Agency, in its 2024 World Energy Outlook, said LNG supply could exceed demand by 18% in 2030 under its ‘STEPS’ (Stated Policies) scenario. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ada0e59a-a6e1-40c3-a2c2-29233af6ebf9_974x658.png) **Chart: IEA WEO 2024* This implies a glut of 125 billion cubic metres of gas, or roughly 92 mtpa of LNG, in the space of five years. To put that into context, 92 mtpa is comparable to the combined annual imports of China and India, meaning LNG sellers must somehow find another China-plus-India-worth of consumption to absorb the surplus they are about to dump onto the water. To balance the market, European wholesale natural gas prices could fall by more than half in the next two years. If decarbonisation policies weigh more heavily on demand growth, the surplus — and price correction — will be that much greater. ## Wishful thinking? However, that doesn’t tell the whole story. For a start, demand might not follow the STEPS scenario. STEPS assumes higher fossil fuel consumption than other more climate-hawkish IEA scenarios, but its projection of global energy demand growth deceleration is still somewhat aspirational compared to historic trends. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/49f1da23-a61a-417a-ad92-435680612ccb_8422x6975-jpeg.jpg) **Chart: Statem Consulting / Tatiana Kahnberg* On the supply side, many LNG projects due online before 2030 are sliding to the right. US sanctions [hobbled](https://www.energyflux.news/p/russia-coup-arctic-lng-2-sanctions-natural-gas) Russia’s flagship Arctic LNG-2 project; Golden Pass LNG in Texas ran into [major construction delays](https://www.energyflux.news/p/bursting-the-narrative-bubble); and Mozambique LNG has been beset by so many security and humanitarian crises that it might never be built. ## From feast to famine Supply-demand projections from high-profile consultancies tell a very different story to the IEA WEO. Rystad, for instance, depicts only a very brief and shallow period of oversupply in 2030, and any excess is quickly gobbled up by insatiable Asian demand growth — leaving a supply *deficit* by the mid-2030s under a 1.9 degree warming scenario. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/32ce06ca-5759-4a8f-8527-94406592faaf_1287x638.png) **Chart: Rystad* Similarly, Wood Mackenzie sees a deficit emerging as early as 2030: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/dd9ee3f6-3d40-424e-9a05-b8e4b5901459_1486x572.png) **Chart: Wood Mackenzie* [Subscribe now](https://www.energyflux.news/subscribe) So, how should impartial observers parse these vastly different visions of the future? Is the LNG ‘glut’ just another narrative, an intoxicating mirage in the minds of energy-shocked Europeans? Could the market really lurch into another global LNG ‘drought’ in the early 2030s — and if so, might this even create the conditions for a new LNG supercycle next decade? Perhaps both of these visions are misleading. This new multi-part [**Deep Dive**](https://www.energyflux.news/t/deep-dive) takes a wide-angle lens to gauge the contours of the LNG ‘glut’. 1. **Part one** (this post) reviews previous LNG supercycles to put the current market phase into historic context. > *—> This perspective offers a new way of thinking about how the shift to a new global gas price regime could unfold.* 2. **Part two** (available [here](https://www.energyflux.news/p/sizing-up-the-lng-glut-part-two)) identifies the main drivers of supply and demand growth and how these intersect with cost and price curves. > *—> This analysis is key to reconciling conflicting perspectives of the duration and depth of any surplus.* The series is informed by conversations with numerous experts and analysts on: - policy and commercial trends driving fuel choices in key LNG demand regions - the interaction between structural price movements and demand growth - the cost of new LNG supply versus affordability in target markets If you’re curious about the macro-outlook for LNG in a fast-changing energy world, this post is for you. [Subscribe now](https://www.energyflux.news/subscribe) for full access. *Article stats: 2,500 words, 12-min reading time, 11 charts and graphs* [Subscribe now](https://www.energyflux.news/subscribe) ## What is a supercycle, and are we in one now? To understand the coming ‘glut’, we must first understand the cyclical nature of the LNG industry and how we got where we are. _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Germany bites the gas storage bullet URL: https://www.energyflux.news/germany-bites-the-gas-storage-bullet/ Last updated: 2025-06-17T09:42:33.000Z **Never underestimate the ability of German bureaucrats to find a way to make an impossibly bad situation even worse.** [Subscribe now](https://www.energyflux.news/subscribe) German gas market operator Trading Hub Europe (THE) unveiled a [subsidy mechanism](https://www.tradinghub.eu/Portals/0/12.11.2024/250121%20Ausgestaltung%20SBI%5FBef%C3%BCllprodukt%202025%5FWebseite%20und%20Verb%C3%A4nde.pdf?ver=QwAAMRz7MzWCnog8vcVDZw%3d%3d&ref=energyflux.news) on Tuesday to ensure German gas storage facilities are full by 1 November. The Germany-wide mechanism will operate as an auction in which gas suppliers offer volumes at a €/MWh price deemed to be economic for filling storage at current seasonal spreads. The offer price is compared with the actual summer-winter spread, and any shortfall is topped up by way of a subsidy payment to make the supplier whole. Market reaction was instantaneous: Dutch TTF, the EU gas benchmark, surged above €50/MWh for the first time this year. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/92966498-f4b0-47a6-945e-91009a547e4b_1413x686.png) **Source:* [**ICE*](https://www.ice.com/products/27996665/Dutch-TTF-Gas-Futures/data?marketId=5815810&span=1&ref=energyflux.news) The market read the policy as a signal that gas suppliers will effectively buy spot gas at any price without forward hedging for winter withdrawal, because German taxpayers will pay the difference. As a result, prompt TTF surged to a new 2025 high and the Winter 25-26 contract registered only marginal gains — propelling the (already heavily inverted) summer-winter seasonal spread well below -€3/MWh. A restocking subsidy is precisely the sort of pitiful arrangement that *Energy Flux* flagged this week as necessary if the increasingly problematic EU gas refilling targets are to be achieved: > *“Unless prompt TTF prices fall much further, storage operators would need to (a) wear the risk of financial shortfall, (b) ask the Commission to make them whole, or (c) simply not achieve the target and suffer the consequences — which, as explored last year, are not particularly severe.” — Energy Flux (*[*New Year, Old Realities*](https://www.energyflux.news/p/new-year-old-realities)*)* Granted, in this case it is Germany’s state-owned THE offering the subsidy rather than the Commission. But the point stands that the EU refilling targets were distorting the market to such an extent that bureaucrats felt a fresh distortion was the only rational course of action to achieve the desired outcome. Perish the thought of actually fixing the underlying problem. This is a classic case of the medicine being worse than the disease. Germany’s ‘fix’ creates an even more acute problem for everyone else. [On Monday](https://www.energyflux.news/p/new-year-old-realities), *Energy Flux* calculated the cost of EU-wide refilling to 90% could weigh in at a cool **€32.4 billion** if TTF averages €47/MWh over the summer months. With TTF now flirting with €50/MWh, the implied cost has edged close to **€34 billion**. Moreover, the extremely inverted summer-winter spread makes this an even more loss-making exercise for refilling non-German gas storage facilities. If summer gas is bought at €49.50/MWh and hedged for winter withdrawal at €44.9/MWh, the implied loss *just on the fuel procurement* is in the region of €3 billion. Once you add in the cost of injection, storage and withdrawal, the loss would be even greater. Other member states must be looking at this (excuse my German) *komplette* *Scheißshow* in dismay. They will either have to follow Germany’s lead and introduce their own gas storage subsidy, or throw in the towel and pass the buck to the Commission. There is no way they can expect storage operators to swallow implied refilling losses of this scale without some form of assistance. The most pragmatic course of action — which stands precisely zero chance of being implemented — is for the European Commission to own this mess and overhaul its entire gas storage policy. There is no shortage of smart alternatives to managing Europe’s invaluable gas storage assets. Simply reverting to a market-based approach would be better than enriching gas producers and traders at consumer/taxpayer expense to guarantee a security of supply that is no longer at risk. *Enjoying this post? Sign up for free or paid emails from Energy Flux and support independent, outspoken market analysis* An even better solution, as detailed in this newsletter [last summer](https://www.energyflux.news/i/147971897/take-back-control), would be to create a dedicated EU gas storage commission to set and manage dynamic refilling targets that take into account prevailing market conditions. This ‘EU central gas bank’ would coordinate procurement across the EU rather than leaving it up to individual member states, which frequently compete for the same molecules during refilling season, driving up the price further. Then, long term supply contracts could be awarded after competitive tenders at the EU aggregate level, with the obligation to quote a fixed price indexed to inflation. The lowest cost supplier wins the contract, and stocks are refilled to the desired level at the agreed price. As Antonio Volpin of McKinsey suggested at the time: > *“This would deprive traders of the ‘buyer of last resort’ and the tenders might produce positively surprising results given the massive oversupply which is building up.”* But don’t hold your breath for anything remotely sensible being done to remedy this self-inflicted farce. EU Commissioners, either out of pride or ignorance, will stick to their rigid restocking targets in spite of the overwhelming mountain of evidence that it is doing more harm than good. Brussels and EU member states will join Germany in forcing European taxpayers to pony up to meet the EU’s arbitrary and unnecessary targets, lining the pockets of gas producers, traders and investment funds along the way. Chalk it up as just another day of consumer bloodletting at the alter of regulatory compliance. **Seb Kennedy | Energy Flux | 22 January 2025** [Leave a comment](#ghost-comments-root) --- # More from *Energy Flux*: [The storage-speculation nexusThe European Union has once again achieved its gas restocking target early. At an aggregate level, EU underground gas storage facilities reached 90% full this week, more than two months ahead of the 1 November deadline.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-93.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/4d3ac179-1e08-441e-97f9-fef3ef13334a_1024x1024-jpeg-10.jpg)](https://www.energyflux.news/p/the-storage-speculation-nexus) [The storage-speculation nexus (part 2)Anyone hoping that savvy EU regulators might step in to calm jittery European energy markets was sorely disappointed last week. The European Commission, in its infinite wisdom, introduced intermediate natural gas restocking targets that added fuel to the fire of bullish bravado raging in the winter gas market.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-94.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ad25b1fd-bc0c-42bd-98d4-c17c46bac653_1792x1024-jpeg-20.jpg)](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) [New Year, old realitiesWell, that didn’t last long. The end of Russian gas transits through Ukraine triggered, as predicted, a brief sell-off in EU gas futures in the first trading sessions of 2025\. But a fresh salvo of geopolitical headlines quickly reversed the losses, allowing the market to fixate on its next bullish pseudo-narrative.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-95.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/f440a27a-ec1b-4092-8601-e2dc1d233348_1024x657-jpeg-7.jpg)](https://www.energyflux.news/p/new-year-old-realities) ### New Year, old realities URL: https://www.energyflux.news/new-year-old-realities/ Last updated: 2025-06-17T09:43:40.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/41af31e7-10b4-4a81-8983-73f3fbaea878_1349x445.png) **Well, that didn’t last long. The end of Russian gas transits through Ukraine triggered,** [**as predicted**](https://www.energyflux.news/p/one-for-the-road-ttf-natgas-russia-ukraine-gas)**, a brief sell-off in EU gas futures in the first trading sessions of 2025\. But a fresh salvo of geopolitical headlines quickly reversed the losses, allowing the market to fixate on its next bullish pseudo-narrative.** Dutch TTF, the European gas benchmark, started 2025 in much the same way it ended 2024: with heightened sensitivity to scary-sounding but improbable supply-side risks rather than mundane physical realities. The narrative that dominated EU gas trade in 2024 was ‘how will Europe cope without Ukraine gas transits?’. When risk became reality, it was soon clear the sky would not fall in (spare a thought for Moldova, mind). So a new narrative was needed. Now, a parade of credible-looking analysts and pundits are sounding the alarm over EU gas storage levels amidst ‘the coldest winter in years’ (sic). No reflection on the fact that consumers are on the hook for a doubling in wholesale gas costs in 12 months, predicated largely on a supply risk that proved entirely manageable when it finally happened. Barely time to pause for breath, the fear factory waits for no-one. The conspicuous narrative pivot was aided and abetted by a flurry of ostensibly bullish news headlines in the first two weeks of the year, which halted the downward momentum. Front-month TTF settled at a low of €44.99/MWh ($13.58/MMBtu) on 9 January before rebounding into the €46-48/MWh range for most of last week. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/7193b464-00a7-4a58-b20f-2a74275a22bd_4264x1995.png) There is a lot to unpick in the way the market is balanced. This bumper New Year edition of the [EU LNG Chart Deck](https://www.energyflux.news/t/chart-deck) covers a lot of ground: - News flow since 1 January & market reaction on Dutch TTF - Hedge fund positioning before/after Ukraine transits halt - Negative US-Asia arb drives upsurge in EU LNG inflows - Fresh LNG freight rate plunge, negative breakevens - EU gas storage depletion trajectory & abysmal restocking economics - Geopolitical tinderbox + flat TTF term structure = extreme volatility - A look ahead to a year of whipsawing price gyrations In keeping with my [New Year’s resolution](https://www.energyflux.news/i/154083001/my-new-years-resolution) to be more circumspect, this post concludes with some reflections on the need to reconcile quantitative logic-based analysis with qualitative factors (such as human psychology). I haven’t changed my outlook entirely, but I definitely feel a need for greater nuance and analytical latitude to accommodate the ominously wide scope of geopolitical possibilities facing us in 2025 — many of which will flow from today’s seismic US presidential inauguration. *Subscribe now for full access and support independent energy market analysis* *Article stats: 2,700 words, 12-min reading time, 14 charts & graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Gas, carbon, and the geopolitical web URL: https://www.energyflux.news/gas-carbon-and-the-geopolitical-web/ Last updated: 2025-06-17T09:44:15.000Z January got off to a cracking start with an invitation to appear on the **Carbon Trading Chronicles** podcast, hosted by the folks at Vertis Environmental Finance. The episode is now live and available on [Apple](https://podcasts.apple.com/hu/podcast/gas-carbon-and-the-geopolitical-web/id1702128147?i=1000683658289&ref=energyflux.news), [Spotify](https://open.spotify.com/episode/5jInkUn8nbK79cCQn82ytP?si=qJlCxdeQQI28NkbFnPpAdQ&ref=energyflux.news) and other platforms. We covered a lot of ground in 40 minutes: - broad trends in European natural gas markets - the fundamental vs. geopolitical panorama for gas at the start of 2025 - short- and medium-term gas & carbon price outlooks - the future of Russian gas in Europe - strategic management of EU natural gas inventories - LNG market ‘tightness’ (or lack thereof at current pricing levels) - the correlation between EU gas and carbon prices In preparation I crunched some numbers to understand what drives the EU carbon price, and ended up falling down another gas-adjacent rabbit hole. I shared some initial findings on the podcast. Since the recording I’ve had more time to refine the analysis and think through the implications. This post lays it all out. [Subscribe now](https://www.energyflux.news/subscribe) ## Gas rhymes with carbon The Emissions Trading System (ETS) is the core instrument for incentivising decarbonisation in Europe. The ETS is a cap-and-trade system, where a cap is set on the total amount of greenhouse gas emissions allowed from covered sectors. For every tonne of carbon dioxide emitted, a producer must buy an allowance (EUA). The cap is gradually reduced to achieve EU climate targets, meaning that the supply of EUAs decreases over time. A stable carbon market is vital to underpinning long payback investments in clean technologies and fuels. But it appears that **financial speculation in natural gas prices is fuelling unpredictable CO2 price movements.** I spent a lot of time last year analysing [how investment funds are bidding up gas futures on Dutch TTF](https://www.energyflux.news/p/pump-up-the-volume), the EU’s benchmark gas trading hub. It turns out, these speculative capital flows are also indirectly inflating the price of EU Emission Allowances (EUAs). When big emitters buy and sell EUAs for compliance or commercial purposes, the impact on the carbon price is surprisingly muted. By contrast, the price correlation between gas and carbon is very strong. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/c4e22517-2801-4faa-9ad7-114b41f2a3fe_4291x1965.png) The gas price is highly correlated with speculative fund positioning in Dutch TTF futures, so there is a significant link between hedge fund positions on TTF and the price of EUAs. And since hedge funds are extremely attuned to news events, the upshot is that **geopolitics** (rather than CO2 emissions) **are driving Europe’s carbon market.** ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ce67f56c-3c5b-43ce-9e84-53d6afde7087_1792x1024-jpeg.jpg) I barely scratched the surface of the gas-carbon-geopolitics nexus on the podcast. This subscriber-only post dives deep into the complexities and nuances at play, how the speculative price correlation could evolve, and the implications for Europe’s energy transition. [Subscribe now](https://www.energyflux.news/subscribe) for full access. - *ARTICLE STATS: 2,000 words, 10-min reading time, 13 charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Honest reflections on Energy Flux in 2024 URL: https://www.energyflux.news/the-good-the-bad-and-the-ugly/ Last updated: 2025-05-14T15:01:14.000Z **This time last year, I** [**relaunched** ](https://www.energyflux.news/p/redefining-energy-flux)[***Energy Flux***](https://www.energyflux.news/p/redefining-energy-flux) **with a singular mission: to analyse global natural gas markets through the lens of Europe’s net-zero journey.** Initially, I was nervous about whether the narrow editorial remit would unduly constrain the variety of stories and become repetitious. I soon discovered I was peering down a vast network of rabbit holes. Since natural gas prices impinge (directly or indirectly) on the economics of all major energy demand segments, the breadth of possible coverage is immense. The only limiting factor is my own sense of curiosity. By questioning everything and digging deep into the data for answers, *Energy Flux* has expanded in ways I would never have imagined possible had I not adopted a laser-like focus on this niche. Since the relaunch, the newsletter has published more than 50 longform articles on everything ranging from [plunging LNG freight rates](https://www.energyflux.news/p/canary-in-the-coalmine), [canal outages](https://www.energyflux.news/p/the-panama-paradox-us-lng-drought-gas-trade), [data centres](https://www.energyflux.news/p/data-centres-vs-us-lng-america-gas-power-demand) and [capture rates](https://www.energyflux.news/p/value-over-volume) to fraught energy geopolitics in[ the South Caucasus](https://www.energyflux.news/p/green-energy-corridor-azerbaijan-gas-war-peace), [Antarctica](https://www.energyflux.news/p/russia-britain-antarctic-oil-uk-war-ukraine) and [the Middle East](https://www.energyflux.news/p/lng-cost-geopolitics-red-sea-trade-gas). 🚀 The readership has grown strongly too. Total readers increased by 65% to \~6,000, with paid subscriptions quadrupling (thanks to a flurry of corporate group subscriptions). The *Energy Flux* [website](https://www.energyflux.news/) now generates \~30k page views per month. It fills me with gratitude and a sense of purpose to be reaching an audience of this size and professional calibre. However you subscribe, **thank you** for being here. [Subscribe now](https://www.energyflux.news/subscribe) Before being swept away by the inevitable market madness of 2025, I took a moment to reflect on the most-read articles of 2024\. I’ve listed the top 10 posts below in ascending order of total page views, with some honest thoughts about each (and a few *mea culpas* along the way). ### 🃏 TTF ‘wild card’ At the end, there’s a bonus section for paid subscribers discussing what I believe to be the most under-appreciated factor that could sway EU natural gas prices in 2025\. And no, the 2025 ‘wild card’ for TTF is not the weather, LNG outages or even geopolitics (although these will obviously be important too). # 10: [The storage-speculation nexus (part 1)](https://www.energyflux.news/p/the-storage-speculation-nexus) - ***5.19k views*** The first of this two-part series marked an exploratory foray into the role of storage regulations in distorting natural gas price formation. After the EU once again hit its 90% refilling target more than two months early, I was prompted by a couple of readers to ask the heretical question: is the restocking mandate actually stoking volatility? [The storage-speculation nexusThe European Union has once again achieved its gas restocking target early. At an aggregate level, EU underground gas storage facilities reached 90% full this week, more than two months ahead of the 1 November deadline.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-102.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/4d3ac179-1e08-441e-97f9-fef3ef13334a_1024x1024-jpeg-11.jpg)](https://www.energyflux.news/p/the-storage-speculation-nexus) --- # 9\. [Everything must go!](https://www.energyflux.news/p/everything-must-go) - ***5.37k views*** Rapid depletion of EU gas storage levels fuelled a strong revival in bullish price momentum in November, triggering a cacophony of alarmist commentary invoking the energy market chaos of 2022\. But a careful examination of the facts revealed a more nuanced picture than the knee-jerk hot-takes would have you believe: [Everything must go!Europe is burning through its winter gas stocks at an unnerving rate. Rapid depletion of underground storage facilities has set alarm bells ringing across EU capitals. The question on everyone’s lips: is it 2022 all over again?![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-103.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/97d86f88-9b7d-4292-9922-a6ffa3729936_1792x1024-7.webp)](https://www.energyflux.news/p/everything-must-go) --- # 8\. [Turning point?](https://www.energyflux.news/p/turning-point) - ***5.43k views*** The positioning of hedge funds on the Dutch Title Transfer Facility (TTF, the EU benchmark gas trading hub) was arguably the biggest and most under-reported EU energy story of 2024\. When funds tempered bullish bets in September, prices duly subsided — but only temporarily. The ‘turning point’ turned out to be just a blip, and my broad bearish thesis was proven wrong (premature?) throughout the first half of winter. The old adage about markets staying irrational for longer than rational actors can remain solvent bit hard in 2024: [Turning point?Depending on your perspective, the positioning of investment funds is now either the single biggest factor influencing European natural gas prices, or the best available indicator of where prices are heading.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-104.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/331cc3c9-c36c-45d0-8400-42da9823950a_1024x719-jpeg-4.jpg)](https://www.energyflux.news/p/turning-point) --- # 7\. [Renewables are crushing gas-fired power](https://www.energyflux.news/p/renewable-crushing-gas-fired-power-wind-solar-eu) - ***5.58k views*** Everyone knows that wind and solar are incrementally stealing power market share from gas, but it’s only when you quantify the trend that its pace and significance become apparent. This deep-dive analysed ENTSO-E data to gauge the depth of the gas power slump at the EU level. Most interesting for me was the degree of nuance and variability between member states: [Renewables are crushing gas-fired powerEurope’s electricity system is transitioning at breakneck speed. Renewables are displacing thermal generation so fast that gas-fired power has slumped to a two-decade low.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-105.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/9813e4bb-c702-4b2f-8743-786cad3aea61_1600x1024-jpeg-4.jpg)](https://www.energyflux.news/p/renewable-crushing-gas-fired-power-wind-solar-eu) - *The other side of the EU gas power story was rising thermal capture rates, which I covered in a* [*separate article in September*](https://www.energyflux.news/p/value-over-volume)*. I will continues tracking these RE/gas power trends in 2025.* --- # 6\. [The mask slips](https://www.energyflux.news/p/the-mask-slips) - ***5.58k views*** Sometimes it can be hard to find the right words to capture what’s going on in energy markets. But occasionally, the sheer farcicality of events ignites a spark of inspiration. This piece about the Azerbaijan fake news ‘flash crash’ on TTF in September was one of those moments; not all analysts are afforded the latitude to write an opening sentence like this one (or to use conceptual images in this way): [The mask slipsAnyone labouring under the misconception that the European gas market is a bastion of analytical sophistication, prudent risk management and tech-savvy trading nous was abruptly relieved of that burden last week.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-106.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ef28a93b-cf79-48ad-820f-3a2906dddd3c_1024x1024-jpeg-6.jpg)](https://www.energyflux.news/p/the-mask-slips) --- # 5\. [The TTF transparency gap](https://www.energyflux.news/p/ttf-transparency-gas-lng-market-energy-prices) - ***5.66k views*** When I first discovered just how much speculative capital is sloshing around the EU gas market, I was determined to gain the fullest possible understanding of fund positioning along the TTF forward curve. But I soon found that EU regulators are deliberately withholding this data in the name of commercial confidentiality. In hindsight, this essay raging against the transparency gap also revealed a few of my own knowledge gaps (which I’ve since sought to fill). [The TTF transparency gapThe niche topic of speculation in European natural gas markets is attracting media interest, triggering a debate around the influence of hedge funds on energy prices. This is to be welcomed. However, there is no way of reconciling conflicting views without more robust data and better regulation. This post sets out what we know, what we don’t, and what s
![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-107.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/6b2eec95-deae-43ef-8e4a-9340c42a5396_1500x1024-jpeg-4.jpg)](https://www.energyflux.news/p/ttf-transparency-gas-lng-market-energy-prices) - *My frustrations around TTF transparency drove me to undertake an original data research piece that proved to be the #1 most read article of 2024 — see below
* --- # 4\. [The Asian LNG glut is here](https://www.energyflux.news/p/the-asian-lng-glut-is-here-oil-gas-price-trade) - ***5.69k views*** The LNG market witnessed a steep correction in early 2024, pushing Asian spot prices below long-term oil indexed contracts. Recalling those events feels like a lifetime ago, but at that time it really did feel like the long-anticipated LNG glut was starting to manifest. This provocative headline was definitely premature, but the observation that inverted oil slope-spot differentials would prove fleeting was much closer to the mark: [The Asian LNG glut is hereThe first indications of oversupply are manifesting in the Asian market for liquefied natural gas (LNG), triggering a shift in market power from sellers to buyers.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-108.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/37ceef08-2457-444f-bcca-e14f62fc3a33_1920x1219-jpeg-8.jpg)](https://www.energyflux.news/p/the-asian-lng-glut-is-here-oil-gas-price-trade) --- # 3\. [Madness at the margins](https://www.energyflux.news/p/madness-at-the-margins) - ***6.03k views*** An intense debate erupted in the UK last year over locational pricing in the GB power market. But the rationale for linking electricity prices to the most expensive marginal generation unit went largely unscrutinised. This less-discussed aspect of power price formation matters, but nothing is being done about it. Here’s why, and what it means for the energy transition: [Madness at the marginsEven before Russia’s invasion of Ukraine, severing the link between gas and power prices was a core UK policy objective. The 2022 crisis focussed minds, but government ruled out alternatives to marginal pricing. Now, rampant speculation is injecting fresh volatility into European gas trading hubs. Is the British electricity market condemned to a future 
![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-109.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0e4b7e97-be65-453d-baa0-c7ef6cf1da30_1367x911-jpeg-1.jpg)](https://www.energyflux.news/p/madness-at-the-margins) --- # 2\. [Fever pitch](https://www.energyflux.news/p/fever-pitch) - ***6.25k views*** EU energy market volatility boiled over into fresh 2024 TTF highs in November amid intensifying uncertainty surrounding Ukraine gas transits. This post warned of a sting in the tail for investment funds positioning for a one-way bet on rising prices. Now that transit halt risk has become reality, is the fever finally about to break? [Fever pitch“Be greedy when others are fearful, and fearful when others are greedy.”![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-110.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/37fb151f-4c09-41b8-9043-7d2fe6f669fd_1024x766-jpeg-3.jpg)](https://www.energyflux.news/p/fever-pitch) --- And, drumroll please
 đŸ„đŸ„đŸ„the top-read story of 2024 was: # 1\. [The storage-speculation nexus (part 2)](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) - ***6.26k views*** The best way for this newsletter to serve its readers is by offering market-critical information that is simply unavailable elsewhere. Doing so consistently requires endless hours of hard graft and data wrangling. So it is gratifying to see that the most read article of 2024 was this investigation revealing how hedge funds are positioned along the TTF forward curve — the sort of data that regulators don’t publish in the name of commercial confidentiality. With help from a few avid readers and generous sector experts, I learned quite a lot about EU gas markets in 2024\. This piece is the high watermark of that journey of discovery so far — and it is just the start. [The storage-speculation nexus (part 2)Anyone hoping that savvy EU regulators might step in to calm jittery European energy markets was sorely disappointed last week. The European Commission, in its infinite wisdom, introduced intermediate natural gas restocking targets that added fuel to the fire of bullish bravado raging in the winter gas market.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-111.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ad25b1fd-bc0c-42bd-98d4-c17c46bac653_1792x1024-jpeg-23.jpg)](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) [Subscribe now](https://www.energyflux.news/subscribe) # My New Year’s resolution This exercise has taught me to be more circumspect in 2025\. Energy markets are incredibly fickle, and none more so than natural gas. There’s very little predictive power in dogma, and wishful thinking doesn’t change economic reality. I also need to reflect more on human psychology (markets are governed by sentiment, which is a function of subjective perception) and how this interacts with artificial intelligence and algorithmic trading in deeply liquid futures markets. If you’re also searching for clarity in this space, hit me up. It’s an incredibly complex topic, and I find chewing things over can unlock new insights. Plus, I always enjoy hearing from readers. --- # đŸ’„2025: pivotal year, or 2024 redux? At the start of every year, an endless stream of experts crops up to tell us the many reasons why the next 12 months will be a ‘pivotal year’ in energy. 2025 may or may not live up to that description; EU gas and LNG markets *might* pivot into a new pricing regime, or we could see more of the same gravity-defying volatility. Geopolitics loomed large over 2024, drawing out Europe’s post-crisis trauma. Artificially exaggerated risk perception outgunned supply-demand fundamentals throughout the second half of the year. The extent to which hedge funds intrinsically *understood* this is an open question; what is indisputable is that buying the mainstream scarcity narrative paid off, despite flying in the face of so many facts telling a different story. This mindset could well continue beyond the end of winter. There are simply too many influential voices repeating the same empty warnings for enough market participants to stop believing it overnight. With the world lurching towards a scary new phase of global conflict and insecurity, this year could follow a similar pattern. Speculative capital is still primed aggressively for the EU gas restocking season, and I fully expect the same alarmist narrative wars to define trading momentum in 2025. That said, there is one less-discussed factor that could rewrite the script for 2025 and possibly even accelerate the dawn of the ‘LNG glut’ and structurally loose market pricing conditions. This bonus section for paying subscribers discusses what could be the ‘wild card’ for gas markets in 2025 🃏 Subscribe now for full access, and get ahead of the curve before the 2025 market madness unfolds _This post is for paying subscribers only._ ### One for the road? URL: https://www.energyflux.news/one-for-the-road-ttf-natgas-russia-ukraine-gas/ Last updated: 2025-06-17T09:45:03.000Z - *As the clock ticks towards midnight, I thought I would pen a very brief update to put the geopolitical powerplay surrounding the fate of Ukrainian gas transits into perspective. I’ll be back next week with more detailed analysis of recent events for paid subscribers. Until then, wishing all readers a prosperous and energetic New Year. Thanks for reading throughout a tumultuous 2024; I suspect there will be plenty to write about in 2025\. — Seb* **The fate of Russian gas transits through Ukraine captivated bullish European gas market sentiment in 2024\. The interconnector agreement between the two warring countries expires at midnight tonight. Is the party over for EU gas bulls?** Despite intense last-minute geopolitical horse-trading, Russian gas will in all likelihood stop flowing through Ukrainian pipelines on New Year’s Day. The impending cessation will not come as a surprise, but the market is (yet again) pricing this as if it were as shocking as a Kamala Harris election victory. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/99ddf4f8-4046-4e9d-8fee-2a5649d064a3_4296x1873.png) Moreover, the transits halt will probably be only temporary. The fate of Russian gas in Europe will be a bargaining chip in peace negotiations under the Trump presidency. Quite how the new isolationist US administration intends to broker a Ukraine peace settlement is anyone’s guess. Trump has lots of LNG to sell Europeans who are eager to avert a Transatlantic trade war. He is also intent on ending the conflict, one way or the other. In the absence of clarity, speculation abounds. The imminent loss of Russian gas in Europe is fuelling a fresh bout of extreme price moves on Dutch TTF, Europe’s benchmark gas trading hub. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2a9407c6-b397-41a1-a07c-d2d711e6e855_4246x2091.png) The only ‘extreme’ thing about the EU gas market heading into 2025 is the amount of political capital being expended behind closed doors to keep Russian gas flowing through Ukraine. Slovakia’s prime minister Robert Fico made an outlandish threat to halt electricity exports to Ukraine if Kiev refuses to renew the transit agreement. He also wrote a [highly dubious letter](https://aurasabadus.substack.com/p/debunking-ficos-ukraine-transit-myths) to European Commission president Ursula von der Leyen claiming cessation would trigger economic catastrophe.[1](#footnote-1) The country at greatest risk of crisis is Moldova, which sits between Ukraine and Romania, and relies on Russian gas imported via Ukraine for heating and power generation. The ex-Soviet state is preparing to [nationalise](https://www.reuters.com/business/energy/moldova-prepares-possible-moldovagaz-nationalisation-2024-12-30/?ref=energyflux.news) gas company Moldovagaz, which is 50% owned by Gazprom, in anticipation of the cut-off on 1 January. Authorities in Moldova’s pro-Russian separatist Transdniestria region have already cut gas supplies to several state institutions. Victor Parlicov, Moldova’s ex-energy minister, [said ](https://www.reuters.com/world/europe/moldovas-separatist-region-cuts-gas-ukraine-transit-deal-runs-out-2024-12-29/?ref=energyflux.news)the Kremlin’s “real goal” is to “destabilise Moldova and plunge it into chaos” at the height of the heating season. A humanitarian crisis looms and ordinary people’s lives are on the line. Putin’s sympathisers within the EU (such as Fico) are expected to seize on the situation to lobby hard for a resumption of Russian gas flows through Ukraine to *all* eastern European countries (not just Moldova). The strategy is as cruel and cynical as it is transparent. [Subscribe now](https://www.energyflux.news/subscribe) Leaving aside the political grandstanding and reckless brinkmanship, everything else about the European gas market is surprisingly average considering the situation. Gas storage levels have reverted to seasonal norms. Rapid depletion of recent weeks is widely held aloft as proof that a crisis is looming and scarcity pricing is inevitable in Q1 2025. But as explored recently in *Energy Flux*, this is merely a function of [strategic management of storage inventory](https://www.energyflux.news/p/everything-must-go). Gas storage operators are burning expensive gas at the height of the market to make space for cheaper gas in the New Year. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ed26b199-0df9-4792-ad66-9352274e8b44_4216x2233.png) How do we know this? Because Europe’s LNG imports are at a two-year low and are showing no signs of revival. If there was even the remotest possibility of gas storage levels reaching dangerously low levels, LNG imports would begin racing north to ward off that risk. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/dff5f32e-12f9-42ec-9ab6-1494ad9a9466_4237x1917.png) Storage withdrawals are widely reported as accelerating over the last two months. Certainly, gas destocking was higher in November and December 2024 than previous years. But it was by no means unprecedented. More stored gas was withdrawn over the same two-month period in 2016 and 2017, when Russian gas flowed freely into Europe, and in 2021, when Europe was contending with Gazprom’s pre-war manipulation of the storage facilities it controlled at that time in Germany. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/9c2d0936-5267-45f9-a210-3e41145da076_6106x2578.png) Heightened withdrawals in November reflected slightly chillier conditions, but depletion eased in December with the onset of milder weather. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a85795be-84a6-4cbd-bd2d-bc3fbdfdff93_4270x1947.png) Investment funds took little notice of these facts throughout 2024, and there’s no reason why they should change course in the final days of the year. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/3979f1ce-413f-4019-a2fd-8e355045c00b_4186x1926.png) The most recent Commitment of Traders report shows a fairly hefty \~55 TWh reduction in hedge fund net length in TTF futures over the last two weeks. Prices on TTF have since soared by 15%, so I expect the next weekly CoT update will confirm that those positions were largely reversed in the trading sessions either side of Christmas. If so, this merely sets up the market for a greater correction once hedge funds wake up to the reality that Europe can cope without Russian gas, and without the need for exuberant scarcity pricing to attract the ‘marginal molecule’ of LNG. That means unwinding as much as 290 TWh of net length in Q1 2025. Bullish positioning that discounted or ignored fundamental realities proved to be an extremely profitable strategy in 2024\. The market swallowed the same ‘supply side disruption’ story over and over again, and consumers repeatedly paid the price. After months of speculation based on flimsy facts and [fake news](https://www.energyflux.news/p/the-mask-slips), that supply-side risk is about to be borne out in reality. Moldova is in a tight spot, but the looming crisis there should be isolated. Having bought the same old rumour month after month, the market will sooner or later have to sell the cold, hard news. An epic New Year hangover awaits, but the 2024 bullish party has not quite reached its climax. One for the road? **Seb Kennedy | Energy Flux | 31 December 2024** ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/086a7967-8a44-4b38-83cf-54c1f3638483_1500x1024-jpeg-1.jpg) [Leave a comment](#ghost-comments-root) --- # More from *Energy Flux*: [Seven lessons from a wild year in EU energy marketsFor Europe’s gas markets, 2024 was less about the molecules in the pipeline and more about the emotions on the trading floor — fear, greed, and a stubborn belief in worst-case scenarios.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-112.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/c57e06b5-9733-4e9c-a93e-bf783ce8dba5_1792x1024-jpeg-2.jpg)](https://www.energyflux.news/p/a-year-is-a-long-time-in-energy-markets) [Everything must go!Europe is burning through its winter gas stocks at an unnerving rate. Rapid depletion of underground storage facilities has set alarm bells ringing across EU capitals. The question on everyone’s lips: is it 2022 all over again?![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-113.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/97d86f88-9b7d-4292-9922-a6ffa3729936_1792x1024-8.webp)](https://www.energyflux.news/p/everything-must-go) [The storage-speculation nexus (part 2)Anyone hoping that savvy EU regulators might step in to calm jittery European energy markets was sorely disappointed last week. The European Commission, in its infinite wisdom, introduced intermediate natural gas restocking targets that added fuel to the fire of bullish bravado raging in the winter gas market.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-114.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ad25b1fd-bc0c-42bd-98d4-c17c46bac653_1792x1024-jpeg-24.jpg)](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) --- 1. *h/t Aura Sabadus, who has just launched her own Substack ([here](https://aurasabadus.substack.com/)), which I highly recommend you subscribe to.* [↩](#footnote-anchor-1 "Jump back to footnote 1 in the text.") ### Seven lessons from a wild year in EU energy markets URL: https://www.energyflux.news/a-year-is-a-long-time-in-energy-markets/ Last updated: 2025-05-14T15:01:21.000Z **For Europe’s gas markets, 2024 was less about the molecules in the pipeline and more about the emotions on the trading floor — fear, greed, and a stubborn belief in worst-case scenarios.** [Subscribe now](https://www.energyflux.news/subscribe) Supply and demand played second fiddle in a geopolitical thriller, where a barrage of head-spinning headlines continually rewrote the plot. An information vacuum proved fertile ground for rumour and speculation, leaving markets struggling to [price risk appropriately](https://www.energyflux.news/p/fever-pitch). European energy consumers might have hoped for calm after 2022’s crisis and 2023’s recalibration, but 2024 brought a fresh lesson: perception is reality. The energy crisis won’t end until a critical mass of hedge funds [stop believing in it](https://www.energyflux.news/p/jedi-mind-trick). That pivotal moment is approaching, but the [gravity-defying bull run of 2024](https://www.energyflux.news/p/eu-natural-gas-ttf-hedge-funds-fighting-gravity) demonstrated the perils of calling the market top prematurely. The next (final?) chapter in the ‘EU gas crisis’ story is about to be written. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/c57e06b5-9733-4e9c-a93e-bf783ce8dba5_1792x1024-jpeg-4.jpg) *Just another year in European energy markets, according to DALL-E* This special end-of-year post relays the most pertinent takeaways from a brutally unpredictable 2024, and casts a forward eye to the major factors likely to shape market events over the coming 12 months. - **Lesson #1: Vibes beat facts** - **Lesson #2: Political expediency trumps ‘red lines’** - **Lesson #3: Money moves markets** - **Lesson #4: Correction is the path back to ‘normality’** - **Lesson #5: Seasonality is dead, long live ‘false seasonality’** - **Lesson #6: Europe’s LNG dependence is politically unsustainable** - **Lesson #7: The global gas story can turn on a dime** - **Bonus lesson: ? 😉** I have learned a huge amount this year about how markets work, and how to articulate sophisticated insights in a pithy, accessible way. It’s been a joy to share that journey of discovery in *Energy Flux*, and subscriber response has been overwhelmingly positive throughout 2024. This article epitomises the sort of high-impact data-rich analysis I intend to develop further in 2025 and beyond. Subscribe now for full access and support independent, unbiased Europe-focussed market analysis at a critical moment in energy history. [Subscribe now](https://www.energyflux.news/subscribe) *Article stats: 2,400 words, 11-min reading time, 13 charts and graphs* _This post is for paying subscribers only._ ### Everything must go! URL: https://www.energyflux.news/everything-must-go/ Last updated: 2025-06-17T09:45:52.000Z **Europe is burning through its winter gas stocks at an unnerving rate. Rapid depletion of underground storage facilities has set alarm bells ringing across EU capitals. The question on everyone’s lips: is it 2022 all over again?** [Subscribe now](https://www.energyflux.news/subscribe) In a word: no. Only a deep and prolonged ‘Beast from the East’ winter blast could change that assessment. Here’s why. Europe witnessed a notable uptick in gas demand across all economic segments in November. For the first time this year, gas consumption rose in the residential, power generation and industrial sectors simultaneously. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/67f45c22-5c47-4310-abb4-f9e103e5050a_1141x749-jpeg.jpg) Chart: [Greg Molnar via LinkedIn](https://www.linkedin.com/posts/greg-moln%C3%A1r-38601171%5Fgas-lng-ttf-activity-7269257893181378560-ETT%5F?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop) Low wind and a cold snap triggered a surprisingly large storage drawdown to replace subdued renewable power generation and to keep homes and offices warm. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/e00aa799-977f-460b-9b1d-5c704834981b_4158x2043.png) Net withdrawals in November amounted to 112 TWh (roughly 6 Bcm), the highest drawdown for that month since 2018, and 66 TWh greater than 2023. Coincidentally, 6 Bcm closely matches the increase in gas demand over the same period. In other words, the entirety of November’s demand uptick was met by pulling gas from storage. At the same time, European imports of liquefied natural gas (LNG) fell to a two-year low. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/3df89baa-e271-4f95-86bb-a658bde85a8c_4125x2080.png) Europe’s LNG imports were 1.86 million tonnes lower in November 2024 than the previous year. That’s equivalent to roughly 28 TWh (\~2.5 Bcm) of ‘missing’ natural gas. The net effect was plummeting storage levels and a torrent of fear-mongering in the mainstream press about a return to [the dark days of 2022](https://www.energyflux.news/p/fear-grips-eu-gas-trade) when the post-invasion risk premium sent prices parabolic. Few paused to ask the obvious question: Why, in the midst of a supposedly ‘tight’ gas market and early winter cold snap, would Europe not be outbidding Asia to lure in every spare LNG cargo from the spot market? Current gas market dynamics are routinely ascribed to ‘market tightness’. But the ‘scarcity narrative’ does not adequately explain what’s going on. For a deeper analysis, you need to consider the hedging strategy of ‘Commercial Undertakings’ — physical players such as gas producers and suppliers. This **Deep Dive** uses original data analysis of Commercial Undertakings’ holdings on the Dutch Title Transfer Facility (TTF). The findings shed new light on why Europe’s gas storage levels are being allowed to deplete so quickly. These data-rich insights are not available anywhere else. This is market-critical information at a critical moment in energy markets. Subscribe now for full access. *ARTICLE STATS: 2,000 words, 10-min reading time, 12 charts and graphs, 1 data animation* [Subscribe now](https://www.energyflux.news/subscribe) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### The storage-speculation nexus (part 2) URL: https://www.energyflux.news/storage-speculation-nexus-part-2-natural-gas-ttf-eu/ Last updated: 2025-11-30T06:03:39.000Z **Anyone hoping that savvy EU regulators might step in to calm jittery European energy markets was sorely disappointed last week. The European Commission, in its infinite wisdom, introduced intermediate natural gas restocking targets that added fuel to the fire of bullish bravado raging in the winter gas market.** [Subscribe now](https://www.energyflux.news/subscribe) The new refilling [targets](https://energy.ec.europa.eu/publications/implementing-regulation-setting-filling-trajectory-intermediary-targets-2025-member-states%5Fen?ref=energyflux.news) for 1 February, 1 May, 1 July and 1 September 2025 are significantly higher for a select few countries compared to previous targets for the same dates in 2024. Depending on how winter plays out, this could place additional burden on storage operators to procure more gas during the coldest months of the year — and potentially without any contribution from Russian pipeline transits via Ukraine. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0488f9e3-c471-4127-9760-0beb31c88f92_4000x941.png) [**Click to enlarge*](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0488f9e3-c471-4127-9760-0beb31c88f92%5F4000x941-1.png?ref=energyflux.news) Market reaction was instantaneous: prices on Dutch TTF, the EU gas benchmark, leapt by as much as €1.4/MWh (+3%) when the announcement dropped around midday on Friday. The prompt contract (Jan-25) has retained those gains so far this week. Traders evidently spy an opportunity to corner captive buyers. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/8875319b-23d9-4069-a8dc-daa24c5b92d1_1669x702.png) The implementing regulation states, without irony, that these targets are designed to avoid any “distortive impact on the proper functioning of the internal market in gas, including in gas derivatives markets”. ## Speculator’s charter The impact of the EU’s rigid gas storage mandates is twofold. **One is the message it sends.** The supply-demand balance is deemed to be tightening, adding credence to the bullish narrative that’s captivated market sentiment for most of 2024\. Market reaction on Friday attests to that. **The other is the market power it bestows upon speculators.** An obligation to hit an arbitrary fill level turns strategic storage operators (SSOs) into easy targets for investment funds, as explored by *Energy Flux* in August (see [*The Storage-Speculation Nexus, Part 1*](https://www.energyflux.news/p/the-storage-speculation-nexus)). However, the available data is inadequate to substantiate that assertion. The Commitment of Traders report for ICE Endex TTF shows only the aggregate number of long and short positions held by investment funds in all TTF futures; it does not reveal how these positions are distributed among the various calendar month/season futures with differing maturities. [Subscribe now](https://www.energyflux.news/subscribe) ## Fund positions revealed Today, that changes. New data analysis by *Energy Flux* provides original insight into where investment funds are most likely focussing their bullish bets. Using regression analysis, it is also possible to observe how this has evolved over the last two years. This **Deep Dive** explains the data analysis methodology and its findings in full. The main takeaway is that hedge funds are clearly seizing the opportunity presented by the gas storage mandate. If you trade TTF futures, manage EU gas-related risks or have any exposure to TTF price movements, then **you need to understand how hedge funds are positioned for the months ahead**. The European Securities and Markets Authority (ESMA) holds data on precisely how funds are positioned, and the trading strategies they employ. In the name of commercial confidentiality, it does not publish this data. This post – the second in a three-part series – lifts the corner of that veil: 1. [**Part one**](https://www.energyflux.news/p/the-storage-speculation-nexus) identified the possible link between storage targets and speculation (August 2024) 2. [**Part two**](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) (this post) uses regression analysis to prove the storage-speculation hypothesis (December 2024) 3. [**Part three**](https://www.energyflux.news/the-storage-speculation-nexus-part/) uses the same technique to dissect the Q1 TTF selloff and assess seasonal price risk for 2025-26 Subscribe now for full access. [Subscribe now](https://www.energyflux.news/subscribe) *ARTICLE STATS: 2,300 words, 11-min reading time, 7 charts & graphs, 1 data animation* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Fever pitch URL: https://www.energyflux.news/fever-pitch/ Last updated: 2025-06-17T09:47:34.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/e070375a-da21-43f3-90b8-cbfc56e312a2_1349x445.png) [Subscribe now](https://www.energyflux.news/subscribe) > *“Be greedy when others are fearful, and fearful when others are greedy.”* **Warren Buffet’s old investment maxim is struggling for relevance in Europe’s frayed gas market. Greed and fear are becoming indistinguishable amid an accelerating geopolitical news cycle that is heaping fresh uncertainty onto an already delicate winter outlook. Investment funds see mostly upside risk from the increasingly volatile situation in Ukraine, and are positioning accordingly. But there could be a sting in the tail.** ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d4a45630-5b0b-46b9-bdfe-ce0c7c40bd8c_1024x766-jpeg.jpg) - *ARTICLE STATS: 1,800 words, 8-min reading time, 13 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### On the Air URL: https://www.energyflux.news/on-the-air/ Last updated: 2025-05-14T15:01:33.000Z **I love talking energy.** Here’s an evergreen list of recent podcast and media appearances. [Subscribe now](https://www.energyflux.news/subscribe) # Redefining Energy - **The Future Growth of LNG**, with Laurent Segalen and Gerard Reid (27 January 2025): --- # Carbon Trading Chronicles - **Gas, Carbon, and the Geopolitical Web**, by Vertis (12 January 2024): --- # The Commodity Playbook - **Gas Market Shake-up**, with EklipX Research (12 November 2024): --- # Energi Talks - **The Role of Gas in a Renewables-Heavy Power Grid**, with Markham Hislop (9 November 2024): --- # Transmission - **Natural gas and power prices,** by Modo Energy (12 September 2024): --- # GB News - **Russia’s Antarctic oil ‘discovery’,** with Jacob Rees-Mogg (12 May 2024): - **The future of North Sea energy,** with Jacob Rees-Mogg (8 November 2023): ### Jedi mind trick URL: https://www.energyflux.news/jedi-mind-trick/ Last updated: 2025-06-17T09:48:32.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2289f4ea-39ce-4eaa-966c-d95b1093ee17_1349x445.png) [Subscribe now](https://www.energyflux.news/subscribe) > *“You weak-minded fool!” — Jabba the Hutt, Return of the Jedi* **In a galaxy far, far away (also known as Europe’s gas market) there is no such thing as objective reality. Like a Jedi mind trick, intangible ‘scarcity’ has captivated trading sentiment. As ever, risk perception trumps physical realities when it comes to gas price formation.** ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/5482a07e-6a4a-4bd5-8bdc-90618ed5b513_1792x1024-jpeg-1.jpg) **“This is not the bearish gas market you are looking for”* The recent shenanigans around Russian gas supplies into Austria provide further proof, as if any where needed, of the unwavering supremacy of perception in the hierarchy of influence. Late last week, Gazprom stopped supplying gas directly to OMV. This is because OMV stopped paying Gazprom under its long-term contract in an attempt to recover a €230 million arbitration award. OMV said Gazprom would halt gas supplies on Saturday. But data from the ENTSOG Transparency Platform show Russian gas kept flowing into Austria via Ukraine and Slovakia. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ad3a2dc0-5c4e-4043-8deb-239d905dd619_2422x886.png) **Ukraine-Slovakia physical flows* ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/7ae42955-8e82-45cd-9eba-d9719557dc5b_2422x886.png) **Slovakia-Austria physical flows* All that changed was the buyer of the molecules. Gazprom is believed to be selling gas originally intended for OMV to traders and other secondary buyers in Austria and Slovakia. ## Buy the risk
 Traders were quick to price in the anticipated disruption to Russian gas inflows before they materialised. Prices on Dutch TTF, the European benchmark, spiked above €47/MWh to a year-to-date high during intra-day trading last Friday, when OMV’s announcement hit the newswires. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d007f818-b89f-475f-85db-aac5e206171c_1716x581.png) ## 
sell the reality Those gains were gradually pared back in subsequent trading sessions as the reality dawned that no disruption was forthcoming. The TTF front month contract (Dec-24) closed Tuesday’s session at €46/MWh — pretty much where it was prior to OMV’s news. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2cc21374-c602-4337-bc92-50686fd189ba_1707x571.png) These theatrics are a taster of what’s to come. After months of (figurative and literal) speculation, the moment of truth around Russian gas transits is fast approaching. Does Europe even need this gas? Will the bullish spell wear off before the market finds out? [Subscribe now](https://www.energyflux.news/subscribe) *đŸ’„ Article stats: 1,550 words* // *8-min reading time* // *14 charts, graphs & maps* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### US LNG vs ‘America first’ URL: https://www.energyflux.news/us-lng-vs-america-first/ Last updated: 2025-06-17T09:49:14.000Z DEEP DIVE: Can Trump maximise American gas exports without infuriating the MAGA crowd? _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Canary in the coalmine URL: https://www.energyflux.news/canary-in-the-coalmine/ Last updated: 2025-06-17T09:50:40.000Z **Liquefied natural gas saved Europe in 2022\. Now, the LNG industry needs to save itself.** [Subscribe now](https://www.energyflux.news/subscribe) LNG helped to bridge the yawning supply shortfall when Russia slashed pipeline exports before and after its land invasion of Ukraine. European LNG buyers hoovered up every spare cargo by bidding up prices and, in the process, gouging consumers. The demand destruction that ensued is now manifest in several crucial indicators of industry health. One of these is the **cost of chartering LNG ships**. For those not following this space closely, freight rates for cryogenic LNG vessels collapsed this year. The spectacular implosion went largely unreported outside of niche trade circles, and was generally dismissed as a rational market response to a wave of newbuild vessels entering service. But there’s more to it than that. Much more — and it speaks volumes about the state of an industry that’s supposed to be on the cusp of unprecedented demand growth. The cost of shipping is the ‘canary in the coalmine’ for the LNG industry. Plummeting rates signal softening demand, oversupply, and broader structural challenges facing the LNG sector as it struggles to maintain its position in the global energy mix. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/34be3137-39e6-44ce-9637-294ac71feb0e_1537x1024-jpeg-4.jpg) **The canary stopped singing in 2024 (image by Bing Creator)* This [**Deep Dive**](https://www.energyflux.news/t/deep-dive) is an autopsy of LNG shipping in 2024. It draws on a plethora of cargo, freight and LNG trade data from leading providers to break down the many factors crushing rates, what’s keeping them low, and what this tells us about the prospects for LNG in powering global economic growth. Spoiler alert: it’s pretty ugly, and the data don’t lie. [Subscribe now](https://www.energyflux.news/subscribe) *ARTICLE STATS: 2,700 words, 12-min reading time, 13 original charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Who let the bulls out? URL: https://www.energyflux.news/who-let-the-bulls-out/ Last updated: 2025-06-17T09:51:20.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/1c44dd65-f204-4af7-b06c-7268bbec6138_1349x445.png) [Subscribe now](https://www.energyflux.news/subscribe) **European natural gas prices are breaking out in another bout of bullish fervour, and everyone wants to know why. The fact that nobody does should tell you everything you need to know about this market: it is irrational.** ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d9ee8898-6cb0-4f1b-b8e1-81dc7e049e94_1792x1024-jpeg-3.jpg) **“Now they’re out, how do we get them back in?”* Front-month TTF, the EU gas benchmark contract, surged above the €43 per MWh threshold during intraday trading on Friday, before closing the session at €43.50/MWh: up 11% week-on-week, and a year-to-date high. The excursion left everyone scratching their heads. An exotic menagerie of ‘reasons’ was promptly trotted out to rationalise this latest episode of capricious price inflation. This [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) dismantles a few pertinent theories about why European gas prices are rallying into what is — still — a fundamentally bearish market. It then takes stock of how the latest price action alters the winter outlook. - I’m delighted to be partnering with two **major LNG trade, freight and cargo data providers** to enrich my coverage of EU gas markets. Spot the big names in the datavis credits below 🧐 *ARTICLE STATS: 2,300 words, 11-min reading time, 14 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Asia’s LNG bottleneck (part 2) URL: https://www.energyflux.news/asias-lng-bottleneck-part-2/ Last updated: 2025-06-17T09:52:01.000Z **South-east Asia is enjoying a moment in the global energy spotlight.** With the Singapore International Energy Week (SIEW) in full swing, the International Energy Agency cut the ribbon on its first regional office in the city-state. The Paris-based agency also released its annual [South-east Asia Regional Energy Outlook](https://www.iea.org/reports/southeast-asia-energy-outlook-2024?ref=energyflux.news) detailing the “dynamism” of the region and its growing influence over global markets. Joseph McMonigle, secretary general of the Riyadh-based International Energy Forum (IEF), [talked up](https://www.ief.org/news/ief-sg-highlights-central-role-of-natural-gas-in-evolving-energy-transition?ref=energyflux.news) “the necessity of integrating natural gas into future energy strategies” in a keynote address. McMonigle was one of the many “gas cheerleaders”, as Bloomberg’s Sing Yee Ong [put it](https://www.bloomberg.com/news/newsletters/2024-10-23/asia-s-gas-cheerleaders-show-no-signs-of-curbing-their-enthusiasm?cmpid=BBBXT102324%5FENERGY&ref=energyflux.news), assembled at SIEW. Everybody in the industry is popping champagne corks in anticipation of booming demand for liquefied natural gas (LNG). But nobody, it seems, is talking about the risk of infrastructure capacity constraining demand growth in parts of emerging Asia this decade. This post is the second instalment of a **two-part Deep-Dive** examining the very high failure rate of LNG terminal projects in South and South-east Asia, in the context of the LNG industry’s growth ambitions. - **Part one** of this mini-series, which sets the scene and explains the methodology for analysing terminal project attrition rates, is available [here](https://www.energyflux.news/p/asias-lng-bottleneck-part-1). - **Part two** (this post) identifies four key countries where bottlenecks are most likely to emerge, the factors driving cancellations, and the scope for addressing them before the global LNG market tips into structural oversupply. This second instalment is even longer than the first, and is packed with fresh datavis. Best viewed on the *Energy Flux* website — [click here](https://www.energyflux.news/p/asias-lng-bottleneck-part-2) to open in your browser. *ARTICLE STATS: 4,000 words, 18-min reading time, 12 original charts and graphs* [Subscribe now](https://www.energyflux.news/subscribe) ## LNG’s tarnished reputation If I had to summarise in one sentence why LNG infrastructure is hard to build in emerging Asia, it would be this: _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Asia’s LNG bottleneck (part 1) URL: https://www.energyflux.news/asias-lng-bottleneck-part-1/ Last updated: 2025-06-17T09:52:35.000Z **Asia could be facing a liquefied natural gas bottleneck. A projected surge in demand for the fuel threatens to overwhelm import capacity in some emerging markets before 2030\. Localised pinch-points would limit the region’s ability to absorb the imminent wave of new global LNG supply — with implications for the global gas balance in the second half of the decade.** [Subscribe now](https://www.energyflux.news/subscribe) South and South-east Asia are expected to account for almost half of global LNG demand growth, according to *Energy Flux* estimates. Current regasification capacity can’t accommodate all of the projected increase. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/eed82226-0307-4ebf-8cbc-39d801b7dfa3_6116x2652.png) A drive to expand import capacity is underway in India, Pakistan, Bangladesh, Thailand, Vietnam, and the Philippines. But a shortfall is likely in some key growth markets due to **the very high failure rate of LNG regasification infrastructure projects** across the region. Regasification, for the uninitiated, is the process whereby super-chilled liquefied gas is warmed back into a gaseous form, for distribution to end consumers or for combustion in a gas-fired power plant. If a country’s demand for LNG exceeds the available ‘regas’ capacity at import terminals, then growth will stall. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2f86065f-5a2b-4a5e-b8ab-936cb12b0dae_690x461-jpeg.jpg) **The Zeebrugge LNG terminal in Belgium. Photo:* [**Fluxys*](https://www.fluxys.com/en/news/fluxys-lng/2024/241014%5F3%5Fsabrs%5Fon%5Fsale%5Fnovember%5F2024?ref=energyflux.news) There is a distinct possibility that some fast-growing emerging Asian economies could find themselves in this situation before 2030\. Analysis by *Energy Flux,* with assistance from [Global Energy Monitor](https://globalenergymonitor.org/?ref=energyflux.news), reveals the extent of the problem (special thanks to Rob Rozansky of GEM for help with data mining). Over the last ten years, **65%** of proposed new LNG import terminal capacity in South Asia has been shelved or cancelled. Over the last five years, that figure rises to **68%**. In South-east Asia, the failure rate is **59%** over ten years, and **67%** over the last five years, according to GEM’s open access [Global Gas Infrastructure Tracker](https://globalenergymonitor.org/projects/global-gas-infrastructure-tracker/?ref=energyflux.news). Asian LNG terminal failure rates compare very poorly with Europe. The old continent’s attrition rate has fallen from **46%** over the last decade to just **28%** over five years, a result of the EU’s concerted dash to build new facilities when Russia slashed pipeline gas exports in 2021-22. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/96207189-26de-4d6e-81f6-5646f306eb38_4264x1713.png) The failure rate of Asian LNG terminal projects is increasing, while Europe’s is falling — precisely the opposite of what ought to happen. After going on a terminal-building spree, Europe doesn’t need more capacity. But emerging Asia *does* if it is to become the much-hyped growth engine of global LNG demand. Oil majors such as Shell and TotalEnergies are banking on these economies hoovering up all the extra cargoes that are going to hit the market in the coming years (and thereby prevent a big LNG glut in 2027-28). [Subscribe now](https://www.energyflux.news/subscribe) This raises the question: how much new LNG regasification capacity is likely to be built across emerging Asia this decade? And how does this ramp-up compare with forecasts for surging LNG demand in the world’s fastest-growing economies? The short answer is that **infrastructure is likely to be a limiting factor on Asia’s LNG demand growth story** in a handful of key markets. A more nuanced answer is that the severity of the bottleneck in each market depends entirely on several overlapping factors. Only if demand falls well short of expectations *across the region* will one be averted entirely. This special **two-part** [**Deep-Dive**](https://www.energyflux.news/t/deep-dive) — which has been months in the making — takes a look at the data to flesh out those nuances. It reveals where the infrastructure bottlenecks are most likely to emerge, and how acute they could be under various demand and infrastructure buildout scenarios. **Part one** (this post) examines: - The attrition rate of LNG import projects on a regional and country-level basis across South and South-east Asia - The likely 2030 buildout of LNG import capacity in each country, and how this compares to the LNG demand outlook - The likely surplus/excess of regasification capacity in each country by 2030, and implied infrastructure utilisation, according to differing LNG demand scenarios **Part two**, available [here](https://www.energyflux.news/p/asias-lng-bottleneck-part-2), delves deeper to explore: - The likelihood of LNG bottlenecks emerging across a matrix of attrition rate and LNG demand scenarios - The average time to deliver different types of new LNG import capacity in the region, and factors impeding delivery in each country - The implications of import capacity constraints on the global gas balance in the latter half of this decade - What all this this means for European gas buyers and consumers, and the role of gas in Europe’s energy transition This first instalment is quite long and looks much better on the website. Be sure to open the [web version](https://www.energyflux.news/p/asias-lng-bottleneck-part-1) in a browser for an optimal reading experience. [Subscribe now](https://www.energyflux.news/subscribe) for full access, and to ensure you don’t miss part two when it drops. *ARTICLE STATS: 2,300 words, 11-min reading time, 6 original charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Madness at the margins URL: https://www.energyflux.news/madness-at-the-margins/ Last updated: 2025-05-14T15:01:59.000Z **Even before Russia’s invasion of Ukraine, severing the link between gas and power prices was a core UK policy objective. The 2022 crisis focussed minds, but government ruled out alternatives to marginal pricing. Now, rampant speculation is injecting fresh volatility into European gas trading hubs. Is the British electricity market condemned to a future of endless gas-induced price spikes?** [Subscribe now](https://www.energyflux.news/subscribe) ## Overview: - *Amid intense debate over locational power pricing in the GB market, the rationale for linking electricity prices to the most expensive marginal generation unit has gone largely unscrutinised* - *Marginal pricing is becoming problematic with the rise of renewables, as the opex-based pricing regime fails to remunerate for wind and solar power capex without marginal gas generation* - *Hedge funds speculation is driving volatility in European gas markets, which is being passed through to power prices via marginal pricing* - *A lack of credible alternatives to marginal pricing points to an increasingly volatile transition towards full grid decarbonisation* *Article stats: 2,800 words, 13-min reading time, 6 charts and graphs* ## Marginalised in the debate The UK government’s ongoing Review of Electricity Market Arrangements (REMA) threw the doors open to [locational marginal pricing](https://efwd.energyvoice.com/insights/policy/locational-pricing-and-the-revenge-of-geography?ref=energyflux.news) (LMP). This is a potential move away from ‘nationwide’ power pricing, and towards a mosaic of prices for each geographically determined ‘zone’ in the GB market. The lively debate around LMP focused on the ‘locational’ aspect. A decision on whether to proceed with zonal LMP is hotly anticipated by all stakeholders. The Department for Energy Security and Net Zero (DESNZ) is still entertaining the idea. The ‘marginal’ aspect of LMP received much less scrutiny. DESNZ considered alternatives but threw them out in the second phase of REMA, in May 2024\. Marginal pricing was, well, marginalised in the REMA debate. With all the angst and vested interests lobbying hard both for and against locational pricing (and other aspects of REMA), the incoming Labour government inherited a bulging to-do list from officials at DESNZ. Revisiting marginal pricing is definitely not on the agenda. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/343bf7c4-8b2d-4330-9d12-56566c7d9be3_850x478.png) *Unabated gas is being pushed out of the merit order, but this does not mean an end to marginal pricing. Chart: DESNZ* ## Power pricing orthodoxy The reliance on the ‘marginal’ generator to set prices for all power producers is a central tenet of wholesale power price formation the world over. But it is, arguably, the root problem. Many of the complex sticking-plaster policy interventions in power markets are actually trying to solve for this. In a marginal pricing system, the most expensive plant, which is required to meet the last unmet unit of demand at the margin, sets the price for the rest of the market. In electricity, that’s usually thermal generators with fuel costs. Traditionally this was coal, but latterly gas-fired power has taken the mantle of price-setter. All generators with costs below gas – e.g. wind, solar, hydro and nuclear – therefore receive ‘infra-marginal rent’: the difference between their short-run marginal cost (SRMC) and the cost of gas-fired generation. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/249448c5-084e-4c80-a696-ce4c5cd93dd5_727x381.png) *Marginal pricing and infra-marginal rent. Chart: DESNZ* Marginal pricing is widely used in commodity markets, including liberalised electricity markets. It works well when producers have similar operational performance profiles and technical product characteristics. The lowest cost assets/producers are rewarded the most, encouraging greater efficiency. [Subscribe now](https://www.energyflux.news/subscribe) ## Irreconcilable differences Integrating wind and solar into the generation stack was always going to run into a structural problem: these sources have very different properties to incumbent sources. Chiefly, renewables have large up-front capital costs (capex), no fuel costs and very low operating costs (opex). In a hypothetical sense, and in the absence of subsidies, renewables need gas. Infra-marginal rents (generated by price-setting gas) cover the long-run capex costs of renewables. If the marginal generator had very low opex (e.g. nuclear) then wholesale prices would be too low to remunerate renewables adequately. Therefore, to keep renewables investors whole, prices would have to clear up to a level that reflects the long-run cost of capital. In reality that does not happen, which is why European power markets are witnessing more frequent and prolonged periods of low/negative pricing, as has documented over at ([link](https://gemenergyanalytics.substack.com/p/the-reasons-for-negative-prices)). Renewables and gas differ in other key ways. Renewables output varies depending on weather and location, while gas is dispatchable, flexible and location-agnostic. In a pricing regime based on the marginal producer, these fundamental differences cannot be reconciled in an economically logical way. ## The tide is going out Full decarbonisation of electricity implies transitioning from an opex-based pricing regime to a capex-based one. The end destination might be a glorious utopia of clean, cheap, stable power supplies, but the journey will be tortuous. Friction is unavoidable, but so far it has been manageable. Prior to 2021, the reliance on marginal power pricing was not overly problematic. This was thanks to the combination of relatively benign gas market conditions and the low penetration of zero marginal cost power sources. Gas was cheap and renewables were only a small disruptive force. Today’s post-Covid, post-Ukraine world is quite different. Rampant [speculation is fuelling](https://www.energyflux.news/p/ttf-transparency-gas-lng-market-energy-prices) gas price volatility. An onslaught of cheap solar is flooding grids for hours on end before abruptly tailing off. In this world, pricing electricity off the marginal electron loses any sense it might once have had. ## Excess speculation Marginal pricing might not be getting the scrutiny it deserves in the UK. But there is a growing awareness in Europe that excessive speculation by financial traders is fuelling gas price volatility – and that, thanks to marginal pricing, this volatility is being passed through directly to power markets. The European Commission recently published a landmark [report](https://commission.europa.eu/topics/strengthening-european-competitiveness/eu-competitiveness-looking-ahead%5Fen?ref=energyflux.news) by Mario Draghi on the future of European competitiveness. The former European Central Bank (ECB) president called for better regulation to “limit the possibility of speculative behaviour” in EU gas markets. These drive prices both in EU-adjacent markets such as the UK and in gas-importing regions around the world. Draghi’s intervention is timely. Hedge funds and other financial investors are taking increasingly wayward bets on the future direction of prices on Europe’s benchmark gas trading hub, the Dutch Title Transfer Facility (TTF). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a59bd0c7-136f-4a70-a612-c438fcf1405c_1000x667-jpeg.jpg) *Mario Draghi. Source: Shutterstock* ## Speculation feeds volatility Investment funds have rapidly increased their exposure to EU gas prices since late 2021\. At this point, the market tightened suddenly amid Russia’s deliberate disruption to pipeline gas flows ahead of its land invasion of Ukraine. War and extreme scarcity pricing in 2022 gouged consumers and offered an extraordinary money-making opportunity for ‘non-physical’ traders in European gas futures. Those are financial players who deal exclusively in derivatives and do not handle the underlying commodity. The Dutch TTF trading hub fosters speculative trading by allowing non-physical funds to build very large long (or short) positions and ‘roll over’ their exposure from one month to the next. This means they never have to take physical delivery of the underlying commodity. Speculative capital has poured into bullish bets on TTF, amassing net long positions worth an estimated €8-9 billion (ÂŁ6.7-7.6bn) in aggregate. US and Asian hedge funds are believed to be major holders of speculative positions, which flipped extremely bullish in recent months. The movement of funds is exerting ever-greater influence over price formation on TTF, Europe’s most liquid gas trading hub. The liquidation of short positions, combined with the opening of new long positions, fuelled a [bull run in gas prices over the summer](https://www.energyflux.news/p/pump-up-the-volume). The front-month contract on TTF soared 75% between February and August, from lows of \~€23 (ÂŁ19) per megawatt-hour (MWh) to peak at €40 (ÂŁ33.7) per MWh at the end of the summer. The price surge correlated with investment funds shifting from a net short TTF position of -22.5 TWh in February to a net long position of 268 TWh in August, according to data from the European Securities and Markets Authority. [Subscribe now](https://www.energyflux.news/subscribe) ## No obvious solution In his report, Draghi suggested the EU should introduce more stringent financial position limits and dynamic caps. He also said there should be an “obligation to trade in the EU” to counteract these types of speculative excesses. He called for better regulatory oversight of energy and energy derivatives markets to “anticipate unusual trading patterns and allow for quicker and more efficient remedial action”. Draghi also addressed the question of marginal pricing, although he stopped short of calling for an alternative price-setting arrangement. “In 2022 at the peak of the energy crisis, natural gas was the price setter 63% of the time, despite making up only 20% share of the EU’s electricity mix,” he wrote, adding: > *“In the absence of action, this decoupling problem will remain acute at least for the remainder of this decade. Even if renewable installation targets are met, it is not forecast to significantly reduce the share of hours during which fossil fuels set energy prices by 2030.”* ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/32f5e3b1-1fc0-4897-89a2-0754240ea6e1_1024x581.png) *Chart: The future of European competitiveness report by Mario Draghi ([source](https://commission.europa.eu/topics/strengthening-european-competitiveness/eu-competitiveness-looking-ahead%5Fen?ref=energyflux.news))* Rather than exploring alternative methods of price-setting, Draghi suggested the use of long-term contract solutions such as Power Purchase Agreements (PPAs) or Contracts for Difference (CfDs). These, he said, would “help attenuate the link between the marginal price setter and the cost of energy for end users”. These are exactly the sticking-plaster solutions that the UK has also opted to advance, while persisting with marginal pricing at the core of the GB electricity system. [Get 10% off a group subscription](https://www.energyflux.news/subscribe) ## Missed opportunity REMA is the biggest upheaval of the GB power market since the start of liberalisation and privatisation in the 1980s. One might have thought this would present an opportunity to grapple seriously with the fundamental question of whether marginal pricing is an appropriate basis for a capex-based generation stack. Instead, the chosen policy response is to add more sticking plasters. Do not be mistaken: PPAs and CfDs are highly effective instruments that can and will continue to underpin phenomenal amounts of investment in critical energy transition infrastructure. The CfD, in particular, mitigated the worst extremes of the 2022 energy crisis. It forced generators to [pay back excess remuneration](https://www.energyflux.news/p/negative-wind-subsidies-help-cash) when wholesale prices (set by gas) soared far above their agreed strike prices. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a98cd2f3-4d44-48e9-bd8f-d4254a82c5f2_1024x484-jpeg.jpg) *How the CfD for renewable generators works ([source](http://www.jethrobrowell.com/blog/contracts-for-difference-round-1-allocation?ref=energyflux.news))* But at the other end of the spectrum, the combination of marginal pricing and CfDs has precipitated a knotty problem of increasingly frequent zero or negative pricing periods, price cannibalisation and escalating subsidy support costs for top-up payments. ## Negative energy If the GB market persists with marginal pricing, as is the plan, then the only way to avoid passing gas price volatility through to power consumers is to push gas off the system. It can only achieve this by rapidly accelerating deployment of wind, solar, nuclear, energy storage. More progress is also needed in demand response technologies to render gas entirely unnecessary, save for a few crucial hours per year. But installation rates of wind and particularly solar might hit the skids without swift regulatory intervention. Solar generation is highly correlated, with midday peak generation and nothing at night. As such, it is plunging wholesale prices into zero or negative territory with alarming frequency. “Regulators, rightly, will not want to encourage more solar production at times when production is already plentiful (and now even excessive, at times),” [says JĂ©rĂŽme Guillet](https://jeromeaparis.substack.com/p/renewables-developers-and-the-public), managing director of energy transition finance company SNOW. This means new solar producers must no longer receive a positive price for their electricity when there is already too much of it. This is precisely when they will all be producing. “The scale of the problem may even require action against existing producers, which is much more problematic as they based their investment decisions (and continuing financial obligations) on the past revenue regime,” Guillet wrote in his Substack, . ## Competing objectives One potential solution is to switch to an entirely new renewables subsidy regime based on capacity rather than generation. Under the CfD, the generator sells their power in the wholesale market. The CfD pays generators the difference between the wholesale power price and an agreed strike price, beyond which they must pay back the difference. DESNZ is consulting on the ‘deemed’ CfD as part of the second phase of REMA. Under this mechanism, renewables generators would be remunerated based on their *deemed* output – not their *actual* production. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/337b6ab2-6845-4b7f-98c6-af0cb69fba34_535x283.png) *Illustration of a profile-based (deemed generation) CfD. Source: [Eurelectric](https://www.eurelectric.org/wp-content/uploads/2024/06/eurelectric-cl-unlocking-the-power-of-cfds%5Fes.pdf?ref=energyflux.news)* The process of ‘deeming’ output means estimating production 24/7 and paying subsidies out as if the asset had been generating. This protects the wind or solar investor from negative pricing periods. It allows the asset to be curtailed without having to pay it to shut down. Ostensibly this is solving for [grid congestion-related curtailment](https://efwd.energyvoice.com/insights/wind/how-to-make-best-use-of-scotlands-squandered-wind-electrons?ref=energyflux.news), which is another ballooning problem of grid decarbonisation. But, as a capacity-based payment approach, it represents a shift from an opex to capex-based pricing regime. As such, it is very much compatible with the needs of financiers. Sadly, protecting the asset from price signals introduces operational challenges related to efficiency of plant design and dispatch. Capacity-based CfDs “would definitely make projects financeable, and would help grids manage the occasional surpluses from solar,” Guillet wrote, adding: > *“But it would certainly not incentivize developers to optimise either the location or the performance of their projects, and it would not help the development of batteries and other demand-management initiative to the same extent that current price swings will.”* ## Better the devil you know There is no easy or quick solution to the problem of real-time price-setting of electricity from a highly diverse mix of generation sources. The considered opinion of DESNZ and many others is that marginal pricing is ‘better the devil you know’. It is easier to futureproof the CfD sticking plaster than tear it off and try an entirely new, untested remedy. There are precious few real-world examples of capex-based wholesale electricity pricing that are relevant to the UK context. Brazil operates on a cost-based dispatch model, which helps reduce price volatility. This is important in managing Brazil’s hydroelectric-dominated power system. However, the lack of market-based price signals for scarcity or abundance limits incentives for the efficient deployment of new flexible resources like energy storage or demand response – which will be vital to the UK energy transition. What all this means, in all likelihood, is a very bumpy and volatile transitional period for the GB power system. The shift away from a handful of price-setting thermal generators is well underway. But we are a long way from the new dynamic system of clean power supplied predominantly from low opex variable renewables with a tiny sliver of high opex dispatchable backup plant at the margins. *Thanks for reading Energy Flux! This post is public so feel free to share it.* ## Structural reliance And even when we get there, the new system could be as volatile as the old one. DESNZ modelling indicates there could be an ongoing structural reliance on low-carbon high opex marginal generation sources (such as gas with carbon capture) beyond 2050. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/58d2b0be-ba32-4a1f-913b-770fb2469a16_876x585.png) *DESNZ modelling forecasts a sharp increase post-2035 in generation from low-opex power sources that are not on schemes such as the CfD, which limit infra-marginal rent* Furthermore, from 2035 onwards renewable generation is expected to shift away from CfD-type regimes that protect consumers towards merchant trading arrangements that do not limit inframarginal rent. The scope for political intervention to claw back extraordinary inframarginal profits will not diminish in such a system. Quite how volatile the transition and destination will be depends a lot on the policy decisions yet to be made by DESNZ. The government’s response to the second REMA consultation was expected in “summer 2024”. Whenever it arrives, locational pricing may or may not be part of the mix. But marginal pricing – for better or worse – definitely will be. [Leave a comment](#ghost-comments-root) [Subscribe now](https://www.energyflux.news/subscribe) - *This article was first published in *E-FWD* —* [*read the original*](https://efwd.energyvoice.com/insights/policy/marginal-pricing-pressure-calls-for-policy-action?ref=energyflux.news)*. Reproduced here with permission.* --- # More from *Energy Flux*: [Clear as mud“Europe’s liberalised gas market trading hubs are now essentially broken.” – Energy Flux, March 2022![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-147.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/b9c3e028-5eb8-43e4-91da-10d4dbeeecf1_1920x1440-jpeg.jpg)](https://www.energyflux.news/p/clear-as-mud) [Energy transition = volatility (part 2)The EU pioneered energy market liberalisation in the belief that free market competition delivers efficiencies that drive down the cost to consumers. The experiment with market-based pricing for natu
![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-148.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/b8e6e350-94ca-4198-80aa-69493d35fe16_5184x3292-jpeg.jpg)](https://www.energyflux.news/p/energy-transition-volatility-part) [Competitive tensionIf you read last week’s headlines about the increase in the administrative strike price for the UK’s next Contracts for Difference allocation round, you could be forgiven for thinking that offshore w
![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-149.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2093fa69-d606-456a-8cc4-5fed39f7f2af_700x470-1.png)](https://www.energyflux.news/p/competitive-tension) [Value over volumeThe role of natural gas in Europe’s power sector is moving from volume to value. As gas is increasingly marginalised by renewables, each kilowatt-hour of flexible gas generation is capturing higher market revenue.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-150.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d0a47f34-1a38-4742-a352-f072398f1cfa_1537x1024-3.png)](https://www.energyflux.news/p/value-over-volume) ### Geopolitics turns bearish URL: https://www.energyflux.news/geopolitics-turns-bearish/ Last updated: 2025-06-17T09:53:05.000Z **Bullish momentum has once again overwhelmed European gas markets. But this time the rally has nowhere to go, not least because geopolitical events – so often the clarion call of EU gas permabulls – are now conspiring to crash the market.** [Subscribe now](https://www.energyflux.news/subscribe) Prices on Dutch TTF, the European benchmark for natural gas, have rallied 12% since the ‘flash crash’ on 19 September. November-dated TTF, the front-month contract, is currently trading above €39/MWh – a four-week high. The summer bull run peaked in late August and prices partially retreated in September, but ephemeral factors seem to have revived upward momentum. Minor disruptions to the end of the Norwegian maintenance season, and a brief early cold snap across much of north-west Europe, are the main drivers. These events will pass, and there is no enduring or structural change on the horizon to justify continued wholesale gas price hikes. If anything, the opposite is true. Fears of an early loss of Russian gas transits through Ukraine, a major driving force behind the summer bull run, are already priced in. Consumers have been paying for a possible loss of gas flows into eastern Europe for several months now. Therefore, any departure from the baseline *can only be bearish* – and this is exactly how the situation around Ukrainian gas transits is squaring up. Last week, I described the possibility of a Russia-Azerbaijan gas swap deal to facilitate ongoing Ukrainian gas transits as a “fantasy” (see [*The Mask Slips*](https://www.energyflux.news/p/the-mask-slips)). I stand by that view. However, new information has come to light that suggests Azerbaijan (or perhaps another third party) could feasibly step in to keep Russian gas flowing into the EU. This [**Deep Dive**](https://www.energyflux.news/t/deep-dive) explains the political tailwinds behind such a deal, how it could be achieved, and why it could be pivotal for the winter natural gas market outlook. [Subscribe now](https://www.energyflux.news/subscribe) *Article stats: 2,500 words, 12-min reading time, 3 charts and maps* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### The mask slips URL: https://www.energyflux.news/the-mask-slips/ Last updated: 2025-06-17T09:53:31.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/847453dd-d290-4e9c-894b-a8c9d10536a1_1349x445.png) [Subscribe now](https://www.energyflux.news/subscribe) **Anyone labouring under the misconception that the European gas market is a bastion of analytical sophistication, prudent risk management and tech-savvy trading nous was abruptly relieved of that burden last week.** On Thursday, European gas traders swallowed a (pretty obvious) fake news story hook, line and sinker, triggering giddying price movements the likes of which we haven’t seen since the heady days of summer 2022. If you’re watching EU gas markets, you probably saw the spectacular failure of the gas market to spot the erroneous report (in Reuters, no less) claiming that Ukraine and Azerbaijan had sealed a ‘gas swap’ deal to keep gas flowing into Europe after 1 January, when the Russia-Ukraine transit deal expires. In a few frenzied minutes, traders dumped an estimated 5 TWh of futures on Dutch TTF, the European benchmark gas trading hub, prompting a \~10% flash crash in the prompt price. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a6e1b990-f3a4-4845-af15-2e833532dd98_1659x802-jpeg.jpg) **Flash crash! Source: Tim Partridge via* [**LinkedIn*](https://www.linkedin.com/posts/tradertim%5Fenergy-russiangas-gasprices-activity-7242536788848742401-w7fW/?ref=energyflux.news) It soon emerged (to the surprise of absolutely nobody) that no such deal had been done and, as is often the case when TTF prices go crazy, *nothing had actually changed* in the physical supply-demand balances in the European gas market. How on earth could the market be duped like this? I have thoughts. *Lots* of thoughts. *Article stats: 2,000 words, 10-min reading time, 8 original charts & graphs* ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/5cb8c1fd-6b94-49cf-9d6f-87815ba73f44_1024x682-jpeg.jpg) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Value over volume URL: https://www.energyflux.news/value-over-volume/ Last updated: 2025-06-17T09:54:22.000Z **The role of natural gas in Europe’s power sector is moving from volume to value. As gas is increasingly marginalised by renewables, each kilowatt-hour of flexible gas generation is capturing higher market revenue.** [Subscribe now](https://www.energyflux.news/subscribe) As [revealed by ](https://www.energyflux.news/p/renewable-crushing-gas-fired-power-wind-solar-eu)[*Energy Flux*](https://www.energyflux.news/p/renewable-crushing-gas-fired-power-wind-solar-eu)[ in August](https://www.energyflux.news/p/renewable-crushing-gas-fired-power-wind-solar-eu), pan-European gas-fired power is currently lower than at any time since 2005\. But that only tells half the story. Gas power plants are cutting back overall running hours as zero marginal cost wind and solar flood electricity grids. Thermal plants are increasingly called upon only when prices are at their highest – when weather-dependent sources are unavailable. The upshot is that coal and gas are retrenching into the highest-value settlement periods. Analysis of grid data from Germany confirms this trend. Average thermal (coal and gas) capacity factors are **\~16%** lower in 2024 compared to the five-year average, according to *Energy Flux* analysis of data from research institute Fraunhofer ISE. At the same time, the average ‘capture price’ of coal and gas plants is **42%** higher in 2024 compared to the 2019-21 pre-crisis period. Capture price refers to the weighted average price a generator receives for the electricity it sells in the market, accounting for day-ahead price fluctuations and the time of generation. Renewable energy capture prices are trending downwards, because wind and solar generate only when the resource is available. More wind and solar means greater temporal correlation of generation, leading to lower capture prices – a phenomenon known as ‘price cannibalisation’. But the opposite is happening for coal and gas. Since these plants are dispatchable, they can optimise revenue by generating during periods when prices are highest – typically when renewables are not available. This allows them to consistently capture prices that are above the overall day-ahead average. [Subscribe now](https://www.energyflux.news/subscribe) ## Capturing value A useful yardstick here is the ‘capture rate’. This is the ratio of the generator’s capture price to the average market price over the same period. Capture rate reflects how effectively one power station, or a group of generators, can capitalise on price volatility relative to others, or how this changes over time. The capture rate of coal and gas plants in Germany is on average **6%** higher in 2024 than it was over the preceding five years. This is a significant increase. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a3efd2d1-0f06-4889-9257-c833e509d7a8_5868x2904.png) However, at the other end of the spectrum, the renewables deluge is increasingly pushing coal and gas generation into negative pricing periods. There are several reasons why this might be happening, which this piece digs into. This data-rich [**Deep-Dive**](https://www.energyflux.news/t/deep-dive) takes a granular look at the impact of Germany’s renewables rush on the value proposition of gas-fired power, and the implications for policymakers considering the role of thermal generation in Europe’s rapidly changing power mix. While the story is more nuanced than the dramatic trend of crashing gas generation might initially suggest, the loss of the ‘volume’ role – catering to base load – cannot easily be replaced. As the data reveals, the shift from volume to value is by no means a like-for-like substitution of lost revenue. At the same time, thermal plants’ ability to retain their share of the highest-value market periods is under threat on various fronts. - *This post is a comprehensive analysis of the dynamics of thermal generation economics in the context of Germany’s energy transition. For the best reading experience, I encourage* [*viewing it online*](https://www.energyflux.news/p/value-over-volume) *in your browser.* *Article stats: 2,500 words, 12-min reading time, 14 original charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Podcast // Draghi // E-FWD event URL: https://www.energyflux.news/podcast-draghi-e-fwd-event/ Last updated: 2025-06-17T10:13:17.000Z Modo Energy podcast // thoughts on the Draghi report // join me at E-FWD event in Edinburgh on Thursday _This post is for paying subscribers only._ ### The unravelling begins URL: https://www.energyflux.news/the-unravelling-begins/ Last updated: 2025-06-17T09:54:55.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/05e2d3b6-57e2-499c-ae57-b2ab4f8165cf_1349x445.png) [Subscribe now](https://www.energyflux.news/subscribe) **The European gas market appears to be teetering towards a new bearish chapter.** Like a spinning top losing momentum, the bull market is caught in its final erratic throes. After the speculative buying frenzy of the last seven months, a reconciliation with flaccid fundamentals was overdue. That moment is nearly upon us, and traders are positioning accordingly on Europe’s benchmark gas trading hub, the Dutch Title Transfer Facility (TTF). This week’s subscriber-only [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) provides a forensic analysis of TTF fund movements and macro view of the wider gas/LNG panorama. The post concludes by describing how the unwinding of bullish positions could play out in TTF futures this winter, and other factors to consider as the heating season looms into view. *Article stats: 2,000 words, 9-min reading time, 12 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Turning point? URL: https://www.energyflux.news/turning-point/ Last updated: 2025-06-17T09:55:23.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/9b4ae0d9-7aa7-46df-85f2-c084fb07631b_1349x445.png) [Subscribe now](https://www.energyflux.news/subscribe) Depending on your perspective, the positioning of investment funds is now either the single biggest factor influencing European natural gas prices, or the best available indicator of where prices are heading. In either case, when hedge funds shift their weighting on the Dutch Title Transfer Facility (TTF), it is worth scrutinising. A speculative frenzy fuelled a 75% rally in TTF prices since February, and funds keep piling in. Total open interest on TTF breached 3,000 TWh for the first time in late August, which is a mind-boggling amount of gas: equivalent to 307 billion cubic metres, which is more than the entire annual gas demand of the EU in 2023. Open interest is now 18 times greater than underlying supply of gas in the Dutch market, a feat attributable in large part to the influx of speculative capital over the last 18 months. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/8e68ba21-a799-46ed-b64c-e29fd7c6b771_4096x2226.png) However, the latest data from the European Securities and Markets Authority suggests that these bullish hedge funds are (at the very least) pausing for breath by reducing their net length in TTF futures. Simultaneously, the physical players — gas suppliers and producers — reduced their net short position. For a variety of reasons (which I’ll dig into below), this tends to indicate the current cycle could be at or near its peak. This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) explores these developments to try to understand whether this is a temporary blip or the start of a new market phase. *Article stats: 1,600 words, 8-min reading time, 11 original charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The storage-speculation nexus URL: https://www.energyflux.news/the-storage-speculation-nexus/ Last updated: 2025-11-30T06:13:06.000Z **The European Union has once again achieved its gas restocking target early. At an aggregate level, EU underground gas storage facilities reached 90% full this week, more than two months ahead of the 1 November deadline.** [Subscribe now](https://www.energyflux.news/subscribe) The 90% refilling target is a central part of the REPowerEU plan introduced following the energy shock of 2022\. EU Commissioners credit this intervention as playing a central role in easing prices and protecting consumers in the aftermath of Russia’s full invasion of Ukraine. “The high level of gas storage in Europe means that markets are increasingly stable, prices are back around pre-war levels, and Europe can start refilling with confidence for next winter’s heating season,” energy commissioner Kadri Simson said in April. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/e45ab9e0-5572-45ca-86ed-c0a036ca8d6f_4156x2373.png) It might seem logical that forcing storage operators to hold record amounts of gas in underground storage would quell prices. But what if, counterintuitively, the opposite was true? New research suggests that the flagship mechanism of REPowerEU is in fact contributing to *inflation* of wholesale EU gas prices. The emergency policy intervention is flattening seasonal price spreads and creating perverse incentives for storage system operators, according to some experts and analysts. They say the 90% refilling obligation also encourages the kind of predatory speculation that has become evident on EU gas trading hubs, as [documented by ](https://www.energyflux.news/t/speculation)[*Energy Flux*](https://www.energyflux.news/t/speculation)[ in recent weeks](https://www.energyflux.news/t/speculation). Could it be that the REPowerEU plan is producing unintended consequences now that market conditions are more benign? This deep dive offers a critical examination, with reference to new statistical analysis of refilling and pricing data, as well as perspectives from expert commentators. It concludes by outlining an alternative policy of centralised management. Proponents claim this would be more cost-effective and less conducive to speculative manipulation of European gas markets — but the risk of unintended consequences is high. This is the first in a three-part series investigating the relationship between gas storage regulations and the behaviour of speculative capital. 1. [**Part one**](https://www.energyflux.news/p/the-storage-speculation-nexus) (this post) identifies the possible link between storage targets and speculation (August 2024) 2. [**Part two**](https://www.energyflux.news/p/storage-speculation-nexus-part-2-natural-gas-ttf-eu) uses regression analysis to prove the storage-speculation hypothesis (December 2024) 3. [**Part three**](https://www.energyflux.news/the-storage-speculation-nexus-part/) uses the same technique to dissect the Q1 TTF selloff and assess seasonal price risk for 2025-26 (May 2025) *Article stats: 3,000 words, 14-min reading time, 8 charts and graphs.* ✍ **FREE TO READ**: This article is available for free – just [sign up](https://www.energyflux.news/#/portal/signup/free) using your email address (choose the 'Free' subscription tier), then refresh this page to keep reading... _This post is for subscribers only._ ### Pump up the volume! URL: https://www.energyflux.news/pump-up-the-volume/ Last updated: 2025-06-17T09:58:57.000Z **Hedge funds seem to be hell-bent on leveraging geopolitical events to pump European natural gas prices higher.** [Subscribe now](https://www.energyflux.news/subscribe) Last week saw another significant increase in bullish bets being taken by speculative traders on the Dutch Title Transfer Facility (TTF) — Europe’s benchmark natural gas trading hub. Speculators boosted their net long positions on TTF by approximately €1.5 billion, according to calculations by *Energy Flux*. The increase extended overall net bullish position of hedge funds to more than €8 billion. The move coincided with a fresh bump in the price of gas traded on the TTF, as covered at length in Monday’s [**EU LNG Chart Deck**](https://www.energyflux.news/p/out-on-a-limb). Speculative capital keeps pouring into long positions in European gas futures, accelerating bullish price momentum predicated on fears of possible disruption to (what little remains of) Russian gas transits into the EU via Ukraine. But they are only fears, and gas flows through Ukraine continue uninterrupted (at the time of writing). This bonus post provides a short(ish) update now that data has been published on hedge fund positioning during the tumultuous events of last week. The data confirms an ongoing correlation between speculative capital movements and price action on TTF, shedding new light on the contracts being traded on the forward curve. *Article stats: 1,000 words, 5-min reading time, 4 charts and graphs* _This post is for subscribers on the Premium tier only._ ### Out on a limb URL: https://www.energyflux.news/out-on-a-limb/ Last updated: 2025-06-17T09:59:30.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/34f974dc-6d1b-441d-bb5a-ff301bae3a5f_1346x441.png) [Subscribe now](https://www.energyflux.news/subscribe) **For anyone doubting the influence of speculative capital on European gas prices, the events of the last fortnight — and the dashboard above — should offer pause for thought.** In the week ending 2 August 2024, hedge funds amassed their largest net long position in Dutch TTF futures since Russia’s full invasion of Ukraine. At the same time, the front month contract on the European gas benchmark climbed to its highest price so far this year — far outstripping movements on other major hubs and indexes. The bull run is a speculative bet on supply-side disruptions that are by no means guaranteed to happen. This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) explores how hedge funds are positioning in response to geopolitical events — priming European wholesale gas prices for what could be a spectacular autumn correction. *Article stats: 1,500 words, 7-min reading time, 10 charts and graphs* _This post is for subscribers on the Chart Deck and Premium tiers only._ ### From risk premium to risk-off URL: https://www.energyflux.news/from-risk-premium-to-risk-off/ Last updated: 2025-06-17T10:00:15.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/36d78d89-bddd-4b04-b1b3-76352381f461_1340x437.png) [Subscribe now](https://www.energyflux.news/subscribe) **If there are reasons to be ‘bullish’ on European gas prices, a global stock market meltdown on the eve of a Middle East regional conflict is not one of them.** European natural gas prices leapt to 2024 highs last week, as the US and Israel laid bare their appetite for military escalation against Iran and its proxies. The White House described the deployment of more US Navy aircraft carriers to the region as “de-escalatory”, in what must be a candidate for the 2024 Double Speak award (if such a thing does not exist, it should). Natural gas traders saw right through it, and pressed the only button that seems to matter when two de-facto nuclear powers square off: *buy*. European natural gas futures on the Dutch Title Transfer Facility duly rallied to prices not seen since December. That knee-jerk response might prove premature. While US warships were amassing in the Red Sea and Gulf of Oman, the bottom fell out of the Japanese stock market — triggering a deep selloff in US and European equities and cryptocurrencies. European gas futures fell more than 4% as febrile markets opened on Monday. Is the bullish thesis for gas prices finally unravelling? There are plenty of outlets happy to carry credulous commentary parroting the ‘gas scarcity’ narrative. *Energy Flux* is not one of them. Yes, the Middle East looks like it is about to boil over. And yes, a widening conflict could even disrupt oil and gas flows out of the Persian Gulf. But as this week’s **EU LNG Chart Deck** explains, temporary supply shocks are not the same as structural changes to underlying demand. The signal is in the latter, not the former. ###### ***Article stats: 2,100 words, 12-min reading time, 10 charts and graphs*** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Renewables are crushing gas-fired power URL: https://www.energyflux.news/renewable-crushing-gas-fired-power-wind-solar-eu/ Last updated: 2025-06-17T10:00:47.000Z [Subscribe now](https://www.energyflux.news/subscribe) **Europe’s electricity system is transitioning at breakneck speed. Renewables are displacing thermal generation so fast that gas-fired power has slumped to a two-decade low.** Continental Europe produced less electricity from natural gas over the first seven months of this year than at any time since 2005, according to research by *Energy Flux.* A few countries bucked the trend, but at the regional level there is no sign of this changing any time soon. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/eab3d721-c659-4bed-952c-7bf9fa0af788_4123x2322.png) The continent’s full-throttled embrace of wind and solar — combined with the return of French nuclear, and Alpine hydro, milder winters and a weak economic recovery — has dislodged gas from the heart of many EU power markets. The transformation is both astonishing and alarming. Europe’s great gas power slump has wiped out the equivalent of the combined annual primary gas demand of Denmark, Ireland, Norway and Portugal since 2017\. That’s roughly **240 cargoes of liquefied natural gas** (LNG) every year, no longer needed. Since LNG is the marginal molecule, this implies Europe could over time pivot away from not only Russian imports, but also LNG — which is more expensive, volatile, and carbon-intensive than pipeline gas. But dig a little deeper, and the speed of transition is also embrittling European power markets. Rising intra-day volatility, negative pricing, infrastructure bottlenecks, soaring balancing costs and incoherent policy responses are all straining pan-European market integration. This (very long) post dives into the latest data from ENTSO-E, the European Network of Transmission System Operators for Electricity, to define the contours of the gas generation slump and the factors driving it. It then takes a whistlestop tour of European power markets to put this historic slump into national context, with charts visualising 2024 gas generation against the five-year historical average in each country. Here’s a quick overview: - **Introduction**: Anatomy of a fall - **Policy**: Managed decline or messy antagonism? - **Italy**: Europe’s gas power giant turns to nuclear imports - **France**: Nuclear renaissance squashes gas power - **Spain & Portugal**: Value over volume in Iberia - **Germany**: Renewables surge tempers coal-to-gas switching - **Netherlands**: Renewables crowd out gas, as far-right coalition beds in - **Romania**: Too much gas, not enough capacity - **Austria**: Post-gas era beckons as Ukraine transits end - **Slovakia**: Booming nuclear & hydro keep gas in check - **Poland**: Gas flexes as coal-to-solar transition bites - **Greece**: Gas bridges gap between old and new energies Be warned: this post is much longer than usual, so be sure to load up the online web version in your browser for a better reading experience. [Read online](https://www.energyflux.news/p/renewable-crushing-gas-fired-power-wind-solar-eu) ###### ***Article stats: 4,000 words, 18-min reading time, 15 original charts and graphs*** _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Back at the desk URL: https://www.energyflux.news/back-at-the-desk/ Last updated: 2025-05-14T15:02:33.000Z Welcome back to *Energy Flux* — the newsletter analysing natural gas & LNG markets through the lens of Europe’s net zero journey. I am back at the desk and fully energised after a much-needed break. While I was away, *Energy Flux* surpassed the 5,000 subscribers milestone. A very warm welcome to all the new readers. If you’re new here, take a look at the [About page](https://www.energyflux.news/about) for an overview of the editorial remit and purpose of the newsletter. Energy markets are a bit sleepy this time of year. This offers an opportunity to dig into themes and trends that tend to fly under the radar. Here are some of the upcoming topics I’m exploring for forthcoming *Energy Flux* articles: 1. **EU gas-fired power deep-dive** (part 1 due this week) 2. **Asian & EU LNG infrastructure buildout rates** (mid August) 3. **Autumn arbitrage and LNG netbacks** (late August) If you’re a paid subscriber, I would welcome your suggestions and feedback to make the coverage more relevant and valuable to you. Please feel free to leave a comment, or send me a DM. — Seb *P.S. Publication cadence will be slightly reduced/erratic during the school holidays. Thanks for your understanding.* ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a8a4c4a5-cbbf-4cb9-b83f-3a654ab1d349_1152x640-jpeg-1.jpg) *An energy journalist hard at work on a summer’s day, according to AI* ### Drowning in liquidity URL: https://www.energyflux.news/drowning-in-liquidity-gas-ttf-speculation-europe/ Last updated: 2025-06-17T10:01:33.000Z **Liquidity is vital to the efficient working of commodity markets. An illiquid market is prone to extreme price volatility. But can the opposite also be true? If so, what is an appropriate balance? And when it comes to the European natural gas market, is it possible that the derivatives ‘tail’ is wagging the gas price ‘dog’?** [Subscribe now](https://www.energyflux.news/subscribe) Academic literature on the matter of financialisation of commodities is unequivocal: liquidity enables hedging, which facilitates prudent risk management and accurate price discovery. Speculation is almost always ‘good’, and there is scant empirical evidence to support the view that speculation inflates prices. At least, that’s the perceived wisdom. Questioning those assumptions is divisive: feedback to recent *Energy Flux* articles on [the topic of speculative capital movements on Dutch TTF](https://www.energyflux.news/t/speculation), the main EU gas trading hub, has fallen into two broad camps: those that welcome the scrutiny, and those that dismiss the line of questioning altogether. How to reconcile these opposing views? The assertion that speculative capital might be *manipulating* TTF gas prices has proven particularly divisive, so let’s put that controversy to one side. Instead, let’s start from the assumption that it is possible, theoretically, for there to be such a thing as an excessive amount of liquidity. The corollary is that it is also possible to have too much speculation. If we can agree on that premise, the question therefore becomes: at what point does ‘enough’ become ‘too much’? This post seeks to answer this question by: - analysing the physical and derivative traded volumes on the TTF gas hub, and introducing the concept of a ‘market-wide overhedging factor’ - comparing the ‘market-wide overhedging factor’ of TTF gas contracts to other commodities (oil, diesel, coffee, metals and other regional EU gas hubs) - taking a deeper look at the *behaviour* of gas producers and utilities — the supposedly ‘genuine’ players on TTF who use financial instruments to hedge their physical positions - quantifying whether speculation on TTF is indeed excessive, using the *T* index developed by Working (1960), based on both the type of *trader* and type of *trade* (the difference is material) The findings are illuminating, and nuanced. On the one hand, liquidity and overhedging in EU gas markets does indeed seem to be excessive from a normative perspective. But the quantitative analysis using Working’s equation suggests that speculation is within the bounds of acceptability for the normal functioning of commodity markets. Let’s dive in. *Article stats: 2,000 words, 10-min reading time, 7 original charts and graphs* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### EU watchdog wakes up to TTF speculation URL: https://www.energyflux.news/ttf-crackdown-eu-gas-position-limits-esma-afm/ Last updated: 2025-06-17T10:02:07.000Z *\*\*\* This post was updated on 4 July 2024 to include comment from ESMA and the AFM. See* [*‘Apples and oranges’*](https://www.energyflux.news/i/146193682/apples-and-oranges) *subsection below the paywall \*\*\** [Subscribe now](https://www.energyflux.news/subscribe) **Breaking news: European regulators have woken up to the problem of speculative capital making big bets on EU gas prices, and seem be taking action (of sorts).** The EU markets watchdog claims to have lowered the so-called ‘position limit’ that caps the size of trades on Dutch TTF — a measure that *Energy Flux* [called for](https://www.energyflux.news/p/ttf-transparency-gas-lng-market-energy-prices) just a few days ago to tackle the speculative problem that’s inflating prices on Europe’s biggest gas trading hub. It said a lower cap was needed because trading in TTF derivatives has exploded in recent months, while the amount of physical gas supply underpinning TTF futures and options is shrinking. But not everything is quite as it seems. Depending on how you measure it, the new limits appear to be *higher* than the ones they are replacing. In any case, they still allow market participants to make *very* large bets on future EU gas prices. In fact, the new limits theoretically allow for all registered TTF traders to hold aggregate net positions worth more than the GDP of Brazil (!). Here’s what you need to know. _This post is for subscribers on the Premium tier only._ ### The TTF transparency gap URL: https://www.energyflux.news/ttf-transparency-gas-lng-market-energy-prices/ Last updated: 2025-06-17T10:03:46.000Z **The niche topic of speculation in European natural gas markets is attracting media interest, triggering a debate around the influence of hedge funds on energy prices. This is to be welcomed. However, there is no way of reconciling conflicting views without more robust data and better regulation. This post sets out what we know, what we don’t, and what should be done about it.** [Subscribe now](https://www.energyflux.news/subscribe) - *If you’re new to Energy Flux, here’s a quick catch-up: anyone who trades futures contracts on Dutch TTF, the main EU natural gas trading hub, must disclose their long and short holdings every week. Hedge funds have increased their net length in TTF in recent weeks, and regression analysis shows that this is having at least some impact on prices. More on this* [*here*](https://www.energyflux.news/p/funds-versus-fundamentals)*,* [*here*](https://www.energyflux.news/p/eu-natural-gas-ttf-hedge-funds-fighting-gravity) *and* [*here*](https://www.energyflux.news/p/this-is-not-a-free-market)*.* Investment funds increased their net long position in Dutch TTF futures to 129 terawatt-hours (TWh) in the week ending 14th June 2024\. This was covered by two major price reporting agencies: Argus Media and ICIS. The mere suggestion that speculative capital might be influencing prices generated some pushback. There’s a lot to say about this, but first let’s clarify a few matters relating to the data itself. ## Data discrepancies Depending on the source you’re using, 129 TWh is either a two-year high or an all-time high for investment fund net holdings in TTF futures. Confusingly, there is more than one version of historic data from the Commitment of Traders (CoT) report, and analysts are now poring over the numbers to ascertain which is the most accurate. I don’t want to prejudge those findings but am keeping a close eye on this, because the discrepancy is considerable and it matters in terms of how we should think about what’s going on in the market today. One version seen by *Energy Flux* shows that speculative capital held a whopping **262 TWh** of net TTF length on 16th April 2021, just as the epic post-Covid, pre-Ukraine EU gas bull run was gathering steam. That’s a phenomenal amount of gas, equivalent to roughly 27 billion cubic metres — more than the annual gas consumption of the Netherlands in 2023\. If correct, this data tells us that there is a precedent for hedge funds to make even more wayward bets on EU gas futures than they are currently. That same dataset shows investment fund net length peaked again at 133 TWh on 21st January 2022, which is also more than the 129 TWh they currently hold. And we all know how 2022 panned out in European energy markets. So, point number one: **we need better data to put today’s speculative capital flows in the right context**. Are hedge funds placing all-time record bets on rising EU gas prices, or are they merely warming up? (For the record, the MiFID II CoT data is published by ESMA, the European Securities and Markets Authority, [here](https://registers.esma.europa.eu/publication/searchRegister?core=esma%5Fregisters%5Fcoder58&ref=energyflux.news). This dataset goes back to 2018\. An alternative dataset is published by ICE every Wednesday [here](https://www.ice.com/report/234?ref=energyflux.news), but it only goes back a few weeks, and EEX has its own CoT data [here](https://public.eex-group.com/eex/mifid2/rts-21/?ref=energyflux.news). Refinitiv/LSEG and Bloomberg also offer their own versions but these are not publicly available, and there are discrepancies between all of them. ESMA looks like this most reliable version.)[1](#footnote-1) ## Dissecting the rebuttal With journalists asking all the right questions about hedge funds’ multi-billion-euro gas bets, a rebuttal was inevitable. The most provocative to date came from Energy Aspects, a global research firm that counts oil majors, producers, traders, governments and investors among its client base. Energy Aspects took to [social media](https://www.linkedin.com/posts/nicky-ferguson-145277144%5Finvestment-funds-in-ttf-the-non-sensationalist-activity-7209482442838028288-oudA?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop) to offer a “non-sensationalist” view of investment fund flows in TTF futures. The company highlighted that recent increases in net fund positions have “actually been driven by the closing of short positions, not an increase in new bullish positions”. This is true: hedge fund long positions peaked at 420 TWh on 26th April 2024 and have fallen every week since then, with the latest data showing a total of 365 TWh (15%). Short positions have been unwound much more quickly, falling from 343 TWh to 235 TWh currently (-32%). This has driven up their overall net position from 77 TWh to 129 TWh over the same timeframe (+68%). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/e7ebd82c-d825-4239-8c8b-10edbd0dcd9e_4294x2007.png) Total market exposure — short plus long positions — has fallen from 763 TWh to 601 TWh over the same period (-21%). So, you could say hedge funds are retreating somewhat from EU gas futures, but an asymmetry in the winding down has left an increasingly large residual net length. Moreover, hedge funds still hold record volumes of TTF futures on their books. Both sets of CoT data show that, prior to February 2024, investment funds had never had more than 700 TWh of total exposure to TTF. They might have reined in their exposure somewhat since March, but **we’re still in unprecedented territory in terms of how much speculative capital is sloshing around in this market**. [Leave a comment](#ghost-comments-root) Energy Aspects made other claims that are hard to fact check. For example, the CoT data apparently “contain delta-adjusted option positions” which “likely inflates the net number”. I am yet to see a version of CoT data that explicitly breaks out TTF options, so this point is moot (please [let me know](mailto:seb@energyflux.news) if I have missed something). The firm also “estimates” that “funds actually took large bearish bets on summer 2024 TTF prices while offsetting these positions with long positions in winter 2024 contracts”, i.e. they are playing the seasonal calendar spread. Again, no way to easily verify this without inside knowledge of what hedge funds are actually buying, because the EU regulations do not require this level of disclosure (more on this below). Their final claim — that investment funds “are not puppet masters” and they do not “attempt\[
\] to control the market” — seems to be a direct reference to the image I used to illustrate my first article about this, [*Funds versus fundamentals*](https://www.energyflux.news/p/funds-versus-fundamentals). This rebuttal is simply an opinion. Hedge funds are notoriously tight-lipped and rarely, if ever, speak publicly about their trading strategies or motivations. So, yes, they might be honest brokers looking to take billions of euros of client’s money for a fun ride on the TTF rollercoaster and see what happens. Or maybe not. Who can be sure? [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/b45c1efe-b3f6-43a9-b4e8-fa36f7fba81a_1319x879-jpeg.jpg)](https://www.energyflux.news/p/funds-versus-fundamentals) Definitely not puppet masters [Subscribe now](https://www.energyflux.news/subscribe) ## Shining a light That brings me onto the next point: **we need better regulation to improve transparency**. The EU’s ’s [markets in financial instruments (MiFID II) regulation](https://www.esma.europa.eu/publications-and-data/interactive-single-rulebook/mifid-ii?ref=energyflux.news), which requires market participants to disclose their weekly long and short TTF positions, is a blunt instrument. To recap from [this post](https://www.energyflux.news/p/eu-natural-gas-ttf-hedge-funds-fighting-gravity), it groups together all the pools of capital into three broad groups: - **Investment Funds** (i.e. hedge funds/speculative capital) - **Commercial Undertakings** (physical players, e.g. gas producers and utilities) - **Credit Institutions** (any counterparty, i.e. investment bankers, brokerages and traditional banks). These groupings obscure the nuances in the types of capital and their risk appetite. A larger number of categories with more precise definitions according to fund size, institution type and business activity would tell us more about who is holding TTF futures and what their motivation might be. This is particularly pertinent because (and you will excuse the hearsay) I am told that many investment funds disclosing TTF positions also own interests in critical infrastructure such as pipelines and gas production facilities. There is no way to verify this, but better regulation requiring TTF market participants to disclose all relevant business dealings would help us understand why certain funds behave the way they do. It might even expose or prevent manipulation. There’s a [theory](https://x.com/moldvayendre/status/1802587401652420951?ref=energyflux.news) doing the rounds that investment funds might have teamed up with physical gas producers and suppliers to back up their paper positions and move the market in their favour. The theory is unsubstantiated, but this is how it might work: both sides buy long before a deliberately engineered ‘unscheduled outage’, then prices rise: hedge funds make a killing and cash out, and the producers save some molecules to sell at a higher price after the event. Everyone’s a winner. That’s according to Endre Moldvay, an outspoken quantitative engineer and ex-energy trader who posts [epic threads](https://x.com/moldvayendre/status/1802587327287460060?ref=energyflux.news) about TTF speculation under the X handle of ‘Illusionist’. To be clear: this is pure speculation, but the fact that we can’t rule it out speak to the opacity of the market and paucity of disclosure requirements. ## More granularity, please The MiFID II regulation should also make market players disclose (anonymously) the actual contracts that they hold. When CoT is updated, all we know is that these groups increased or decreased their long and short holdings in a generic basket of TTF futures. There is no requirement to break this down into monthly, seasonal or yearly TTF futures. If we knew that, say, 30% of hedge funds’ current 129 TWh of net length expires in October 2024 then analysts could make reasonable assumptions about whether and when these positions might be unwound. This would help ‘genuine’ market participants to hedge their exposure to this inherently volatile commodity. End-users are struggling to second-guess a market that is, frankly, saturated by speculative capital at volumes capable of moving the entire forward curve by double-digit percentages on any given day of the week. [Subscribe now](https://www.energyflux.news/subscribe) ## Lower position limits There is a limit to how much paper gas a hedge fund can hold at any given moment. This volume is decided by Dutch financial markets regulator AFM, with EU oversight from ESMA, the European Securities and Markets Authority. The position limits were [lowered in 2022](https://www.esma.europa.eu/sites/default/files/library/esma70-55-12400%5Fopinion%5Fon%5Fposition%5Flimits%5Fon%5Fice%5Fendex%5Fdutch%5Fttf%5Fgas%5Fcontracts%5Fsignificant%5Fcontracts.pdf?ref=energyflux.news) but are, arguably, still way too high. The spot month position limit is 17 TWh and other months (i.e. contracts with expiry further out on the futures curve) is 101 TWh. Given that there are more than 300 hedge funds trading TTF futures, these limits allow speculative capital to hold more than 30,000 TWh of gas futures. That’s more than six times the annual consumption of the entire region of Europe (including the UK, Norway, Turkey and Ukraine). To put it another way, a single hedge fund could in theory hold gas futures equivalent to almost three times the annual consumption of Norway and still be compliant. Under MiFID II, limits must “prevent market distorting positions”. It is hard to argue that the current limits achieve that. Maybe as well as a hard volumetric cap, there need to be a dynamic cap defined as a percentage of all traded TTF volumes? So, to conclude, our understanding of the influence of speculative capital on TTF prices is limited by a lack of transparency. Nature abhors a vacuum, so it is only natural that speculation about the speculation (meta-speculation?) fills the void of information. These four measures would improve matters: - A single authoritative and publicly available historical CoT dataset - More precise definitions of each market participant, including related business disclosure - A requirement to disclose the expiry dates of all traded TTF volumes - Lower position limits, and/or a dynamic cap To be clear, I’m not an expert on any of this and I welcome alternative views. I have no skin in the game and my sole motivation in writing this is to foster informed debate, because gas prices impact lives and livelihoods. Please feel free to leave your thoughts in the comments section, or [send me an email](mailto:seb@energyflux.news) in private. **Seb Kennedy | Energy Flux | 24 June 2024** [Leave a comment](#ghost-comments-root) Good, honest research takes time. If you value independent market analysis, please consider becoming a free or paid subscriber — and keep Energy Flux going --- # More from *Energy Flux*: [This is not a free marketEurope’s single gas market stands out as a paradigm of liberalisation, ostensibly embodying the principles of borderless competition and market-driven pricing. Yet, beneath the veneer of this deregulated nirvana, political machinations and financial manoeuvring are exerting growing influence on price discovery.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-188.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/8690563d-0abe-4b42-9f8e-6f848328b127_1500x999-jpeg-3.jpg)](https://www.energyflux.news/p/this-is-not-a-free-market) [Fighting gravityLast week’s post on speculation in European gas markets triggered a surprising response from readers and on social media. That article considered just one segment of participants trading in Dutch TTF gas futures: hedge funds. But they aren’t the only players in this market.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-189.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/382b1c7e-35a3-4696-80e2-f0881098d8b2_1024x838-jpeg-6.jpg)](https://www.energyflux.news/p/eu-natural-gas-ttf-hedge-funds-fighting-gravity) [Funds versus fundamentalsEuropean natural gas markets have turned decidedly bullish and hub prices are on a tear. But how much of this is due to speculation in ‘paper’ derivative markets? Looking at the data, the answer seems to be ‘quite a lot’.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-190.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/31be83df-0fba-4d6d-8de1-7324a3ad9aa8_1319x879-jpeg-11.jpg)](https://www.energyflux.news/p/funds-versus-fundamentals) --- 1. This paragraph was updated on 27/06/2024 to add a link to the ESMA and EEX data, to clarify the discussion around various data sources and to explain that ESMA data is probably the most reliable. [↩](#footnote-anchor-1 "Jump back to footnote 1 in the text.") ### This is not a free market URL: https://www.energyflux.news/this-is-not-a-free-market/ Last updated: 2025-06-17T10:04:35.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/139f6525-f06a-4bf2-850c-ec5398987095_1349x445.png) **Europe’s gas market stands out as a paradigm of liberalisation, ostensibly embodying the principles of borderless competition and market-driven pricing. Yet, beneath the veneer of this deregulated nirvana, political machinations and financial manoeuvring are exerting growing influence on price discovery — and the multitude forces behind this trend are gathering steam.** [Subscribe now](https://www.energyflux.news/subscribe) Natural gas has long been a heavily politicised commodity in import-dependent Europe. Gazprom’s orchestrated pre-invasion disruption of exports in late 2021 shattered any pretence to the contrary. What’s changed since then is the ability to defend, with conviction, the credibility of EU gas price formation. The dislocation of paper and physical markets is becoming hard to ignore, with prices responding at lightning speed to nebulous factors — narratives, sentiment, (geo)politics — or to the opaque moves of invisible market players. By exposing Europe’s energy vulnerabilities, Russia opened the door to a volatile new chapter in EU gas markets that bears the hallmarks of excessive speculation. Look no further than the current bull run in global gas hubs and LNG spot pricing that is unfolding against a backdrop of weak demand fundamentals. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/e5fc6029-f9a0-42ca-971b-6d367ca3b803_4249x2148.png) This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) analyses recent bullish price movements in the context of: 1. falling overall European gas and LNG imports 2. divergent price signals in TTF and JKM futures 3. political machinations around Ukraine gas transits 4. the ongoing TTF short squeeze by hedge funds It also scrutinises the prevailing narrative of ‘robust’ Asian LNG demand, and contemplates whether gas diplomacy in eastern Europe could reset the market by triggering a mass unwinding of long TTF fund positions. This is another very long post that covers a lot of ground. Let’s get stuck in. ###### ***Article stats: 2,400 words, 12-min reading time, 10 charts and graphs*** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Fighting gravity URL: https://www.energyflux.news/eu-natural-gas-ttf-hedge-funds-fighting-gravity/ Last updated: 2025-06-17T10:05:29.000Z **Last week’s post on speculation in European gas markets triggered a surprising response from readers and on** [**social media**](https://www.linkedin.com/posts/energy-flux%5Fnaturalgas-natgas-lng-activity-7203672650102009857-8f%5Fo?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop)**. Evidently it touched a nerve, so I’ve been doing more digging.** [Subscribe now](https://www.energyflux.news/subscribe) That article considered just one segment of participants trading in Dutch TTF gas futures: hedge funds. But they aren’t the only players in this market. Under the EU’s [MiFID II regulation](https://www.esma.europa.eu/publications-and-data/interactive-single-rulebook/mifid-ii?ref=energyflux.news), three distinct groupings of traders must report their weekly long and short TTF holdings. Hedge funds and other pools of speculative capital are categorised as ‘Investment Funds’ (IF). The other two are labelled and defined as follows: - **Commercial undertakings (CU)**: A company with physical exposure to gas such as a producer (e.g. Shell, ExxonMobil) or utility (e.g. Uniper, EDF), which uses TTF futures for hedging purposes. - **Investment Firms or Credit Institutions (CI)**: This is a catch-all pot for investment bankers (e.g. Goldman Sachs), brokerages (e.g. OTCex Group) and traditional banks (e.g. Barclays, HSBC). These entities are the ‘market makers’ who act as intermediaries between buyers and sellers to provide liquidity and create a two-sided market. Unlike hedge funds, the CU and CI categories are more aptly described as ‘genuine’ market participants because their activities are not purely speculative. They either operate directly in physical markets, or they facilitate trade in actual molecules. I went back to the ICE Commitment of Traders data to see how the net long/short position of each of these groupings shifted during the market turmoil of recent years. What I discovered clarified in my mind what happened when the European gas market lurched from the Covid crash of 2020 into the pre-Ukraine bull run of 2021, the ensuing wartime insanity of 2022 and the great correction of late 2023/early 2024. With front-month TTF hitting a peak of €36/MWh ($11.50/MMBtu) in early June, there is plenty of evidence to suggest that the ‘paper’ market in derivative futures has become dislocated from the supply/demand fundamentals that govern the physical gas market. Delving into the relative positioning of ‘speculative’ and ‘genuine’ funds allowed me to formulate some ideas about how the dislocation might be reconciled in the coming months. This is what today’s post is all about: hedge funds pumping bullish capital into a fundamentally bearish market. Let’s dive in. ###### ***Article stats: 1,600 words, 8-min reading time, 6 charts and graphs*** [Subscribe now](https://www.energyflux.news/subscribe) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Funds versus fundamentals URL: https://www.energyflux.news/funds-versus-fundamentals/ Last updated: 2025-06-17T10:06:09.000Z **European natural gas markets have turned decidedly bullish and hub prices are on a tear. But how much of this is due to speculation in ‘paper’ derivative markets? Looking at the data, the answer seems to be ‘quite a lot’.** [Subscribe now](https://www.energyflux.news/subscribe) Front-month Dutch TTF, the EU gas benchmark, rose 20% in May driven by supposed fears of tightening global gas markets. Just yesterday, prompt TTF leapt to a 2024 high after the [discovery](https://www.reuters.com/markets/commodities/norway-gas-export-plummets-sleipner-outage-shuts-nyhamna-plant-2024-06-03/?ref=energyflux.news) of a pipeline crack curtailed Norwegian gas exports to the UK and Europe. While Asian demand for liquefied natural gas (LNG) is certainly growing and there have been several notable supply-side outages so far this year, the bullish narrative rang a little hollow for me. It all feels like supply contraction dressed up as demand growth, with a heavy splodge of geopolitical risk premium thrown in for good measure. I alluded to the role of speculative capital in exacerbating upward price movements in a couple of recent posts (see [here](https://www.energyflux.news/p/bursting-the-narrative-bubble) and [here](https://www.energyflux.news/p/gas-bulls-sweat-it-out)). Until now, I hadn’t set my mind to quantifying the impact. This post seeks to do just that, with the help of expert analysts. Using a regression model, the findings are clear: hedge fund speculation accounts for about **one-third of the current TTF price**, and movements in speculative capital can be attributed to **more than 50% of the weekly change in TTF prices** in recent months. This post explains how these figures were calculated. It also models the cost to a typical industrial consumer (a German automaker) of buying power in inflated futures markets compared to taking their chances in the spot market. In the eternal debate over the role of speculation in free markets, the question always boils down to: when does ‘enough’ speculation become ‘too much’? Looking at the modelling results, it is hard *not* to conclude that today’s market has a speculative problem. Here’s why. ###### ***Article stats: 2,600 words / 12-min reading time, 6 charts and graphs*** _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Bursting the narrative bubble URL: https://www.energyflux.news/bursting-the-narrative-bubble/ Last updated: 2025-05-14T15:02:51.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/45301c25-2255-4aae-a224-2a41d96f4892_1339x435.png) [Subscribe now](https://www.energyflux.news/subscribe) **European gas hubs and Asian LNG spot prices are surging on the back of two unfolding stories which, superficially at least, support the bullish narrative that’s now driving market sentiment. One is the costs blowout at Golden Pass LNG, which bankrupted the project’s EPC contractor and signals potentially lengthy delays in bringing the newest Texas export project online. The other is a mysterious court ruling that supposedly threatens what little remains of Russian pipeline gas flows entering Europe.** Both stories are interesting for reasons I’ll dive into in this post. But it should be stated clearly from the outset that the price response to market events appears, to say the least, overblown. The material adjustments to global supply-demand balances arising from a single project’s commissioning delays or a slight acceleration to the end-date for Russian gas transits through Ukraine are not, in and of themselves, enough to justify the market response. Prices on Dutch TTF, Europe’s main gas trading hub, are up 16% over the fortnight and JKM, the Asian spot LNG benchmark, has registered similar gains. Henry Hub has gained a whopping 43% since the start of the month. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2d71b320-e43c-49cb-b975-5402670d8b5f_4282x2157.png) To be clear, these are not the only two events driving gas price inflation at the moment. But they exemplify a wider problem: the predilection of market participants towards upside over-reaction. A lot of people made a lot of money during the market mayhem of 2022, and there’s a reluctance to acknowledge that today’s gas market is fundamentally different to the one roiled by Russia’s full invasion of Ukraine. This can’t be explained away as ‘market jitters’ forever, and the longer it goes on the more people will start to question the credibility of natural gas price formation. I suspect there’s more to it than ‘nervous traders’, and I’ll be looking into this more in the coming weeks. (If you missed it then I would recommend reading my Nov’23 post, [Greed over growth](https://www.energyflux.news/p/greed-is-killing-gas-demand-growth), which details how and why gas markets are failing consumers. That post is free to read.) Today’s post explores the Golden Pass and OMV court ruling stories before diving into their impact on gas and electricity markets in Europe (with the usual selection of *Energy Flux* charts and graphs). There’s a lot of ground to cover, so be sure to [open this post in your browser](https://www.energyflux.news/p/bursting-the-narrative-bubble) for a better reading experience. ###### ***Article stats: 2,450 words, 12-min reading time, 12 charts and graphs*** ## Costs blowout dĂ©jĂ  vu **Every few years, a major engineering or construction contractor gets chewed up and spat out by the American liquefied natural gas industry. Last week it was the turn of Zachry Group, which filed for Chapter 11 bankruptcy protection after being pushed into insolvency by spiralling costs at the Golden Pass LNG project in Texas.** The filing came days after Zachry filed a $1 billion-plus court claim against the 15.6 million tonne per annum (mtpa) LNG export conversion project, which is owned by ExxonMobil (30%) and QatarEnergy (70%). Zachry claims Golden Pass was “plagued with unexpected challenges that put it behind schedule and over budget” from the get-go, and that the owners “refused to foot the bill” for accelerating work to get the project back on track. Zachry was on the hook for cost overruns because it agreed to build the project under a $10 billion-plus lump sum engineering, procurement and construction (EPC) turnkey contract. As the name suggests, such contracts pay out a fixed price to undertake the work – placing the lion’s share of construction risk onto the EPC contractor. [Get 10% off a group subscription](https://www.energyflux.news/subscribe) The risks inherent in building a multi-billion-dollar infrastructure project are too great for any EPC contractor to stomach alone. So, as is standard practice in the LNG world, Zachry partnered with compatriot CB&I (McDermott) and Japan’s Chiyoda Corporation in a dedicated joint venture called CCZJV – which Golden Pass hired to do the job in 2019. Zachry is the lead partner in CCZJV with responsibility for 52% of the scope of work, valuing its share at $4.8 billion. The Texas-based company says it absorbed \~$2 billion in cost impacts arising from project delays and cost increases, which it sought to claw back from Exxon and QatarEnergy. But the big boys “leverage\[ed\] their superior wealth and bargaining power” to string out the negotiations and ultimately refuse to pay, leaving Zachry broke. ## DĂ©jĂ  vu all over again The story is all too familiar for Zachry’s JV partners. Chiyoda and McDermott were both plunged into financial crisis while working on the Cameron and Freeport LNG projects in 2018\. Chiyoda sought a bailout from major shareholder Mitsubishi and its CEO even took a 50% pay cut as part of emergency cost-savings measures. McDermott sought Chapter 11 protection and emerged from bankruptcy after restructuring in 2020. The experience probably explains why they decided to take smaller shares in the CCZJV joint venture at Golden Pass: once bitten, twice shy. It seems that Zachry did not heed the warnings, despite working on Freeport and Cameron alongside Chiyoda and McDermott. Golden Pass LNG says construction is 75% complete and the owners are “committed to completing the project”, but it is not clear how they can when Zachry is seeking “structured exit” from the contract. Replacing the EPC contractor at this late stage is a complex task that will only result in more costs and delays, since Exxon and QatarEnergy will need to negotiate new prices and deadlines for every outstanding work package. ## Why does this matter? The fact that the American LNG industry has yet again bankrupted a major established EPC company with a 100-year track record is a big red warning sign to the current US LNG buildout. Zachry is the lead EPC contractor at the Plaquemines LNG export project in Louisiana. Venture Global says it doesn’t foresee any issues building the 10 mtpa first phase on time, but how can they be so sure? Exxon and QatarEnergy were racing to get Golden Pass online this year, presumably to lock in higher profits before a flood of new LNG supply tanks prices in 2026/27\. But post-Covid supply chain and logistics problems, combined with post-Ukraine cost increases and trade disruptions, caused costs to “explode”. Furthermore, Golden Pass “erroneously described soil conditions at the plant site, forcing a redesign of numerous plant structures”, Zachry says. The Freeport and Cameron cost overruns were triggered in part by an acute labour shortage on the US Gulf Coast following the destruction wreaked by Hurricane Harvey in 2017 and subsequent rebuilding effort. History might be about to repeat itself here too. US government forecasters are [predicting](https://www.reuters.com/world/us/us-forecasters-see-extraordinary-2024-hurricane-season-2024-05-23/?ref=energyflux.news) an “extraordinary” 2024 Atlantic hurricane season that could see as many as seven named hurricanes potentially making landfall, fuelled by “record” ocean temperatures and La Niña atmospheric conditions. Now, forecasts are always speculative and their track record is by no means perfect. But if Mother Nature drops a bomb on the epicentre of America’s LNG buildout just as an unprecedented wave of construction is getting underway, there’s every chance that Zachry won’t be the last EPC contractor filing for Chapter 11. [Refer a friend](https://www.energyflux.news/leaderboard) ## The price is wrong Delays to commissioning Golden Pass ought to dampen domestic US gas prices. Markets had already priced in the up-to 2 billion cubic feet per day (Bcf/d) of additional feed gas demand from the project, so deferring that demand should alleviate market tightness in the near-term and strengthen prices further out on the curve. But instead, the opposite happened. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/6b04206e-58cb-4f68-9a66-329299c1ded9_4306x2172.png) Now, there are other factors influencing US gas prices, not least potentially explosive new power sector demand driven by [data centres, cloud computing and AI](https://www.energyflux.news/p/data-centres-vs-us-lng-america-gas-power-demand). But that doesn’t entirely explain the counter-intuitive price moves in the US, or indeed those happening in other major gas markets too. ## Traders pounce on court mystery European gas prices went berserk last week after Austria’s main gas company OMV warned of a potential cut-off in Russian gas supply from Gazprom, in the wake of an undisclosed “foreign court decision”. The mysterious ruling, obtained by an unnamed “major European energy company”, would require OMV (rather than Gazprom) to reimburse said company for gas supply disruptions that arose following Russia’s 2022 invasion of Ukraine. If the ruling is enforced, OMV “considers it likely” that Gazprom would halt gas supplies to Austria, based on the Russian company’s conduct in similar situations. Nobody knows when or if the ruling will be enforced, or any further detail about its legal basis. OMV has alternative non-Russian supplies and doesn’t expect any impact on its ability to supply customers. But the announcement was enough to send TTF futures spiralling – and not just for prompt delivery. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/93d0570d-cb47-4f79-84d2-c7e183a5d38b_4276x2106.png) The whole forward curve was electrified by the news. But what are we really talking about here? The *possibility* that Gazprom *might* halt gas supplies into Austria *at most* a few months earlier than expected. The Russia-Ukraine gas transit deal is due to expire at the end of the year, signalling an end to pipeline flows through that route in Austria and other westward markets. ## Expensive gas = expensive electricity Again, facts are an afterthought in the realm of gas price formation. That’s too bad for gas and electricity consumers (i.e. everyone), who will face higher bills as a result. German power futures have risen by a quarter in less than two weeks on the back of TTF gains, because gas is increasingly the marginal price-setter (as coal is pushed out of the merit order). This speaks to the importance of flexibility in power markets, and the reliance on gas to provide this flexibility. Until batteries or demand response play a greater role in flexibility, power prices simply *must* rise to accommodate higher gas prices. Gas is also [driving carbon prices higher](https://research.sebgroup.com/macro-ficc/reports/48660?ref=energyflux.news). As long as there is price-sensitive coal available at the margins, a higher gas price incentivises more coal generation to come back into merit. This results in more power sector emissions, which creates greater demand for emissions allowances. This, in turn, pushes up the carbon price. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/1f349f5e-6489-4173-92a5-ae47f5571d79_4216x2033.png) The correlation between TTF and carbon allowances (EUAs) on the emissions trading system (ETS) has become pronounced in recent months. So much so, in fact, that traders can now hedge their positions by going long on TTF and shorting EUAs, according to market sources. This dynamic explains why gas-fired power is becoming more profitable even as gas fuel costs are rising. Clean spark spreads – the profitability of gas-fired power after paying for carbon – are nosing back into positive territory for June/July 2024, even though all the speculative bullishness is making gas and carbon more expensive. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/729b94dd-65fd-431c-a231-bef56da4ab09_4288x2065.png) ## Europe exports fear TTF’s gyrations travel east in a flash. JKM, the Asian LNG spot price, has soared to a five-month high on the back of Europe’s latest gas bubble. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/e66fe36e-6d24-4fb3-8218-bb344da3161a_4294x2172.png) Again, there’s not a whole lot to base this on other than ‘Europe is bidding up the price’. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/cbeadcb4-65d7-4a5a-a404-5a5c3a078bae_4288x2010.png) The knee-jerk response means that spot LNG is once again definitively more expensive than LNG sold under long-term oil-indexed contracts. The window of opportunity for Asian buyers to [dial down their oil-linked volumes](https://www.energyflux.news/p/the-asian-lng-glut-is-here-oil-gas-price-trade?utm%5Fsource=publication-search) to buy cheaper spot turned out to be very short indeed. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/96ae174d-d2a7-4d29-98b3-a1d095becf4f_4306x2046.png) This turn of events can only push Asian buyers away from spot procurement back towards more oil-indexed LNG. There had been some market chat about buyers renegotiating term contracts that were agreed in 2022-23 but had not yet been finalised into sales and purchase agreements (SPAs). That seems less likely now, particularly since Shell signed a [notable deal](https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/lng/052324-indias-amns-signs-500000-mtyear-lng-deal-with-shell-at-115-slope-to-crude-oil?ref=energyflux.news) with Indian steelmaker AMNS at an 11.5% slope to crude — the lowest Brent slope since the outbreak of hostilities in Ukraine in 2022. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d4e56d46-7dd3-4178-8529-5481f00e1796_4306x1740.png) So, too, does the possibility of Asian buyers diversifying their price exposure by buying LNG under long-term delivered prices indexed to Henry Hub. [A recent report](https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/lng/051324-dilemmas-in-lng-term-deals-amid-higher-henry-hub-forward-curves?ref=energyflux.news) indicated there is appetite in China and elsewhere to explore contracts with a Henry Hub slope of between 119% and 121% plus a $4.50/MMBtu constant to cover liquefaction and freight costs. With everything that’s going on in the American energy space, a long-term commitment to buy LNG indexed to HH is strewn with risk for no apparent gain. It is the worst of both worlds: all the volatility of spot procurement, with all the inflexibility of a long-term contract. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/f4c29fb9-6fe3-4e6e-95a1-d4dcabda9c51_4297x2169.png) Yes, HH-linked LNG is cheaper than even a 10% Brent slope *today*, but that won’t last long. Regardless of how quickly the US LNG buildout occurs, Henry Hub is on a bumpy ride north. Hitching your economic fortunes to that wagon is only going to end in tears. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/75694242-5ec3-493f-ac03-810b573a5c21_4288x2153.png) To conclude: there are powerful forces working away behind the scenes to inflate gas and LNG prices. Over-reactions ripple across global markets, and outcomes are hard to anticipate. The bullish narrative could lock in structural risks by creating a febrile backdrop to long-term dealmaking. I’ll be digging deeper into what’s driving gas volatility in the coming weeks. Stay tuned for more. **Seb Kennedy | Energy Flux | 27 May 2024** [Leave a comment](#ghost-comments-root) --- # **🧠 Energised Minds** ***— Critical thinking on crucial energy issues —*** **“How the hydrogen hype fizzled out”** — the [FT’s Lex column](https://www.ft.com/content/14a60649-172a-45c1-99a9-039f481430e7?ref=energyflux.news) becomes the latest mainstream outlet to dissect the dawning reality among investors that many of the vaunted use cases for hydrogen are evaporating before their eyes. **“Face it, Putin: China is just not that into your gas pipeline”** — the Russian president has once again left Beijing empty-handed, after being give the run-around by his counterpart Xi Jinping over the Power of Siberia 2 pipeline to China, [writes David Fickling in Bloomberg](https://www.bloomberg.com/opinion/articles/2024-05-20/xi-putin-china-is-just-not-that-into-russia-s-gas-pipeline?ref=energyflux.news). **“Could US data centres and AI shake up the global LNG market?”** — if Henry Hub surges, oil-indexed contracts will become more attractive to buyers, according to [Wood Mackenzie analysts](https://www.woodmac.com/news/the-edge/could-us-data-centres-and-ai-shake-up-the-global-lng-market/?ref=energyflux.news) (who have clearly been reading *Energy Flux*!) --- # More from *Energy Flux*: [Data centres vs US LNGCan the United States produce enough cheap natural gas to service both the coming new wave of liquefied natural gas (LNG) export projects and an anticipated explosion in data centre power demand? With US shale producers![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-200.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/fe54fd7d-7c69-4ad7-bd82-cf298c5898a1_1024x682-jpeg-6.jpg)](https://www.energyflux.news/p/data-centres-vs-us-lng-america-gas-power-demand) [The Asian LNG glut is hereThe first indications of oversupply are manifesting in the Asian market for liquefied natural gas (LNG), triggering a shift in market power from sellers to buyers.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-201.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/37ceef08-2457-444f-bcca-e14f62fc3a33_1920x1219-jpeg-10.jpg)](https://www.energyflux.news/p/the-asian-lng-glut-is-here-oil-gas-price-trade) [Gas bulls sweat it outBullish sentiment is breaking out across global natural gas markets. Whether you put it down to market fundamentals or market manipulation, the fact remains that traders are bidding up near-term prices in Europe and Asia. But the outer reaches of the forward curve tell a very different story.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-202.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/e2309457-b043-4eae-a25a-d9c12f08c7aa_1196x797-jpeg-5.jpg)](https://www.energyflux.news/p/gas-bulls-sweat-it-out) ### Russia goads Britain with Antarctic oil fable URL: https://www.energyflux.news/russia-britain-antarctic-oil-uk-war-ukraine/ Last updated: 2025-06-17T10:07:23.000Z DEEP DIVE: British Conservatives want to drill for oil in the South Pole. They are playing into Russia’s hands _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Gas bulls sweat it out URL: https://www.energyflux.news/gas-bulls-sweat-it-out/ Last updated: 2025-06-17T10:08:43.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/4276c0bc-b6f4-48ee-b43c-69d52c2b4ba0_1341x441.png) [Subscribe now](https://www.energyflux.news/subscribe) **Bullish sentiment is breaking out across global natural gas markets. Whether you put it down to market fundamentals or market manipulation, the fact remains that traders are bidding up near-term prices in Europe and Asia. But the outer reaches of the forward curve tell a very different story.** Let’s take a quick look at the fundamentals underpinning the bullish thesis. The global supply-balance has tightened somewhat thanks to a big drop in US liquefaction rates and a major outage at the Gorgon LNG project in Australia that could last well into the northern hemisphere summer. Simultaneously, sweltering temperatures are driving demand for gas-fired power to run air conditioning units in major Asian economies. This has necessitated a higher spot price to pull LNG cargoes out of the Atlantic, stimulating a price response from traders in Europe with an eye on the gas restocking task ahead. Hedge funds are now piling into futures markets on the expectation that this upward momentum will endure over the coming months. It matters not that European gas stocks are still at the very highest end of the 2015-2020 seasonal norm for this time of year, nor that Europe’s ‘recovery’ in industrial gas demand — such that it is — was more than offset by lower heating and power sector gas demand in Q1’24. Nor does it seem to matter that temporary LNG supply disruptions over the first quarter period are just that — temporary. US LNG feed gas volumes are already picking up again after a sharp downturn over December-April, and Gorgon won’t stay offline forever. So, how should we reconcile the bullish price narrative with facts on the ground? This week’s EU LNG Chart Deck seeks to do just that, with the usual smorgasbord of original *Energy Flux* charts visualising prompt and forward prices, inter-basin differentials, calendar spreads and much more. Let’s jump in. ###### ***Article stats: 2,500 words, 11-min reading time, 13 charts and graphs*** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Data centres vs US LNG URL: https://www.energyflux.news/data-centres-vs-us-lng-america-gas-power-demand/ Last updated: 2025-06-17T10:09:14.000Z [Subscribe now](https://www.energyflux.news/subscribe) **Can the United States produce enough cheap natural gas to service both the coming new wave of liquefied natural gas (LNG) export projects *and* an anticipated explosion in data centre power demand?** With US shale producers [throttling production](https://www.energyflux.news/p/trouble-with-dirt-cheap-shale-gas-lng-us-europe) due to a *lack* of demand and flatlining prices, this might seem like an odd question. To be clear, there is no credible risk of physical gas shortages arising from either LNG exports or power generation this side of 2030. But if bullish forecasts of an AI-fuelled power demand surge prove accurate, there’s every chance of wholesale gas prices on Henry Hub creeping materially higher in the next few quarters. And as readers of *Energy Flux* will know all too well, the ongoing global buildout of new LNG supply projects is [depressing futures prices](https://www.energyflux.news/p/the-asian-lng-glut-is-here-oil-gas-price-trade) in major LNG-importing regions. US LNG margins have fallen sharply from 2022 highs as Europe recovered from the loss of Russian gas, but ultra-cheap shale gas keeps cargoes in the money. The American gas industry is getting excited about a proliferation of data centres driving demand for gas-fired electricity. Could this inflate the cost of feed gas to the point that US LNG exports become uneconomic in structurally oversupplied global markets? Let’s find out! ###### ***Article stats: 3,000 words, 14-min reading time, 10 charts and graphs*** [Refer a friend](https://www.energyflux.news/leaderboard) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Has EU LNG demand peaked? URL: https://www.energyflux.news/eu-lng-demand-has-peaked-gas-energy/ Last updated: 2025-06-17T10:09:42.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/bcfd546d-6cbe-4fc2-91f2-30ffa07eaea3_1349x445.png) **European Union gas demand is falling so fast that the bloc could be over-contracted with liquefied natural gas (LNG) by 2027\. That was the main conclusion of a notable report from ACER, the EU’s energy regulatory agency. Cue celebratory remarks from several NGOs and other proponents of rapid decarbonisation.** [Subscribe now](https://www.energyflux.news/subscribe) ACER’s assertion came with a big caveat: EU gas demand would need to fall by 25% in less than three years, in line with the REPowerEU plan. What certainty is there that this milestone will be achieved? Very little, judging by progress against the plan’s various targets. Of the five pillars of REPowerEU, only two are on track — meaning gas will be needed to bridge the gap. As the marginal fuel source, LNG is highly likely to be the go-to source to meet any failure to deliver. But that’s not to say the outlook is rosy for gas and LNG demand in Europe. Quite the opposite: wind and solar installations are still breaking records, even if deployment rates fall short of ambition. The upshot is that EU LNG demand will probably be lower in 2027 than today — raising tricky questions both for suppliers at the higher end of the cost curve and for investors in new regasification capacity. This week’s **EU LNG Chart Deck** takes stock of the EU’s highly ambitious renewables and energy efficiency drive, in the context of recent gas and LNG price movements in April, an eventful month in the markets. ###### ***Article stats: 1,900 words, 9-min reading time, 13 charts & graphs*** Energy Flux is a reader-supported publication. To receive new posts and support independent energy market analysis, please consider becoming a free or paid subscriber. _This post is for subscribers on the Chart Deck and Premium tiers only._ ### War, peace and energy in the land of fire URL: https://www.energyflux.news/green-energy-corridor-azerbaijan-gas-war-peace/ Last updated: 2025-06-17T10:10:03.000Z **They say that peace and prosperity go hand in hand. But Azerbaijan, the small South Caucasus country transformed by Caspian oil riches, proves you can have one without the other.** [Subscribe now](https://www.energyflux.news/subscribe) An influx of petrodollars since the early 2000s propelled Azerbaijan from post-Soviet backwater into a regional economic and military powerhouse. Azerbaijan’s armed forces decimated neighbouring Armenia in a series of stunning and decisive offensives between 2020 and 2023 that reasserted Baku’s control over the Nagorno-Karabakh region and occupied territories. The two countries are technically still at war, although the Azeri people want to believe otherwise. Azerbaijan’s battlefield successes “settled” the issue, residents of Baku will impress upon you. Ilham Aliyev, Azerbaijan’s autocratic president, says the warring nations are “closer to peace than ever before” — a wishful line parroted by charming Azeri politicians in Azerbaijan’s chic and ostentatious capital. Oil wealth oozes from every corner of the city. Glass-fronted skyscrapers soar over an immaculate Caspian seaside boulevard dotted with enticing Persian-Anatolian eateries. The picturesque cobbled streets of the painstakingly restored old town send a very clear message: energy trade brings wealth, power and regional dominance. For Armenia, the situation is dire. Aside from so much else, the decades-long conflict cost Armenia the opportunity to become a transit country for Caspian hydrocarbons. Lucrative transit fees instead went to Georgia and Turkey, leaving Armenia economically isolated. Politically too the country is adrift after being abandoned by long-time ally Russia. [Subscribe now](https://www.energyflux.news/subscribe) Now, Azerbaijan’s upcoming presidency of COP29 is throwing a spotlight on the South Caucasus and its untapped renewables potential. Ministers in Baku want to promote the idea of a ‘green peace corridor’ — an electricity interconnector that unites feuding neighbours around a shared undertaking: to export pan-Caucasian wind and solar power to premium markets in Europe. European leaders are keen on the idea. Green infrastructure that forges an enduring peace deal while diversifying European energy sources and decarbonising coal-heavy Balkan power grids is a win-win-win. But there’s a catch: cross-border cooperation and investment won’t happen without a lasting diplomatic accord between Baku and the Armenian capital of Yerevan. [Refer a friend](https://www.energyflux.news/leaderboard) This is a region still processing the harrowing fallout from decades of failed diplomacy and armed conflict. Armenia last week [alleged](https://www.msn.com/en-my/news/world/armenia-claims-azerbaijan-completed-ethnic-cleansing-in-nagorno-karabakh/ar-BB1lIqRc?ref=energyflux.news) Azerbaijan undertook “ethnic cleansing” and destroyed Armenian [cultural heritage](https://www.panorama.am/en/news/2024/04/19/destruction-church-Shushi/2991847?ref=energyflux.news) in Nagorno-Karabakh. Baku says Armenia’s 30-year occupation of territories on the Iranian border left the region contaminated with mines and toxic pollutants. Both sides accused each other of [violating](https://www.azatutyun.am/a/32893685.html?ref=energyflux.news) the terms of a ceasefire agreement during a cross-border skirmish in early April, prompting G7 leaders to [weigh in](https://news.az/news/g7-countries-urge-azerbaijan-armenia-to-remain-committed-to-peace-process?ref=energyflux.news). Against this backdrop, what chance is there that the distant promise of green export riches will focus minds at heated peace talks? Zoom out, and the picture becomes more nuanced. Azerbaijan might have won the war, but it still needs to cooperate with Armenia to win the peace — and there are some [encouraging signs](https://www.msn.com/en-gb/news/world/foes-azerbaijan-and-armenia-agree-historic-return-of-villages/ar-AA1njD7B?ref=energyflux.news) on that front. In parallel, the COP29 host is embracing renewables to diversify its fossil fuel-reliant economy and free up natural gas for export. An initial 2 GW of wind and solar is due online by 2027, but expansion beyond that requires access to premium export markets — and Armenia, to an extent, stands between them. Looking wider still, Azerbaijan and Armenia sit at the gateway between east and west. An enduring peace settlement could open a vital new trade corridor between energy-poor Europe and energy-rich landlocked Central Asia. With war raging in Ukraine, nations on both sides of the gateway are keen to unlock the opportunity — putting the issue of Azerbaijan-Armenia relations at the heart of geostrategic Eurasian energy and climate considerations. [Subscribe now](https://www.energyflux.news/subscribe) When it comes to energy geopolitics, the South Caucasus is one of the world’s most complex regions to unpick. This (rather long) special dispatch from Baku analyses the oil, gas and renewables outlook for Azerbaijan, and the sensitivities of developing energy flows across borders still bristling with tension. The region tends to fly under the radar of energy observers, but high-stakes peace talks could determine the energy future of the South Caucasus and, by extension, Europe. Here’s an overview of the article structure and main themes: - Pain-points along the peace powerline - Tensions in Zangazur, the key Caucasian trade corridor - Baku’s green dream crimped by the grid - Renewables force the market reform issue - Caspian wind exports — electrons or molecules? - Is Azerbaijan facing a gas crunch? - Caspian oil’s last hurrah - Trans-Caspian connection, with a green twist - Resurrecting the old Silk Road to blaze a trail to Baku - Time for another Caucasian energy infrastructure miracle *Researching this article involved six flights over two weeks of travel, many hours of interviews, reams of notes and a fair bit of data wrangling. To gain access, please consider taking out a paid subscription and support independent energy journalism* ###### **Article stats: 4,200 words, 20-min reading time, 12 charts, graphics, videos & photos** [Refer a friend](https://www.energyflux.news/leaderboard) _This post is for subscribers on the Deep Dives and Premium tiers only._ ### From Baku with love 💔 URL: https://www.energyflux.news/from-baku-with-love/ Last updated: 2025-06-17T10:10:45.000Z [Subscribe now](https://www.energyflux.news/subscribe) I’m back in Baku after an intense four-day tour that took us along the length of Azerbaijan — from Baku to Nagorno-Karabakh via the liberated territories in south-west Azerbaijan. I had hoped to write up copy while on the road, but the intensity of the schedule rendered that impossible. I’ve been transit from dawn till dusk since Sunday, visiting a plethora of energy sites and meeting a host of interesting people along the way. I feel like I’ve been travelling for four weeks. I have a notebook full of shorthand, hundreds of photos and almost as many ideas for stories to tell about this fascinating country. The energy and geopolitical situation in the South Caucasus is undergoing profound and rapid change, which will have a direct bearing on Europe’s energy future. I fly back to London tonight and will spend the following few days feverishly writing up the enduring narratives that define the South Caucasus energy story in 2024\. Until then, I’ll leave you with a few photos and videoclips from the trip (best viewed [on the website](https://www.energyflux.news/p/from-baku-with-love) in a desktop browser). A depiction of an oil gusher in the energy museum at state oil company SOCAR’s headquarters in Baku. They are very proud of their historic gushers, but Azerbaijan’s oil production is now about to plateau: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/383487c6-12d3-4191-9373-78da4c4b2ccc_640x480-2.gif) Unloading fertiliser from Turkmenistan in the Port of Baku. Plans are afoot to expand this tiny port to handle huge Chinese wind turbine blades for installation at future wind farms in the region: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a94ce447-5985-454d-98b2-39a8011a48a4_4032x3024-jpeg.jpg) Kamran Huseynov, deputy director of Azerbaijan’s state renewable energy agency, at Masdar’s 230MW Garadagh solar PV plant. He provided a huge amount of insight into the complexities of exploiting Azerbaijan’s vast renewables potential: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/27bf4865-e4a6-4da3-b092-ab9ffd32c902_4032x3024-jpeg.jpg) Speeding past nodding donkeys outside Baku. The landscape is littered with ancient oil derricks: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/fc703ad3-961e-4936-ab91-b23e5941d494_4032x3024-jpeg.jpg) Pit stop for tea. Lots and lots of lovely tea: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/8228aa4b-ad81-4224-8d11-917ba76b9c81_4032x3024-jpeg.jpg) An Archimedes screw at a mini-hydro plant powers the Agali net zero smart village: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/IMG_1619.GIF) Stocking up on Russian oil 😳 ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a0c23123-b1af-48c8-aa5f-e11055fdef76_1544x1158-jpeg.jpg) Grappling with rubbish feedstock at an energy-from-waste plant outside Baku: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/EFW-plant-GIF.gif) A conceptual artwork depicting order from chaos, peace from the rubble, in the stunningly impressive Agali net zero smart village in Azerbaijan’s liberated territories: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/e15a0187-c9d4-4603-a826-b63be4f46f3f_4032x3024-jpeg.jpg) Explaining the extremely risky de-mining operation underway in one of the most heavily mined lands in the world
 ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/52ee9bb0-3ad3-49f3-af81-43cfe71fc91c_4032x3024-jpeg.jpg) 
including a live detonation of an unexploded anti-tank missile discovered during the de-mining operation: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/Explosion-CLIP.gif) Two Francis turbines at one of 27 (!) brand new hydro facilities with a combined capacity of 222MW built by Azer Energy since 2020 (!!!): ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/06/Francis-turbine-CLIP.gif) Elnur Soltanov, deputy energy minister and COP29 chief executive, meets *Energy Flux* in Baku. He provided a surprisingly frank and honest assessment of the challenges facing Azerbaijan’s presidency of the upcoming COP29 climate talks: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/e7b4e6aa-970d-4329-9ed9-5df3a7832070_3024x1932-jpeg.jpg) Oil gathering pipelines that pump crude from upstream wells and towards one of Azerbaijan’s three main oil export pipelines. Baku’s wealth and military firepower — which proved decisive in the Nagorno-Karabakh conflict — are funded almost entirely by oil exports: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/561ebdbf-9488-4d3e-a98c-affa7c7d1152_4032x3024-jpeg.jpg) That’s it for now. Stay tuned for the full writeup
 — Seb Thank you for reading *Energy Flux.* This post is public so feel free to share it. ### Reporting from the Land of Fire đŸ”„ URL: https://www.energyflux.news/reporting-from-the-land-of-fire/ Last updated: 2025-05-14T15:03:14.000Z I’m going to Azerbaijan — the Caspian keystone in Europe’s energy mosaic _This post is for paying subscribers only._ ### The trouble with dirt-cheap shale gas URL: https://www.energyflux.news/trouble-with-dirt-cheap-shale-gas-lng-us-europe/ Last updated: 2025-06-17T10:11:25.000Z **Oil and gas prices are diverging, which poses a problem for American shale producers — and, by extension, exporters of US liquefied natural gas (LNG).** [Subscribe now](https://www.energyflux.news/subscribe) Brent crude is flirting with $90/barrel and West Texas Intermediate (WTI), the US crude benchmark, is above $85/barrel. Both are up by almost 20% since the start of the year on production cuts by the Organization of the Petroleum Exporting Countries (OPEC) cartel, as well as [Houthi attacks on ships in the Red Sea](https://www.energyflux.news/p/lng-cost-geopolitics-red-sea-trade-gas) and from Ukrainian drone strikes on Russian oil infrastructure. But prices on Henry Hub, the US natural gas benchmark in Louisiana, have fallen by more than a quarter so far in 2024, primarily due to an overhang of storage on the back of weak winter demand. “US gas balances remain oversupplied, with Lower 48 storage levels 23% higher than in 2023 and 38% higher than the five-year average as the market enters the non-peak season for gas,” Rystad said in a note on 10 April. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d569f6b4-fa7f-42d3-97c1-587931df1928_4294x2121.png) [Get 7 day free trial](https://www.energyflux.news/subscribe) Until recently, this divergence would not be an issue as upstream operators focussed primarily on oil production. Oil is a more lucrative commodity and tends to have higher value per unit compared to natural gas, so a rising oil price would stimulate more drilling. But changes in the gas-to-oil ratio (GOR), as well as new environmental regulations, are making the economic calculus more complicated for US shale producers. The upshot is a looming market failure that is depressing natural gas production growth on the eve of an unprecedented increase in US LNG export capacity. [Refer a friend](https://www.energyflux.news/leaderboard) ###### **Article stats:* 2,500 words, 12-min reading time, 6 charts/graphics* _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Schrödinger’s gas crisis URL: https://www.energyflux.news/schrodingers-natural-gas-crisis-energy-ukraine/ Last updated: 2025-06-17T10:14:31.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ed71c44b-e8a0-4294-ba15-940c77f38ffd_1357x435.png) [Refer a friend](https://www.energyflux.news/leaderboard) In quantum mechanics, the principle of ‘superposition’ asserts that a system can exist simultaneously in multiple states until observed. The principle was popularised by Austrian physicist Erwin Schrödinger’s eponymous thought experiment, in which a cat in a box is simultaneously alive and dead. The act of opening the box and observing the cat collapses the quantum superposition into a definite reality. Europe’s gas crisis is in a superposition of being simultaneously completely over and still raging. But unlike Schrödinger’s cat, observing the state of the market does not collapse the superposition into any definite reality: the facts are open to interpretation, and are always changing. The ‘crisis’ of running an industrialised economy on natural gas after depriving it of its primary supply of the fuel never really goes away. Abundant flows of liquefied natural gas (LNG) merely shift the dependency. The market is thus in a state of *permanent superposition*. This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) takes a quantum scalpel to today’s apparently benign market conditions, and explores some of the unobservable risks inherent in Europe’s pivot from Russian pipeline gas to global supplies of LNG. As usual, this post is packed full of charts and looks a lot better on the [website](https://www.energyflux.news/p/schrodingers-natural-gas-crisis-energy-ukraine) (preferably on a desktop browser). Here’s a quick rundown of the chart titles and discussion themes: - **Asia’s demand bump triggers automatic reply from Europe’s liberalised markets** - *TTF futures bounce on Asian LNG rally* - **Keep it in the ground (for next winter)** - *TTF calendar spreads still positive* - **Back to the future of global LNG trade** - *JKM futures jump above TTF on market bifurcation* - **The DQT window is closing** - *The narrowing cost differential of oil-indexed LNG to spot* - **The ‘cat’ is playing dead** - *Norway’s oil/gas trade-off* - *TurkStream goes gangbusters* - *Russia pounds Ukrainian energy infrastructure* - **Conclusion:** *Nothing is ever truly as it seems* **🧠 Energised Minds** —*critical thinking on crucial energy issues* đŸ’„ **More from *Energy Flux*** Now, let’s take a peek inside Schrödinger’s box
 ###### ***Article stats: 2,300 words, 11-min reading time, 12 charts and graphs*** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Golden hour for gas-fired power URL: https://www.energyflux.news/golden-hour-for-gas-fired-power-electricity-coal/ Last updated: 2025-06-17T10:15:15.000Z **Conventional wisdom holds that thermal power generation is under sustained attack in Europe from the energy transition: as zero marginal cost renewables saturate the grid, gas and coal plants face a double-whammy of structurally lower wholesale power prices and reduced running hours. But falling gas and carbon costs have opened a window of opportunity for coal-to-gas switching — and a fundamental change in Europe’s electricity demand profile could extend gas burn well into the 2030s.** [Subscribe now](https://www.energyflux.news/subscribe) Steep declines on European gas hubs have recalibrated the economics of gas-fired electricity. It is now profitable for utilities that operate a portfolio of thermal power plants to wind down coal generation and crank up output from gas. The coal-to-gas switching market of reference is Germany, Europe’s largest economy, which operates a fleet of almost 40 GW of coal and lignite plants and 32 GW of gas — most of which are equipped with combined-cycle gas turbines (CCGTs). Forward prices on the Dutch Title Transfer Facility (TTF), the main gas price-setting hub for north-western Europe, range from €27 to €33 per megawatt-hour ($9-10 per million British thermal units) between now and the end of winter 2025-26\. Analysis by *Energy Flux* shows that CCGTs will remain ahead of coal and lignite power stations in the German merit order for the next two winters if TTF stays below **€33.50/MWh** ($10.62/MMBtu), all else being equal. With a wave of new liquefied natural gas (LNG) supply about to break onto global gas markets, there is every chance of that happening. And to help matters further, the recent slump in the European carbon price below €60 per tonne means that gas power can edge out coal and still remain profitable. If European gas and power futures continue to trade at current levels, the price of CO2 allowances on the European emissions trading system (EU ETS) would need to fall below **€58 per tonne** to prevent high-efficiency coal plants from edging back into merit. Again, markets do not anticipate this happening, meaning gas could undercut coal for the foreseeable future. Energy Flux is funded entirely by its readers. If you value independent market analysis, please consider subscribing. Looking further ahead, electrification offers new opportunities for unabated gas burn. Europe’s drive to electrify vast swathes of the economy, in combination with a sharp increase in power demand from generative artificial intelligence and data centres, will dramatically alter seasonal load profiles in major markets such as Germany — leaving lucrative pockets of unmet peak demand. With the aid of a brand-new slate of spark spread charts, today’s *Energy Flux* dives deep into the shifting economics of European power and carbon markets between now and the end of 2025\. It then takes a longer-term view of power system trajectory, to assess the scope and implications of gas playing a role balancing the renewables-heavy European grids of the post-2030 period. ###### Article stats: 3,000 words, 14-min reading time, 12 original graphs and charts --- _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Japan’s LNG surplus adds to Asian glut URL: https://www.energyflux.news/japan-lng-surplus-asian-glut-natural-gas-trade/ Last updated: 2025-06-17T10:16:26.000Z Utilities must resell more volumes at the worst possible moment _This post is for paying subscribers only._ ### The Asian LNG glut is here URL: https://www.energyflux.news/the-asian-lng-glut-is-here-oil-gas-price-trade/ Last updated: 2025-06-17T10:18:36.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/1eb46d9f-4235-4444-8028-45540773d4e6_1815x553.png) [Subscribe now](https://www.energyflux.news/subscribe) **The first indications of oversupply are manifesting in the Asian market for liquefied natural gas (LNG), triggering a shift in market power from sellers to buyers.** Asian buyers are flexing down the volume of LNG they lift under long-term oil-indexed contracts in order to scoop up much cheaper cargoes in the spot market. This is happening because weak demand is keeping the spot price significantly below LNG contracts that are pegged to the price of crude oil. Analysis by *Energy Flux* shows that **Asian LNG buyers could save as much as $15 million for every oil-indexed cargo they replace** like-for-like in the spot market. The savings come at the expense of sellers. The precise saving depends on the ‘oil slope’ — the formula used to calculate the price of LNG under the contract. This is a percentage of the relevant crude oil price, usually either Brent or Japan Crude Cocktail (JCC). This post analyses the oil-LNG price dynamic, and considers what a spot discount could mean for the balance of global LNG trade over the coming months — and the implications for European energy markets. 🧠 I’ve also reintroduced **Energised Minds** — a section at the end of the newsletter where I highlight a few interesting energy essays, charts and reports on my radar. ***Article stats: 2,000 words, 10-min reading time, 9 original charts & graphs*** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Gas flood sinks canal crisis URL: https://www.energyflux.news/lng-gas-flood-sinks-panama-suez-canal-crisis/ Last updated: 2025-06-17T10:19:09.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/dd948edc-2560-4854-a486-6d93bbeadc9d_1342x401.png) **If ever there was a good time for the LNG industry to confront a shipping crisis, this is it.** Drought and conflict might be triggering simultaneous outages on the [Panama](https://www.energyflux.news/p/the-panama-paradox-us-lng-drought-gas-trade) and [Suez](https://www.energyflux.news/p/lng-cost-geopolitics-red-sea-trade-gas) canals, but prices on key gas and LNG benchmarks remain muted. The market response to loss of passage through two vital waterways has been a shrug of indifference. Why? Low shipping costs. If these chokepoints had become constrained during the extreme market events of 2022, the response would have been quite different. Charter rates peaked at $375,000 per day in October 2022, which would have blown a big hole in [the economics of an 82-day round trip from the US Gulf to Tokyo or Beijing](https://www.energyflux.news/p/lng-gas-suez-panama-canal-conundrum-geopolitics). Today charter rates are languishing at one-tenth of that, so longer voyage times are not impossibly expensive. Weak fundamentals are a bearish factor weighing on shipping costs. European gas stocks are brimming after a mild winter, renewables are squeezing fossils out of the power mix, and demand recovery is at best insipid in both the industrial and heating segments. It’s a similar story in Asia. The difference is that spot LNG has deepened its discount to oil-indexed contracts, which is driving some bargain-hunting — but nothing likely to move the needle on global balances. This week’s [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) reviews recent European and Asian price movements, evolving forward curves and time spreads over the spring, summer and winter months. It also considers the implications of the global LNG fleet failing to optimising in response to ongoing canal transit restrictions. This post is broken into the following sections: 1. **Global gas benchmarks stop the rot** 2. **Flat time spreads dull injection incentive** 3. **‘TTF is going sub-$8’: analysts** 4. **Inter-basin spreads collapse** 5. **Price drop spurs bargain hunters** 6. **Spot discount to oil indexed LNG widens** 7. **Vessel market tightening sooner
** 8. **
but looser market beckons in 2025** 9. **No need to optimise trade flows (yet)** 10. **Curious vessel movements — the exception that proves the rule** 11. **Conclusion: crisis averted, opportunity squandered** Be sure to enable images or, better still, read this post on the [website](https://www.energyflux.news/p/lng-gas-flood-sinks-panama-suez-canal-crisis). ###### **Article stats: 2,400 words, 11-min reading time, 12 original charts, graphs and maps** [Refer a friend](https://www.energyflux.news/leaderboard) _This post is for subscribers on the Chart Deck and Premium tiers only._ ### LNG’s canal conundrum URL: https://www.energyflux.news/lng-gas-suez-panama-canal-conundrum-geopolitics/ Last updated: 2025-06-17T10:19:42.000Z **Transit constraints have arisen simultaneously on both the Suez and Panama Canals. This unlikely situation is forcing liquefied natural gas exporters to take much longer journeys to reach markets on the other side of the world. Freight rates are currently low but set to rise later this year, raising the question: if both canals remain inaccessible for months on end, will long-distance LNG trade be rendered economically unviable?** [Subscribe now](https://www.energyflux.news/subscribe) In an attempt to answer this question, *Energy Flux* modelled the higher costs of shipping US and Qatari LNG around Africa’s Cape of Good Hope to Europe and Asia, respectively, in various scenarios. The main conclusion is that, while canal impacts are currently manageable, **inter-basin shipping costs could easily triple or quadruple if canal trade routes remain off-limits until the second half of the year** – when futures markets anticipate a tightening in the LNG shipping market. If inter-basin trade continues in spite of higher shipping costs, this could exert a multiplier effect on delivered prices — to the detriment of consumers and exporters alike. Equally, the situation could ‘kettle’ cargoes within the basin of origin, shortening journeys and depressing costs — meaning lower prices and fewer emissions. The latter is more likely than the former, but LNG trade is not as flexible or efficient as other commodities. The ability of market players to optimise in the face of sudden new obstacles is limited by contractual (and other) limitations. As explored in recent posts, the de-facto [closure of the Suez Canal](https://www.energyflux.news/p/lng-cost-geopolitics-red-sea-trade-gas) is hurting the profitability of Qatari LNG in Europe. At the same time, [Panama Canal restrictions](https://www.energyflux.news/p/the-panama-paradox-us-lng-drought-gas-trade) could put Asian markets out of reach of American LNG exporters in the coming months. Today’s post analyses how this situation is affecting the main cost factors of LNG shipping. [Refer a friend](https://www.energyflux.news/leaderboard) Modelling by *Energy Flux* shows that **shipping costs increase in a non-linear fashion when LNG is traded over longer distances** (i.e. between oceanic basins) and vessels speed up to minimise delays. Conversely, the localisation (or ‘basinisation’) of trade would keep costs low, while decoupling European gas and Asian LNG benchmarks – introducing an entirely new set of trade, price and arbitrage dynamics. This deep-dive breaks down the main cost components of shipping LNG to Europe and Asia from the US and Qatar under various scenarios, while contemplating the different ways that this situation might evolve – and the implications for gas consumers in major LNG importing regions. All of this is supported by a new set of bespoke charts and graphs designed help to decipher the complex inter-related factors at play, in the hope of improving understanding of how the global LNG market is being contorted and what might happen over the coming months. [Subscribe now](https://www.energyflux.news/subscribe) ## Setting the scene The three largest cost components of LNG shipping are: i) charter rates ii) fuel costs and iii) canal fees. In Europe, there’s a fourth dimension: carbon liabilities (more on this below). Other costs, such as brokerage fees, insurance and port costs don’t really move the needle so are excluded from this analysis.[1](#footnote-1) The modelling focusses on supplying LNG to Europe and Asia via different canal- and non-canal routes. Five scenarios (Europe #1-5 and Asia #1-5) were created for each region, based on LNG supply originating from the US Gulf Coast and from Qatar. The scenarios vary by route, speed, charter rate and carbon price. For full disclosure, the data inputs and assumptions are all listed out in this table (click to enlarge, or squint): ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/65faa657-4e5b-4c9b-83b8-20f55a1c1cab_3061x468.png) And here are a couple of maps showing each route/scenario modelled for supplying LNG to Europe and Asia: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/5034c07f-c67f-46fd-bbca-5e1ac3da937d_1399x808.png) European LNG supply routes for each scenario. Map by Maritime Optima (amended). Red = war/high-risk areas ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/26466d9e-8f0a-4bab-bfcb-2201270351f7_1297x649.png) Asian LNG supply routes for each scenario. Map by Maritime Optima (amended). Red = war/high-risk areas [Get 10% off a group subscription](https://www.energyflux.news/subscribe) Now, let’s visualise how each of those cost variables changes under each scenario, and then stack them all together to get a holistic view of non-canal LNG shipping costs. Spoiler alert: **the delta between #1 and #5 is *huge*, but the probability of occurrence diminishes the further you move up the cost curve.** ###### ***Article stats: 2,500 words / 12-min reading time / 8 original charts and graphs*** _This post is for subscribers on the Deep Dives and Premium tiers only._ ### The Panama paradox URL: https://www.energyflux.news/the-panama-paradox-us-lng-drought-gas-trade/ Last updated: 2025-06-17T10:20:31.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d113cca3-bb85-4ca4-a318-10fb8415ac8a_1363x397.png) **An unprecedented drought on the Panama Canal is forcing American liquefied natural gas exporters to take a much longer route to Asia. Modelling by *Energy Flux* reveals that the profitability of US LNG cargoes drops by 20% or more once the extra cost of shipping via southernmost Africa is factored in — erasing gains from delivering the fuel to ‘premium’ Asian markets. US exporters must either swallow higher Asia shipping costs, or send volumes to Europe — where brimming storage and sluggish demand recovery is depressing hub prices.** Being a seaborne fuel, LNG is exposed to transit risks on oceanic trade pinch-points. The Panama Canal Authority last year almost halved traffic on the waterway to preserve water in depleted reservoirs used to fill the canal’s enormous lock pounds. The authority recently confirmed restrictions will remain until the (anticipated) start of the rainy season in April. Until then, only 24 transits are permitted per day compared to the usual 38-40 — and full ‘normalisation’ might not return [until 2025](https://menafn.com/1107848983/Canal-Will-Restrict-Daily-Transits-To-24-At-Least-Until-April?ref=energyflux.news). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2fd21b2c-b8c0-44aa-b926-87e6162e6b47_834x412-jpeg.jpg) US LNG: Stuck in the Atlantic with EU, or on a slow boat to China? Source: [Alex Froley, LinkedIn](https://www.linkedin.com/posts/alex-froley%5Fmap-of-us-origin-lng-tankers-from-icis-lng-activity-7161691349962989569-dP6N?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop) Cryogenically frozen LNG boils off in transit, so waiting weeks for a canal slot implies an unacceptable loss of cargo. Moreover, the profitability of uncontracted LNG is diminishing as spot markets soften amid persistently weak near-term fundamentals. With European gas hubs virtually in freefall, Asia now offers a significant premium for uncontracted ‘spot’ LNG. But the Panama restrictions and cost of shipping via southern Africa make these markets much harder to reach. The dent on profits is large enough to erase the ‘Asian premium’ between August and December this year. The upshot is that European importers might find they are inundated with US LNG cargoes that would otherwise go to China, Japan or South Korea, allowing them to stock up cheaply in time for next winter. This would help offset any lost or delayed supplies of Middle Eastern LNG in Europe arising from the de-facto closure of the Suez Canal due to Red Sea insecurity, as explored in the [last week’s Deep Dive](https://www.energyflux.news/p/lng-cost-geopolitics-red-sea-trade-gas). With the aid of several new charts and graphs, this EU LNG Chart Deck analyses US LNG netbacks (profits) in Asia over the next 12 months via Africa versus the conventional Panama route, and compares these to the profitability of selling into north-west Europe. The findings are striking. This week’s post also peers further ahead to 2026-27\. Markets are now pricing in a convergence in US LNG delivered costs and European hub prices at this time, when the coming LNG glut will be in full effect. This reality casts in a new light Shell’s latest LNG Outlook — which few observers realise actually paints a more bearish picture of LNG demand growth out to 2040 than any oil major had publicly acknowledged until now. Ready? *VĂĄmonos!* ###### ***Article stats: 2270 words, 11-min reading time, 7 original Energy Flux charts/graphs*** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### The cost of geopolitics URL: https://www.energyflux.news/lng-cost-geopolitics-red-sea-trade-gas/ Last updated: 2025-06-17T10:21:02.000Z **The Red Sea shipping crisis is forcing Qatar, the world’s cheapest liquefied natural gas producer, to take a much longer (and safer) route to Europe. Analysis by *Energy Flux* shows that the profitability of Qatari LNG cargoes delivered to Europe drops by as much as one-third once the extra cost of shipping around Africa’s Cape of Good Hope is factored in – making Europe a far less attractive destination for Qatari exports compared to most, if not all, Asian markets.** QatarEnergy began rescheduling European deliveries after suspending shipments through the Red Sea in mid-January. The resultant delays prompted Italian LNG buyers such as Edison and ENI to seek alternative cargoes in the spot market to plug the gap.[1](#footnote-1) As explored in [last week’s EU LNG Chart Deck](https://www.energyflux.news/p/pause-for-thought-biden-gas-lng), spot LNG is now cheaper than most oil-indexed contracts, so in the immediate term Qatar’s European importers such as Italy could make big savings by replacing delayed cargoes in the spot market. However, the fallout from the Red Sea shipping crisis is not limited to the price paid by European buyers in the coming months. It could also influence where future shipments of Qatari LNG end up, in light of the country’s mammoth LNG expansion project. There is no clear path to a quick cessation of hostilities deterring LNG vessels from the Red Sea. If safe passage is not restored this year, the situation could bleed into the start of a new era for Qatari LNG: one defined by overcapacity. Qatar is facing a large increase in its uncontracted liquefaction capacity as contracts expire and its huge North Field LNG expansion projects come online in the Persian Gulf (as well as the Golden Pass project in the US). This deep-dive explores how the economics of LNG trade in Europe are shifting in light of the Red Sea stoppage — both in the immediate term (spot versus oil-indexed LNG) and over a longer time horizon (Qatar’s approach to marketing spare volumes). The post also analyses the comparative profitability of shipping Qatar’s unbeatably cheap LNG to Italy versus India and China, and considers how things would pan out if Red Sea tensions were to flare up during a future period of gas market tightness — when Qatar’s spare capacity would be in strong demand. Let’s get stuck in. ###### ***Article stats: 2,300 words, 11-min reading time, 4 original charts / graphs*** _This post is for subscribers on the Deep Dives and Premium tiers only._ ### Pause for the cause URL: https://www.energyflux.news/pause-for-thought-biden-gas-lng/ Last updated: 2025-06-17T10:21:27.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/71d3975e-a4e0-4351-a417-1c6fbe06b72f_1388x407.png) **Much has been said about the Biden administration’s snap decision to pause LNG export approvals to countries without a US free trade agreement. While the policy would probably be rescinded if Donald Trump prevails at the polls in November, there are many angles to consider. This post weighs up what it could all mean for European energy security and the decarbonisation agenda.** But first, it’s been a long time since the last [EU LNG Chart Deck](https://www.energyflux.news/t/chart-deck) and a catch-up is overdue. This post is broken into the following sections: 1. **Europe coasts through winter** 2. **Geopolitics benefit Asian buyers** 3. **Netbacks narrow, pinch-points tighten** 4. **Spot LNG hits price inflection** 5. **Squinting at US LNG margins** 6. **LNG pause prompts furore** 7. **Winners, losers and electioneering** There’s a lot to cram in, so this email is a bit longer than usual and might be truncated by your email client. For an optimal reading experience, [click here](https://www.energyflux.news/p/pause-for-thought-biden-gas-lng) for the online version. OK, let’s get stuck in đŸ’„ ###### **Article stats: 2,600 words, 12-min reading time, 11 original charts/graphs** _This post is for subscribers on the Chart Deck and Premium tiers only._ ### Redefining đŸ’„Energy FluxđŸ’„ URL: https://www.energyflux.news/redefining-energy-flux/ Last updated: 2025-05-14T15:03:49.000Z *I’ve been on the road since the New Year, but eagerly anticipating the restart of* Energy Flux *in 2024\. This email covers a lot of ground about the paywall, subscriptions, referrals, and the newsletter’s editorial remit. Regular posts resume next week.* ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/130a3a3f-a5bf-4ab4-bc1e-f371803fc520_1495x925.png) *Me working late, according to AI* Energy Flux *has evolved a fair bit since it was born way back in July 2020 as a personal blog. It started with a very broad remit, but after much experimentation and reflection, I’ve boiled it down to this: *to analyse global natural gas markets through the lens of Europe’s net-zero journey*.* *I have updated the* [*‘About’ page*](https://www.energyflux.news/about) *with a Q&A that explains in more detail my rationale for this focus, and what subscribers can expect. Ahead of the restart of the weekly publication cycle, I am sending out this refreshed definition to all readers. Scroll to the end to read the text in full.* *As previously flagged, I’m making some important changes:* - *Most posts will be paywalled from now on* - *The* [*web archive*](https://www.energyflux.news/archive) *is now behind the paywall (with the exception of a few* [*free posts*](https://www.energyflux.news/t/free-posts)*)* - *The rate for new subscriptions is set out* [*here*](https://www.energyflux.news/subscribe) - *There’s also a* [*group discount*](https://www.energyflux.news/subscribe?group=true) *(refresh the Subscribe page if it doesn’t appear first time)* - *I’m starting a* [*referral programme*](https://www.energyflux.news/leaderboard) *that gives complimentary access in exchange for new readers (more on this below)* - *If you’re an existing paid subscriber, you already have full access* *As a token of my immense gratitude to those paid readers who continued to support* Energy Flux *over the past year or more, your legacy subscription rate is frozen in perpetuity (and for the same reason I am not offering promotional discounts).* [Subscribe now](https://www.energyflux.news/subscribe) ## Refer friends, read for free *I’ll be honest: I don’t like the paywall. It slows the growth of the email list and makes* Energy Flux *inaccessible to many readers. But the newsletter needs to generate enough revenue to make it a worthwhile endeavour. The referral programme fixes this.* *As I understand it, the readership breaks down into two core segments: those who read for professional purposes, and those who read for pleasure (hopefully there’s a fair bit of overlap too).* *Those in the ‘professional readership’ camp who would like full access are encouraged to take out a paid subscription and pass the expense on to their employer.* *For those without a corporate subscriptions budget, I acknowledge that paying the full rate might be hard to justify. For this reason, I have set the referral tiers deliberately low so that it is easy to gain complimentary access:* - *Get a 1 month comp for 2 referrals* - *Get a 6 month comp for 6 referrals* - *Get a 12 month comp for 10 referrals* *These tiers are well below the Substack default. Here’s how to participate:* *When you use the referral link below, or the ‘Share’ button on any post, you'll get credit for any new subscribers (free or paid). Simply send the link in a text, email, or share it on social media with your network. When more friends and colleagues use your referral link to sign up, you’ll receive the benefits listed above.* [Refer a friend](https://www.energyflux.news/leaderboard) *The* [*Leaderboard page*](https://www.energyflux.news/leaderboard) *will list the top referrers (it’s currently empty because I’ve only just enabled referrals).* ## Let’s talk! *If you are not able to hit the referral tiers and cannot afford a subscription, please get in touch to discuss a bespoke arrangement that fits your budget (*[*click here*](mailto:seb@energyflux.news) *or hit reply to this email).* *I am also happy to manage corporate accounts via annual invoicing, and add groups of readers to the paid list manually. This avoids Substack and Stripe fees, allowing me to pass the savings on (two large organisations have already done this). Again, please* [*get in touch*](mailto:seb@energyflux.news) *to discuss.* *Moreover, I love hearing from readers. I’ve learned a huge amount from the many smart folks on the list over the years. Feel free to reply to any email to share your thoughts in private, or leave a public comment if you’re a paid subscriber.* *As ever, thank you to everyone for reading* Energy Flux. *The newsletter would not exist without you.* *— Seb* *P.S. Read on for the ‘About’ Q&A
* [Subscribe now](https://www.energyflux.news/subscribe) [Leave a comment](#ghost-comments-root) --- ## What is *Energy Flux*? Welcome to *Energy Flux* – the newsletter that analyses global natural gas markets, energy economics and geopolitics through the lens of Europe’s net-zero journey. *Energy Flux* is written by me, [Seb Kennedy](https://www.linkedin.com/in/sebkennedy/?ref=energyflux.news), to raise awareness of how gas markets work – and to analyse the significance of big movements in wholesale gas and LNG (liquefied natural gas) prices. ## Who is it for? Anyone whose personal or professional interests overlap with the European energy transition, or who wants a better understanding of the role of gas in a volatile, decarbonising world. Investors, energy companies, think-tanks, NGOs, legal firms and policymakers are the main recipients – but the audience is diverse and some of the most avid readers are curious individuals or energy aficionados without professional ties to this space. It’s a broad readership and everyone is welcome. ## Why gas? For better or worse, gas and LNG are still a pillar of the European energy system. Natural gas is both the hero and the villain of Europe’s energy transition, literally keeping the lights on when renewables fall short but at significant economic and environmental cost. The economics of gas shot up the political agenda following Russia’s full invasion of Ukraine in 2022\. Europe’s pivot to LNG triggered intense price volatility that sent shockwaves through global energy markets and squeezed consumers in all gas-reliant segments of the economy. As the marginal generator, gas typically sets the power price. With Europe now leaning more heavily on LNG, understanding global LNG market dynamics is essential to understanding the economics of zero marginal cost generators (renewables and nuclear) in most western European electricity markets. For upstream producers, there is a strong incentive to gain exposure to global LNG markets. But gas-producing countries often find that embracing LNG exports means importing higher prices. Gobbling up the arbitrage in the quest for bigger upstream margins comes at the expense of consumers – with potential for political consequences. The volume of gas traded as LNG overtook that of pipeline gas in 2021, and the gap will only widen. Yet this crucial fuel is poorly understood: price formation lacks transparency, trade dynamics are clunky and LNG contracts are opaque, to say the least. *Energy Flux* exists to shed light on these murky niches of the energy system, and to make sense of what’s driving market sentiment. ## Who are you? I am a freelance energy journalist and market analyst using data to carve out engaging narratives about the economics of decarbonisation. I’ve been writing about energy since 2008, when I started as a cub reporter on the UK renewables beat. Since then I have written for a variety of trade publications and consultancies about oil and gas, LNG, hydrogen, energy geopolitics, market design/regulation and climate policy in international markets. Check out my LinkedIn bio [here](https://www.linkedin.com/in/sebkennedy/?ref=energyflux.news). ## What’s your agenda? *Energy Flux* is 100% editorially independent. It is funded entirely by paying subscribers, which allows me to provide unbiased coverage of energy market developments. That said, I do have opinions and these shape my writing. I support efforts to reduce Europe’s dependence on gas and LNG where cheaper and cleaner alternatives exist. Demand reduction and energy efficiency are among the most powerful tools in the climate policy box. Over-reliance on LNG unduly exposes consumers to market volatility and (geo)political machinations in faraway places, while undermining European climate policies and energy security. It also renders the fuel unaffordable in emerging markets that are pursuing coal-based industrialisation pathways – markets where LNG might otherwise help reduce emissions.[1](#footnote-1) I seek to balance that position with an explicit acknowledgement of the importance of gas to European prosperity and industrial productivity. If gas and LNG supplies are constrained too quickly in the name of climate action, emissions could spike and much of Europe (as well as other regions) could even be plunged into turmoil. My aim in writing *Energy Flux* is to bring nuance and clarity to the debate on the role of natural gas in Europe’s energy transition, while questioning the prevailing narrative that decarbonisation will support LNG demand growth for decades to come. ## Why subscribe? Paid subscribers will receive on average one newsletter per week, usually on Monday morning UK time. These weekly posts alternate between: - The [**EU LNG Chart Deck**](https://www.energyflux.news/t/chart-deck) – a datavis-heavy analysis of recent gas and LNG price movements (e.g. JKM-TTF spreads, freight costs, US LNG netbacks, EU spark/dark spreads) - Occasional [**Deep Dives**](https://www.energyflux.news/t/deep-dive) – longer text-based essays that explore under-reported themes in gas, LNG and the wider energy system. ‘Free’ readers will receive paywalled previews of premium content, and the odd free post. For full access and to leave comments, take out a paid subscription – and support independent energy journalism 😇 [Subscribe now](https://www.energyflux.news/subscribe) If you enjoy the content but can’t afford a full subscription, please [get in touch](mailto:seb@energyflux.news) to arrange a bespoke plan. Alternatively, you can gain complimentary access by participating in the referral programme. [Refer a friend](https://www.energyflux.news/leaderboard) I am also happy to manage corporate accounts personally via annual invoicing. Again, please [get in touch](mailto:seb@energyflux.news) to discuss this. ## A small caveat Family demands and travel will occasionally disrupt the publication cadence. I will always give paid subscribers notice of upcoming breaks to the schedule, and will seek to make up for any ‘missing’ posts throughout the year. I usually [pause billing](https://support.substack.com/hc/en-us/articles/360041618252-Can-I-pause-my-publication-) if there is likely to be a gap of a few weeks or more. We all need periodic downtime, but fair’s fair. **Seb Kennedy | Energy Flux | January 2024** --- 1. *Depending on the lifecycle methane and carbon footprint of LNG. For example, recent [research](https://www.energy.gov/sites/default/files/2023-12/Ex.%2016.%20Howarth%5FLNG%5Fassessment%5Fpreprint%5Farchived%5F2023-1103.pdf?ref=energyflux.news) calls into question the climate benefits of US LNG over coal.* [↩](#footnote-anchor-1 "Jump back to footnote 1 in the text.") ### What might global LNG trade look like in 2024? URL: https://www.energyflux.news/eu-natural-gas-lng-trade-geopolitics-prices-2024/ Last updated: 2025-06-17T10:22:15.000Z The outlook is bearish, but the only certainty is uncertainty | EU LNG chart deck: 11-29 Dec 2023 _This post is for subscribers on the Chart Deck and Premium tiers only._ ### 2023 in review URL: https://www.energyflux.news/2023-in-review/ Last updated: 2025-05-14T15:03:53.000Z And a look ahead to next year in Energy Flux _This post is for paying subscribers only._ ### Russia’s stunted LNG coup URL: https://www.energyflux.news/russia-coup-arctic-lng-2-sanctions-natural-gas/ Last updated: 2025-06-17T10:23:51.000Z DEEP DIVE: Novatek has defied sanctions against Arctic LNG-2, but is the achievement merely symbolic? _This post is for subscribers on the Deep Dives and Premium tiers only._ ### REPOST: ❄Frozen out of a warming ArcticđŸ”„ URL: https://www.energyflux.news/repost-frozen-out-of-a-warming-arctic/ Last updated: 2025-05-14T15:03:57.000Z DEEP DIVE: Is Russia losing its grip on Arctic energy resources? _This post is for paying subscribers only._ ### The rise of the middlemen URL: https://www.energyflux.news/rise-of-lng-middlemen-traders/ Last updated: 2025-05-14T15:04:01.000Z ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/37b912d7-43d9-476f-9e76-734529ded9d7_1374x388.png) [Subscribe now](https://www.energyflux.news/subscribe) **Trade in liquefied natural gas (LNG) will soon be dominated by middlemen. ‘Portfolio players’ with heroic demand assumptions are buying up startling volumes of LNG amid a notable flatlining in winter gas consumption in Europe. International oil companies and trading houses are going long on an expensive fuel that most analysts believe will be in acute oversupply in just a few short years — or perhaps sooner. But a closer inspection suggests there is method to the middlemen’s madness.** First, let’s take stock of the market. Europe’s supposed ‘post-Russian gas crisis’ is deflating before our eyes under the weight of stagnant winter demand. Prices on Dutch Title Transfer Facility (TTF, the European benchmark for natural gas), have fallen 20% in the last two weeks alone to the equivalent of $12 per million British thermal units (MMBtu) — despite a brief cold snap that [all but drained the UK’s meagre gas stocks](https://www.linkedin.com/posts/tradertim%5Fenergy-nationalgrid-gasstorage-activity-7138880058496053248-FcUp?utm%5Fsource=share&utm%5Fmedium=member%5Fdesktop). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a410809a-a958-4eaf-b19f-0bafa75b0459_2151x982.png) Analysts are even [predicting](https://www.linkedin.com/pulse/comment-icis-ttf-forward-curve-backwardation-flattens-marzec-manser-fmupe%3FtrackingId=A4gSCLaWTlieDDSVXhHxMw%253D%253D/?trackingId=A4gSCLaWTlieDDSVXhHxMw%3D%3D&ref=energyflux.news) that a mild, windy El Niño winter could see the February and March 2024 TTF contracts dipping *below* the summer months, minimising storage withdrawals in late February. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a1bf0e8e-ec3c-490d-a7df-8a82612f0923_2099x1049.png) If this happens, Europe will be well positioned to again coast through the restocking season and be as well-placed as it was this year heading into winter 2024/25. Anyone looking to Asia to rain on this parade of European gas market tranquility is likely to be disappointed. The Japan-Korea Marker (JKM, the North Asian spot LNG benchmark) has also deflated since the last [EU LNG chart deck](https://www.energyflux.news/p/the-winter-that-never-was) — albeit not quite as dramatically. The front month (Jan-24) is still trading at $16/MMBtu, with the curve strongly backwardated throughout Q1 2024. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/437e9398-04c6-48f5-bdfb-11c8bbe217ac_2102x1069.png) The steeper decline on TTF has reasserted a strong ‘Asian premium’ for LNG. The JKM-TTF spread breached the equivalent of $4/MMBtu last week, a level not seen since January this year. But don’t be mistaken — Asian buyers are not rushing out to tender. This is merely confirmation that Europe is retreating more quickly from the market because it literally has nowhere to put the gas. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d967424d-ca88-40f5-ab14-0e21da3a83c8_2101x1016.png) The cold snap that drained the UK’s tiny gas storage capacity made barely a dent in plentiful EU gas stocks, which still stand at 93% full — well above the 10-year average for this time of year. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d81ea199-ed67-4d32-8102-10b6dc9a81dd_1144x601.png) Chart by [Enerwrap](https://www.enerwrap.com/p/eu-gas-storage-weekly?ref=energyflux.news) The brief spell of colder weather did trigger an uptick in withdrawals from EU storage. Data from Gas Infrastructure Europe, visualised by, show daily net withdrawals spiking to some of their highest ever levels for early December — presumably because the lack of Russian pipeline gas leaves no alternative than to use stored gas to balance the market during cold snaps. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/86a4cb26-d246-4ff5-9c85-2a39e7ab2153_1156x607.png) Chart by [EnerWrap](https://www.enerwrap.com/p/eu-gas-storage-weekly?ref=energyflux.news) And yet TTF still fell by one-fifth while this happened. The result is a steady deterioration in the profitability of shipping spot LNG from the US Gulf Coast to Europe relative to Asia. The margin on a standard cargo carrying 160,000 cubic metres of US LNG is now less than $30 million — a two-month low. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/8dd954c7-ce35-4852-8e1b-d85cf43d9f42_2141x1003.png) *NOTE: A change in freight calculation methodology accounts for the uptick Asian cargo profitability on 27/11/2023* [Subscribe now](https://www.energyflux.news/subscribe) The market does not expect that to change much over the coming months. On paper at least, Asian netbacks are now edging out Europe for the foreseeable future (although these calculations do not take into account the severe bottlenecks on the Panama Canal that are [forcing some vessels to sail all the way around Cape Horn](https://x.com/ed%5Ffin/status/1732702944049463511?s=20&ref=energyflux.news)). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ebb814f3-7854-42ad-b332-0f4a0aa60a32_2129x939.png) So why, considering all the bearishness in a market that is only going to get more grizzly as new supply from Qatar and the US comes onstream, would anyone want to sign up for more LNG offtake without first securing a firm, profitable outlet for those volumes? ## YOLO-ing on LNG price risk Australia’s Woodside last week inked a [20-year sales and purchase agreement](https://mexicopacific.com/mexico-pacific-and-woodside-sign-long-term-lng-sales-and-purchase-agreement/?ref=energyflux.news) for 1.3 million tonnes per annum (mtpa) from Mexico Pacific LNG, a new export plant fed by US shale gas that is slated to come online during the post-2026 glut. This is the latest in a long string of SPAs between North American LNG exporters and ‘portfolio players’ — companies that both produce their own LNG and buy and resell volumes from other exporters, or traders and aggregators such as Trafigura and Vitol that bring commodities to market. These middlemen have signed offtake deals for no less than 65% of the 100 mtpa of new LNG export capacity under construction in the US, Mexico and Canada, according to [Poten](https://twitter.com/SergioChapa/status/1732455906347024572?s=20&ref=energyflux.news). They will need to find other buyers for their cargoes at strike deals at the best terms available. If none can be found, they will rely on the spot market — which, as is clear to see, is not showing much sign of improvement between now and the date when this capacity is due to enter the market. How can we explain this? Why would well-resourced and sophisticated traders go long on a fuel under a pricing regime that is handsomely profitable today but at growing risk of converging with — or even falling below — the price redeemable in LNG-importing countries? [Subscribe now](https://www.energyflux.news/subscribe) ## Force-feeding the market There are several theories to consider. The least flattering was alluded to in my opening sentence: hubris. The loss of Russian pipeline gas sent a rush of blood to the head of traders, who raked in [unspeakable profits](https://www.energyflux.news/p/europes-pyrrhic-gas-victory) as Europe pivoted sharply to LNG to fill the gap. Perhaps there is a belief that, for as long as a negotiated peace settlement in Ukraine remains untenable, demand for spot LNG will be robust — regardless of how much new supply enters the market? The LNG market is highly cyclical and prone to sharp price swings because the fuel is not as fungible as oil, which is a far more financialised commodity with greater ability to swap cargoes and delivery location, and which does not gradually boil off in transit. Amid war and geopolitical turmoil, maybe there is a belief that ‘this time it will be different’? This might offer a partial explanation. But perhaps there is a greater fear hanging over the middlemen: that today’s prices are [stifling growth in demand](https://www.energyflux.news/p/the-27-club) for their heralded transition fuel? TotalEnergies CEO Patrick PouyannĂ© alluded to this fear in an [interview at COP28](https://www.youtube.com/watch?v=gwtlzqqYv1g&t=13s&ref=energyflux.news) last week, telling Bloomberg: > *“We know that when we want to grow LNG \[demand\], we want to have enough supply in order to have a price more in the range of $8-10 per MMBtu because then it is acceptable for the Indian economy, the Thai economy, Bangladesh or Japan, even the Korean economy.”* If ‘genuine’ LNG buyers are unwilling or unable to sign enough long-term sales and purchase agreements (SPAs) to get new liquefaction projects financed, then that burden falls on the oil industry’s titans — the biggest, most creditworthy corporates — to do the heavy lifting. This means lengthening portfolio exposure to LNG, and carrying the risk that these contracts become less profitable over time. Currently, the futures market is pricing in the possibility of that happening — although not to the extent that US LNG becomes unprofitable in Europe, even in 2027. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0e0d25d4-9867-4d8a-aab3-5cc2dee71df6_2114x918.png) # Threading the needle LNG has two big price problems: it is expensive per unit of energy compared to other fuels, and its main application — power generation — is a highly competitive field that is being devoured by zero marginal cost renewables. The ‘sweet spot’ is a narrow price band: too high and it becomes uncompetitive, too low and it barely covers the cost of production, shipping and regasification. The middlemen are targeting growth markets that are highly price sensitive, such as Thailand, Vietnam, India and Bangladesh. Their (apparent) strategy is a tricky balancing act: sign enough SPAs to bring new supply to market and bring down prices to a level that stimulates demand. US LNG flirted around the margins of profitability in Europe for several years pre-Covid, and when countries locked down it made no economic sense to keep liquefying American shale gas for export. Widespread plant shut-ins occurred and offtakers paid hundreds of millions of dollars in penalties for cargo cancellations. The magic of sunk cost accounting might neuter fears of a repeat of 2020\. But as one analyst put it to me, the way the coming wave of new supply is shaping up, “the only ones that will make money are the LNG vessel owners”. [Subscribe now](https://www.energyflux.news/subscribe) # Nice work if you can get it For now, there is still enough much money to be made in LNG trade to make 2027 feel a long way off. Three years is an eternity in today’s energy markets, and traders’ bonuses are determined by the profitability of their decisions over the preceding 12 months. Swiss trading house Trafigura has just [tripled its dividend](https://www.bloomberg.com/news/articles/2023-12-08/trafigura-triples-dividend-to-5-9-billion-after-record-profit?srnd=markets-vp&sref=Tc2zJ2hz&ref=energyflux.news) to $5.9 billion after notching up another record-breaking annual profit. Spread across the company’s 1,200 top traders and executives, that’s an average payout of nearly $5 million per person. With more seven-figure bonuses to be earned in 2024, why would any middleman think twice about signing up for more? Trafigura does not expect the tide to turn on LNG any time soon, although it did highlight a cooling off in its [annual report](https://www.trafigura.com/news-and-insights/press-releases/2023/2023-annual-results-show-a-strong-performance-in-constantly-shifting-markets/?ref=energyflux.news). Its balance sheet shrank by 15% to $83 billion, “mostly driven by the decrease in the valuation of our long-term LNG contracts and related margin requirements from brokers and exchanges, as a result of the drop in natural gas prices in Europe”. While the medium-term outlook points towards a weakening gas market, this is still an exceptional time to be lifting and trading LNG and other commodities. I’ll leave the final word on this to Richard Holtum, Trafigura’s head of gas, power and renewables, who was notably silent on what the second half of the decade might look like: > *“Looking ahead, although 2023 brought a gradual softening of gas and power prices in Europe on the back of a mild winter, lower demand and increased LNG imports, we expect markets to remain turbulent and prone to spikes in 2024.”* **Seb Kennedy | Energy Flux | 11 December 2023** [Leave a comment](#ghost-comments-root) Enjoyed this post? Get independent gas and LNG market commentary from Energy Flux delivered straight to your inbox: --- # More from *Energy Flux*: [Europe’s pyrrhic gas victoryEurope survived last winter with unexpected ease. Mild temperatures helped, as did lacklustre Asian appetite for liquefied natural gas (LNG) and unprecedented conservation measures. There was much relief when wholesale prices fell below ‘pre-invasion’ levels in January, and this sentiment has intensified as Europe’s underground gas storage tanks swell. Mission accomplished?![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-262.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0cde0e44-8b54-4556-b2c8-48900bc9db6f_1496x906-15.png)](https://www.energyflux.news/p/europes-pyrrhic-gas-victory) [Greed over growthNatural gas is, objectively, a highly valuable energy source. The fuel has distinct advantages, from dispatchable electricity generation to space heating to chemical feedstock. Gas-fired power is cleaner than coal at the point of combustion and is a flexible companion to renewables. But its biggest flaw is price. Why is gas so expensive? In a nutshell: complexity, commodification, financialisation, scarcity – and greed. These factors are undermining the growth prospects of gas in established and emerging markets.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-263.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/32902c83-be54-4ed9-b13c-f2c05f69c9c5_1024x704-8.png)](https://www.energyflux.news/p/greed-is-killing-gas-demand-growth) [The 27 Club“Where are the feasts we were promised? Where is the wine, the new wine, dying on the vine.” – Jim Morrison How much gas will the world need in 27 years’ time? This question matters not just because it takes us to the feted mid-century point by which many countries have pledged to achieve ‘net zero’ emissions. For Shell and TotalEnergies, the answer will determine whether their latest bold bets on liquefied natural gas pay off.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-264.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/28c834fb-01b8-4fbd-ae46-938998e5744e_1024x1024-png-7.webp)](https://www.energyflux.news/p/the-27-club) ### The winter that never was URL: https://www.energyflux.news/the-winter-that-never-was/ Last updated: 2025-05-14T15:04:05.000Z Never say never, but is winter over before it even started? | EU LNG chart deck: 13-24 Nov 2023 _This post is for paying subscribers only._ ### Competitive tension URL: https://www.energyflux.news/competitive-tension/ Last updated: 2025-05-14T15:04:06.000Z How to keep offshore wind subsidies in check _This post is for paying subscribers only._ ### Dead cat bounce URL: https://www.energyflux.news/dead-cat-bounce-2/ Last updated: 2023-11-15T12:56:15.000Z _This post is for paying subscribers only._ ### Terminal decline URL: https://www.energyflux.news/terminal-decline/ Last updated: 2025-05-14T15:04:08.000Z Softening demand raises questions around Europe's LNG terminal expansion drive | EU LNG chart deck: 27 Oct - 10 Nov 2023 _This post is for paying subscribers only._ ### Greed over growth URL: https://www.energyflux.news/greed-is-killing-gas-demand-growth/ Last updated: 2025-05-14T15:04:10.000Z **Natural gas is, objectively, a highly valuable energy source. The fuel has distinct advantages, from dispatchable electricity generation to space heating to chemical feedstock. Gas-fired power is cleaner than coal at the point of combustion and is a flexible companion to renewables. But its biggest flaw is price. Why is gas so expensive? In a nutshell: complexity, commodification, financialisation, scarcity – and greed. These factors are undermining the growth prospects of gas in established and emerging markets.** Producing and storing natural gas is a complex process. Methane molecules must be discovered, surveyed, drilled, collected, piped, separated and treated, pumped along pipelines and held in specialised high-pressure tanks. If it’s going overseas, gas must be liquefied. This means super-cooling to minus 160 degrees Celsius, liquefaction at 200 times atmospheric pressure and loading the resultant LNG into cryogenic tanks aboard ocean-going vessels. At the receiving terminal it is warmed back into a gaseous state and pumped into the local gas network. There is a financial and energy cost incurred at each stage. Between 10-15% of the original energy content is lost in liquefaction, transportation and regasification. The infrastructure to do so must be financed, built, insured and maintained. All of this must be paid for by consumers. The problem is, consumers are consistently paying prices well above the cost of production and delivery. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/4a521fa3-46fc-4797-9fe3-71cf649b9536_4205x1915.png) There are huge margins to be made on LNG shipments to Europe. The cost of producing American LNG and hauling it across the Atlantic tends to be above the cost of gas delivered by pipeline. But it rarely dips below the traded price of gas on the Dutch Title Transfer Facility (TTF), Europe’s gas benchmark. Why is this? It was not always thus. Pre-Ukraine, the landed cost of US LNG was frequently above TTF but plant shut-ins were rare due to commercial structures. Offtakers signed take-or-pay agreements to lift cargoes or pay a penalty. The cost of liquefaction – which is typically around $3/MMBtu – is deemed a sunk cost so is discounted from the calculation of whether to lift cargoes. Only when the loss on lifting a cargo rises above the cancellation penalty does it make sense to cancel a scheduled US LNG cargo. This last happened in 2020, when Covid-induced lockdowns artificially suppressed demand and dragged gas hub prices into the doldrums. Since mid-2021, when Russia began outwardly weaponising pipeline gas deliveries to Europe, TTF has been on a dizzying journey of volatility that has made US LNG look cheap by comparison. The whipsaw to the upside has been spectacular, and everyone involved in the gas value chain wants a piece of the action. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/04b22cc9-82f0-4fbd-9f22-10f1bc437556_4230x1965.png) [Subscribe now](https://www.energyflux.news/subscribe) ## Hustling for value Rather than being on the receiving end of this trade, utilities have sought to claw back value by venturing closer to the source of production and taking on volume risk. They’ve done this by signing US LNG sales and purchase agreements (SPAs) with the take-or-pay (TOP) clauses mentioned above. At the other end of the chain, LNG margins also caught the attention of American gas producers. Rather than handing over their molecules at the going rate on Henry Hub, shale gas companies want exposure to European market pricing. Shale drillers such as EOG Resources, Tourmaline Oil and Apache Corporation were first movers, signing deals to supply feed gas to LNG plants at prices indexed to international benchmarks. Chesapeake Corporation last week took it a step further, signing a [Heads of Agreement with trader Vitol](https://www.vitol.com/chesapeake-energy-corporation-and-vitol-sign-long-term-lng-supply-heads-of-agreement/?ref=energyflux.news) to supply LNG at a price indexed to JKM, the Asian spot LNG benchmark. The deal is interesting because Chesapeake is not an LNG producer; the agreement requires both parties to find a plant they can use to liquefy the gas. Agreeing the terms of an LNG contract without involving the LNG producer relegates the liquefaction plant to a service provider charging a fixed fee per unit. This is how the US LNG industry used to operate. The first wave of US liquefaction plants provided liquefaction as a service for which they tolled a fixed fee to third parties. Cheniere Energy broke the mould by venturing into the upstream to purchase its own feed gas, liquefy it and sell it ‘free on board’ under binding SPAs with TOP clauses. But control over the upstream resource was not enough. LNG producers could see the upside being captured by their customers, and wanted in. Cheniere achieved this by reserving some of its LNG output to sell on a merchant basis to traders, utilities and industrials in LNG-importing countries. Chesapeake’s move to push the LNG plant out of the commodity play thus brings the model full circle. It is the latest powerplay in the endless hustle for a piece of the margin pie. Every market participant is constantly haggling over the terms of exposure to maximise their upside while minimising risk of becoming the bag-holder when markets go south. This relentless pursuit of extracting the highest profit from every stage of the LNG production process drives up costs for consumers. [Subscribe now](https://www.energyflux.news/subscribe) ## The curse of financialisation But that doesn’t fully account for the exorbitant premiums being paid today by European consumers. This is where commodification and liberalisation come into play. Liberalisation removed barriers to market exchange, allowing buyers and sellers to transact with greater ease and transparency using standardised contracts for gas delivery. Liquidity was fostered by neoliberal European regulators fixated on free market ‘price discovery’. They designed markets that encouraged speculation on future gas prices using financial instruments. Financialisation attracted more market participants including investors and speculators – market participants highly attuned to signals of supply and demand fluctuation. Financialisation brings the future into the present. The likely impact of unfolding events on the future gas supply balance is factored into prices payable today, which influences trading psychology, behaviour and real-world outcomes. Humans are by nature emotionally sensitive to news of war and geopolitical events. Liberalisation and financialisation have transposed that sensitivity into gas price formation. In the most deep and liquid gas markets such as TTF, trades are today settled on the basis of sentiment and the primary commodities are capital and information, not physical molecules of gas. As technicals overtake fundamentals, inherent value and cost of production become almost an afterthought. Large financial players such as US hedge funds and Asian investment funds are today the market makers, accounting for an estimated 30% of gross TTF positions. These entities have the capital and heft to move prices 10% or 20% in a week, or even within-day, as occurred during last week’s correction. ## Markets are accelerating Susceptibility to sentiment is accelerated by exponential advancements in technology. In this realm, speed of execution is everything. Algorithms analyse vast amounts of market data and execute trades based on predefined rules, optimising entry and exit points and reacting swiftly to market changes. Artificial intelligence gives traders an edge, responding in real time to regulatory announcements, weather forecasts, breaking news events and even market rumours. Predictive analytics anticipate natural gas price movements and are particularly valuable in getting ahead of short-term fluctuations. Machine learning can identify patterns in market data to help traders adapt their strategies to changing market conditions and inflate their risk-adjusted returns. Automation has had a startling impact on TTF traded volumes. Intercontinental Exchange [celebrated](https://ir.theice.com/press/news-details/2023/ICE-Announces-Record-Traded-Volumes-in-TTF-Natural-Gas/default.aspx?ref=energyflux.news) a record 5.7 million TTF futures and options traded during May 2023, equivalent to 4,158 terawatt-hours (TWh). That’s more than the EU’s entire annual gas consumption in 2022\. If these traded volumes are sustained over the full year, the implication is that each unit of gas consumed in the EU will have changed hands on average between 10 and 15 times before reaching consumers. A lot of this activity reflects prudent risk management by utilities, producers and other physical players with exposure to the underlying commodity. These market participants benefit from the liquidity that financial players bring. Heightened volatility is often observed when liquidity is low and covering an out-of-money position – a so-called ‘stop loss’ – becomes expensive. But the increasing presence of financial players placing large bets on TTF also stokes volatility and inflates prices. Short sellers must cover their positions when prices rise by buying back paper volumes, which accelerates the bull run. Physical buyers are forced to swallow these prices on the way up, and they must also keep buying on the way down – moderating bearish corrections. [Subscribe now](https://www.energyflux.news/subscribe) ## Who wants more gas? In a European market still recalibrating to the loss of Russian gas, the net effect of this market structure is to magnify movements in both directions while also keeping prices elevated. Europe has enough gas in storage to weather even the harshest of winters, and forecasts are for a mild, wet and windy El Niño northern hemisphere winter. TTF fell 10% last week and yet it is still trading at a \~63% premium to the landed cost of US LNG. Europe’s reliance on LNG for energy security means TTF now increasingly drives global gas pricing. This is kryptonite for LNG demand growth in emerging markets. Coal-dependent South-East Asian economies are highly unlikely to switch to an expensive and volatile fuel that places them at the whim of haywire and unpredictable European market sentiment. For countries with established gas markets and a declining domestic supply base, LNG can provide a convenient backfill solution while downstream consumers adjust and new ways are found to power their economies. But wherever coal is king, the heir apparent is not gas. Renewables are tracking up the S-curve of adoption, and the current inflationary readjustment in wind and solar will at most merely temper that trend. It will not prompt a course correction. Integrated energy majors such as Shell, BP and TotalEnergies are [staking their collective future](https://www.energyflux.news/p/the-27-club) on double-digit energy demand growth in emerging and developing economies. Their thesis is that lifting people out of poverty requires energy, and cleaner air. This much is true. But the idea that ‘cleaner burning’ gas is the solution is mistaken. Price is everything, and wildly expensive energy sources will lose out every time. **Seb Kennedy | Energy Flux | 6th November 2023** [Leave a comment](#ghost-comments-root) Enjoyed this post? Sign up for original market commentary from Energy Flux by becoming a free or paid subscriber --- ## More from *Energy Flux*: [Energy transition = volatility (part 2)The EU pioneered energy market liberalisation in the belief that free market competition delivers efficiencies that drive down the cost to consumers. The experiment with market-based pricing for natural gas paid off: EU retailers and heavy industry saved billions of euros on gas import bills over the past decade – but will these savings endure? As the winter energy crunch morphs into a full-blown energy crisis, the pitfalls of liberalised energy trading are coming to the fore.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-275.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/b8e6e350-94ca-4198-80aa-69493d35fe16_5184x3292-jpeg-3.jpg)](https://www.energyflux.news/p/energy-transition-volatility-part) [The 27 Club“Where are the feasts we were promised? Where is the wine, the new wine, dying on the vine.” – Jim Morrison How much gas will the world need in 27 years’ time? This question matters not just because it takes us to the feted mid-century point by which many countries have pledged to achieve ‘net zero’ emissions. For Shell and TotalEnergies, the answer will determine whether their latest bold bets on liquefied natural gas pay off.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-276.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/28c834fb-01b8-4fbd-ae46-938998e5744e_1024x1024-png-10.webp)](https://www.energyflux.news/p/the-27-club) [Gas bubble?European natural gas prices have retreated from recent peaks but remain unsustainably high. The initial shock of events in Israel and the Baltic Sea is giving way to a creeping realisation that gas fundamentals remain weak. European LNG imports have fallen by a third since the summer even as prices rose by the same proportion, suggesting a correction is due. But LNG traders can still make a killing before that happens.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-277.png)Energy FluxSeb Kennedy![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/335794b1-11c5-41b6-b9ef-161c30e1345c_1024x1024-png-7.webp)](https://www.energyflux.news/p/gas-bubble) ### Gas bubble? URL: https://www.energyflux.news/gas-bubble/ Last updated: 2025-05-14T15:04:13.000Z Prices rise even as demand falls. Time for a correction? | EU LNG chart deck: 16-27 Oct 2023 _This post is for paying subscribers only._ ### The 27 Club URL: https://www.energyflux.news/the-27-club/ Last updated: 2025-05-14T15:04:15.000Z Who wants to place a wager on what the world will look like in 2050? _This post is for paying subscribers only._ ### Shock therapy URL: https://www.energyflux.news/shock-therapy/ Last updated: 2025-05-14T15:04:18.000Z Geopolitical crises jolt moribund gas markets back into life | EU LNG chart deck: 9-13 Oct 2023 _This post is for paying subscribers only._ ### Eerie calm URL: https://www.energyflux.news/eerily-calm/ Last updated: 2025-05-14T15:04:23.000Z Global gas and LNG benchmarks are flatlining on the eve of winter. How long can this market tranquility last? EU LNG chart deck: 18 Sep-6 Oct 2023 _This post is for paying subscribers only._ ### Less offshore wind = more CO2, even more ÂŁÂŁÂŁ URL: https://www.energyflux.news/less-uk-offshore-wind-means-more-co2-costs/ Last updated: 2025-05-14T15:04:24.000Z Extra gas burn would boost UK power emissions by a quarter at a cost of ÂŁ1 billion every year _This post is for paying subscribers only._ ### Pushing the boat out URL: https://www.energyflux.news/pushing-the-boat-out/ Last updated: 2025-05-14T15:04:27.000Z There’s no safe place to put all the gas. EU LNG chart deck (4-15 Sep 2023) _This post is for paying subscribers only._ ### Less offshore wind = more gas, more ÂŁÂŁÂŁ URL: https://www.energyflux.news/less-offshore-wind-more-gas-more/ Last updated: 2025-05-14T15:04:28.000Z The UK’s looming offshore wind shortfall could cost billions in extra gas consumption _This post is for paying subscribers only._ ### Industrial (in)action URL: https://www.energyflux.news/industrial-inaction/ Last updated: 2025-05-14T15:04:30.000Z Global gas prices fell even as Australian unions set a date to strike. What gives? EU LNG chart deck: 28 Aug-1 Sep 2023 _This post is for paying subscribers only._ ### Made in Germany, fuelled in America URL: https://www.energyflux.news/made-in-europe-fuelled-in-america/ Last updated: 2025-05-14T15:04:34.000Z Incredibly, BASF could save $4.8 billion by buying LNG from America. EU LNG chart deck: 21-25 Aug 2023 _This post is for paying subscribers only._ ### Gas on the water URL: https://www.energyflux.news/gas-on-the-water/ Last updated: 2025-05-14T15:04:36.000Z Bizarrely, natural gas is now worth more at sea as LNG than in underground storage. EU LNG chart deck: 14-18 Aug 2023 _This post is for paying subscribers only._ ### Strike spike URL: https://www.energyflux.news/strike-spike-eu-lng-gas-prices/ Last updated: 2025-05-14T15:04:38.000Z EU LNG chart deck: 7-11 Aug 2023 _This post is for paying subscribers only._ ### *REPOST* Big Oil’s painful offshore wind pivot URL: https://www.energyflux.news/repost-oil-painful-offshore-wind-pivot/ Last updated: 2025-05-14T15:04:39.000Z European oil majors throw caution to the wind by embracing razor-thin margins _This post is for paying subscribers only._ ### Europe’s pyrrhic gas victory URL: https://www.energyflux.news/europes-pyrrhic-gas-victory/ Last updated: 2025-05-14T15:04:41.000Z [Subscribe now](https://www.energyflux.news/subscribe) **Europe survived last winter with unexpected ease. Mild temperatures helped, as did lacklustre Asian appetite for liquefied natural gas (LNG) and unprecedented conservation measures. There was much relief when wholesale prices fell below ‘pre-invasion’ levels in January, and this sentiment has intensified as Europe’s underground gas storage tanks swell. Mission accomplished?** ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/bbf28f53-66c9-4961-82b4-fa6afae546fb_1496x906.png) *King Pyrrhus of ancient Greece heading into battle on horseback, by DALL-E* [Subscribe now](https://www.energyflux.news/subscribe) EU Energy Commissioner Kadri Simson seems to think so. She made some bold remarks about turning the tables on Putin and ending reliance on Russian gas in an [interview with Politico](https://www.politico.eu/article/putins-gas-problem/?ref=energyflux.news). Europe’s immediate energy situation is certainly much better than many feared just a few months ago. But this does not hide the fact that Europe is still paying significantly more for gas than it did prior to 2021, when Russia began meddling in European energy markets ahead of the full invasion of Ukraine. Gas prices on the Dutch Title Transfer Facility (TTF, the European benchmark) averaged $5.31/MMBtu over the 2017-2020 period, whereas today the front-month contract is trading at $9.44/MMBtu, rising above $17 for delivery in January and February 2024. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0d5ed903-c2d7-43d4-8b3e-a1062a1cc175_1382x794.png) ## Trillion-dollar albatross These elevated prices are hard to absorb because European consumers are still burdened with an eye-watering cost overhang. Believe it or not, Europe has burned through more than a trillion dollars’ worth of natural gas since Russia began weaponising pipeline exports in preparation to invade Ukraine. Yes, you read that right: the value of gas consumed across the European continent since 2021 currently stands at **$1.12 trillion**, and structurally higher prices could see that amount rise by a further **$600 billion** by mid-decade. Calculations by *Energy Flux* based on the Energy Institute’s Statistical Review of World Energy and exchange data offer fresh perspectives on the toll of wartime gas pricing on Europe’s financial health. Europe spent a decade’s worth on gas in just two and a half years, even though consumption fell to a 28-year low in response to scarcity prices. A gargantuan debt is attached to gas held in storage, which means more pain for consumers and an enduring drag on European industrial productivity. Restocking with LNG at the height of the market stifled Europe’s energy-intensive industries and rebased the continent around a high-cost, low-demand energy economy paradigm. ## Quantifying the burn First, let’s break down the numbers. Fair warning: this is a simple calculation based on high-level data, so has a low confidence level and high margin of error (see footnote[1](#footnote-1)). That said, it gives plenty of food for thought. So, with the health warning duly administered, here goes. Gas consumption across the continent of Europe – the EU27 plus Norway, the UK, Turkey, Ukraine, and other non-members – dropped 13% to 499 billion cubic metres (Bcm) in 2022\. This was the smallest amount of gas consumed in the region since 1995, with steep year-on-year declines seen in Finland (-48%), Sweden (-30%), Ukraine (-29%), Latvia (-30%) and Denmark (-28%). Gas burn in Germany, Europe’s biggest gas market, fell by 15%. Month-ahead TTF averaged $38/MMBtu in 2022 and $16/MMBtu in 2021\. If we assign these prices to the volume of gas consumed each year, then Europe’s gas consumption can be crudely valued at **$673 billion** in 2022 and **$330 billion** in 2021. EU-only gas demand over the first six months of 2023 [fell by 17.7%](https://ec.europa.eu/eurostat/web/products-eurostat-news/w/DDN-20230419-1?ref=energyflux.news) below the 2017-2022 average. Applying that 17.7% derating factor to continent-wide demand over the same period, pan-European consumption can be estimated at 225 Bcm of gas in the first half of this year, when prompt TTF averaged $14.50/MMBtu. Multiplying volume by price puts the value of H1 2023 gas consumption at **$117 billion**. Add these figures together, and the total value of gas burned across the continent of Europe over the last 30 months comes in at a grand total of **$1.12 trillion**. This is comparable to the value of gas burned over the preceding decade to 2020 ($1.35 trillion). ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a8d931d0-d0ca-4cdc-a9b9-18de64bcd986_1608x822.png) Thanks for reading. Please support Energy Flux by sharing this post ## Epic hangover For perspective, $1.12 trillion exceeds the GDP of Saudi Arabia, and is more than the combined market capitalisation of ExxonMobil, Chevron and Shell. It dwarfs the amount that Europe invested in clean energy over this period ($260 billion in [2021](https://www.iea.org/reports/world-energy-investment-2022/overview-and-key-findings?ref=energyflux.news) and $154 billion in [2022](https://www.iea.org/reports/world-energy-investment-2023/overview-and-key-findings?ref=energyflux.news), per the IEA), and is more than double the [estimated $411 billion cost](https://www.worldbank.org/en/news/press-release/2023/06/22/boosting-project-delivery-capacity-in-key-ukrainian-institutions?ref=energyflux.news) of post-war reconstruction in Ukraine. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ae823f50-3b9e-403b-b2f6-b8c76a276f5a_1460x824.png) Burning through one trillion dollars’ worth of gas pushed the [EU’s trade deficit](https://ec.europa.eu/eurostat/web/products-eurostat-news/w/DDN-20230331-1?ref=energyflux.news) to a record -€432 billion in 2022\. This is a huge macroeconomic drain and a major reversal of recent trends. Gas consumption as a percentage of EU GDP had been declining steadily from around 0.5% in 2014 to hit a low of just 0.2% in 2020, the year of pandemic lockdowns and cratering global energy consumption. Russia’s [pre-war manipulation of European gas markets](https://www.energyflux.news/p/too-much-politics-not-enough-gas) in 2021, and the wild price gyrations triggered by its full invasion of Ukraine, slammed that trend into reverse. EU gas consumption as a percentage of GDP shot up to 0.9% in 2021 and again to 1.6% in 2022. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/c46637a1-5177-484e-8fac-c2e08067615d_1404x798.png) [Subscribe now](https://www.energyflux.news/subscribe) ## Costing Europe’s LNG binge The trillion dollar figure includes pan-European domestic gas production and imports (both by pipeline and seaborne LNG). Domestic gas volumes (in theory) attract production levies and taxes that flow back into state coffers. European gas production also supports jobs, so the economic ‘value’ to Europe of consuming expensive gas cannot be considered entirely negative (although for unhedged consumers it is all cost and no benefit). The import bill (pipeline + LNG) is the most interesting element because it represents an outflow of wealth from European economies into gas exporting nations, so can more appropriately be described as a ‘cost’ to Europe. Using the same data sources and methodology as above, Europe’s gas import bill can be estimated at **$702 billion** since 2021 ($196 billion in 2021, $433 billion in 2022 and $73 billion in the first half of 2023). These are huge increases on 2020, when Europe spent $36 billion on gas imports. Over 2011-2020, Europe’s total gas import bill was $744 billion, or on average $74 billion per year. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/1842ce28-8c6a-45c7-b6cc-3ab41d8cb659_1438x704.png) Import costs spiked even though Europe imported less gas overall. LNG imports increased by 63 Bcm (+58%) in 2022 but did not replace Russian inflows in their entirety, which fell by 81 Bcm (-35%). In total, Europe’s gas imports fell by 18 Bcm (-5.3%) to 321 Bcm in 2022\. This is roughly the same amount consumed in 2020, but the cost was more than ten times greater. Get original energy commentary straight to your inbox. Sign up for free, or make a donation ## Higher for longer, lower forever? Europe’s gas bill is likely to remain elevated over the next 2.5 years even if demand remains depressed. The price ructions of 2022 may have subsided, but the forward curve remains structurally inflated well above the historical average. Applying the same methodology as above, the value of all gas (imports + European production) likely to be consumed over the next 2.5 years can be estimated at roughly **$600 billion** even if demand remains flat.[2](#footnote-2) It could go higher if prices surge or demand springs back, but neither of these appear likely. Industrial gas consumption, which [flexed down the most](https://www.bruegel.org/dataset/european-natural-gas-demand-tracker?ref=energyflux.news) to balance the market when prices went haywire, shows no sign of immediate recovery. High costs erode the margins of energy-intensive industries, quelling appetite to reopen shuttered steel, fertiliser, chemicals, ceramics, and glass production facilities. Thanks to the economising of heavy industry (and a slower pass-through of costs onto retail bills), households were spared the full burden of throttling back on gas consumption. Demand in this segment is particularly sticky because the political and human consequences of homes going cold are greater than a chemicals factory shifting to a three-day working week. This puts a floor under gas demand, but historically elevated prices act as a ceiling. This holds true in electricity generation too, where expensive fuel and carbon costs are undermining the economics of gas-fired power (this has been the case [since the start of this year](https://www.energyflux.news/p/is-gas-fired-power-back-in-the-money)). As the chart below shows, a 40% efficient coal plant has much more healthy profit margins than a 50% efficient combined cycle gas turbine. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/b86f6240-7287-4d0c-8199-a29a24129abc_1630x858.png) ## Exporting misery (at consumers’ expense) The trillion dollar figure is based on high-level data, so has a low confidence level and high margin of error. Nonetheless, it serves to illustrate the economic cost of hasty policy decisions taken in response to Russia’s full invasion of Ukraine. The rush to fill underground gas storage facilities at the height of the market was understandable considering the alternative – risk of physical shortages – but the costs were apparent at the time, and governments put consumers on the hook. In Germany, state-backed gas market manager Trading Hub Europe (THE) was instructed to procure 50 TWh (5.12 Bcm) of gas on world markets to restock in time for an anticipated harsh winter that never arrived. The vast majority of that gas (37 TWh) remains in storage to this day, and the depreciation of the commodity means that THE is [carrying a de-facto loss of at least €7 billion](https://www.euractiv.com/section/energy-environment/news/the-aftermath-of-germanys-2022-gas-buying-spree-a-e7bn-bill-for-consumers/?ref=energyflux.news). Stored gas held by THE is almost unburnably expensive because prices would have to spike again to the crazy highs of 2022 for these volumes to come back into the money. There are two scandals here: the first is that THE bought gas on the spot market [unhedged](https://www.argusmedia.com/en/news/2408814-german-state-in-dilemma-over-gas-storage-holdings?ref=energyflux.news) because it was allowed to pass costs on to retail distributors via a special gas storage levy, which in turn will be recovered from consumers via their energy bills. The second uncomfortable truth is that Europe’s $702 billion gas import bill amounts to an outsourcing of energy misery onto less wealthy nations. Crisis-stricken [Pakistan](https://www.energyflux.news/p/zombie-gas-pipelines-taunt-pakistan) is the poster child for wartime energy injustice: the country was left high and dry when traders [rerouted cargoes](https://www.source-material.org/pakistan-burns-coal-as-oil-major-diverts-its-gas/?ref=energyflux.news) to cash in on Europe’s LNG binge. Thanks to European policies and liberalised markets, European consumers were unwittingly forced to bankroll this insanity. While they will be paying down the debt for years to come, Pakistan won’t receive a penny – or any favours from Europe if and when energy prices spike again. [Enjoying the read? Please donate!](https://checkout.stripe.com/c/pay/plink%5F1MNWc4IV8PvfOTcaAb6qbiPr?ref=energyflux.news#fidkdWxOYHwnPyd1blppbHNgWjA0TFNhMFxMUz1Vc2NKUWZkdVxWX3ExMjFhb3xhb2l9cEpfNkMyVTQzQWdEbHw0YldNampDaXA0XWJyX3ZcfUZcSHdCRFRAaDdyT1ZANzVnQkBvdn9qb291NTVpX090T3JhaicpJ3VpbGtuQH11anZgYUxhJz8nMWJyNDNnN0NjYUBgMkl8NTU1Jyknd2BjYHd3YHdKd2xibGsnPydtcXF1dj8qKnJycitga2B3YnxjaXB9K2tgcnYqJ3gl) All of this should focus minds on the urgent need to bend the curve on gas demand via energy efficiency measures, while ramping up renewables, transmission, and energy storage deployment rates. The post-Covid period has served as a painful reminder that energy markets are [fickle](https://www.energyflux.news/p/energy-markets-are-so-damn-fickle). The costs of securing supplies at short notice on global markets in periods of turmoil can multiply as quickly as the benefits of doing so can evaporate. Burning through a trillion dollars’ worth of gas is unsustainable for Europe in any circumstances. Even if global gas prices do ever fall back to genuine ‘pre-invasion’ levels, demand reduction is a no-regrets move: any policy costs will pay for themselves by taming Europe’s penchant for wild gas spending sprees when markets tighten. **© Seb Kennedy | Energy Flux | 12 July 2023** ###### **\* Disclaimer: All opinions expressed here are entirely mine and not my employer’s \*** --- [Leave a comment](#ghost-comments-root) [Donate](https://checkout.stripe.com/c/pay/cs%5Flive%5Fa16DeRAQszJDsPGg9Tmk4nILdKOaq7LYeDQKQlJyUeSAV1XLCY0U2Bcjnq?ref=energyflux.news#fidkdWxOYHwnPyd1blppbHNgWjA0TFNhMFxMUz1Vc2NKUWZkdVxWX3ExMjFhb3xhb2l9cEpfNkMyVTQzQWdEbHw0YldNampDaXA0XWJyX3ZcfUZcSHdCRFRAaDdyT1ZANzVnQkBvdn9qb291NTVpX090T3JhaicpJ3VpbGtuQH11anZgYUxhJz8nMWJyNDNnN0NjYUBgMkl8NTU1Jyknd2BjYHd3YHdKd2xibGsnPydtcXF1dj8qKnJycitga2B3YnxjaXB9K2tgcnYqJ3gl) --- 1. ###### **Even in benign markets, wholesale prices swing strongly away from annual averages on a daily, weekly and seasonal basis. Benchmark TTF is a useful proxy for European wholesale gas but prices do vary significantly across the continent, particularly in semi-isolated markets such as the Iberian peninsula. A more accurate estimate of the value of volumetric consumption would require a more robust methodology and more granular data that correlates price movements with consumption over shorter time intervals. The extent and pace of wholesale price pass-through to households, businesses and industrial consumers would also need to be taken into consideration.** 2. ###### **These forward-looking calculations are conservative because they are based on (currently benign) futures prices and an assumption that demand will remain flat at 449 Bcm per year in both 2024 and 2025\. Both demand and prices are notoriously hard to forecast – particularly in periods of heightened volatility and shifting energy market dynamics. EU gas markets remain [febrile](https://www.energyflux.news/p/chinese-whispers-european-jitters) and a harsh winter (or a supply shock) would reinflate Europe’s gas bill.** --- ### More from *Energy Flux*: [Chinese whispers, European jittersEurope, we are told, should fear China. A prevailing narrative in some energy circles is that post-Covid Chinese demand for liquefied natural gas will come roaring back and that Europe will face a much tougher task restocking gas for next winter than last time around.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-316.png)Energy Flux](https://www.energyflux.news/p/chinese-whispers-european-jitters) [Is gas-fired power back in the money?Ultra-expensive gas rendered gas-fired power unprofitable for much of 2022 Recent falls in wholesale gas prices briefly reversed that situation Gas plant profitability could easily flip negative again, temporarily benefitting coal Economics still favour switching from coal to wind or solar PV plus battery storage![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-317.png)Energy Flux](https://www.energyflux.news/p/is-gas-fired-power-back-in-the-money) [Energy markets are so damn fickleThree weeks is a long time in energy markets. Before the Christmas break, Europe was enduring a bitterly cold snap characterised by very low wind speeds and strong heating demand. The abysmal performance of France’s ageing nuclear fleet placed extra demand on dispatchable power generation. Christmas had come early for natural gas traders, or so it seemed.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-318.png)Energy Flux](https://www.energyflux.news/p/energy-markets-are-so-damn-fickle) ### Scholz the cautious LNG shipper URL: https://www.energyflux.news/scholz-the-cautious-lng-shipper-2/ Last updated: 2023-06-29T12:28:26.000Z _This post is for paying subscribers only._ ### *REPOST* Lost in transition: Big Oil searches for purpose as peak demand looms URL: https://www.energyflux.news/repost-lost-in-transition-big-oil/ Last updated: 2025-05-14T15:04:42.000Z BP’s decision to slash its crude production this decade is brave. But its assumption that pivoting to low carbon will be profitable is heroic _This post is for paying subscribers only._ ### Scope 3 hyperopia URL: https://www.energyflux.news/scope-3-mistaken-focus-end-use-emissions/ Last updated: 2025-05-14T15:04:44.000Z The energy industry can barely tame its own emissions, let alone yours and mine _This post is for paying subscribers only._ ### Zombie pipelines taunt Pakistan URL: https://www.energyflux.news/zombie-gas-pipelines-taunt-pakistan/ Last updated: 2025-05-14T15:04:45.000Z Pakistan is the Asian ‘energy bridge’ that never got built. Now the country is about to implode under the pressure of unaffordable energy. _This post is for paying subscribers only._ ### Chinese whispers, European jitters URL: https://www.energyflux.news/chinese-whispers-european-jitters/ Last updated: 2025-05-14T15:04:47.000Z Brittle EU gas markets were rattled by misplaced fears of renewed Chinese appetite for LNG. In fact, China barely needs spot LNG and will probably be sending more cargoes to Europe in the coming years _This post is for paying subscribers only._ ### Can green steel halt EU deindustrialisation? URL: https://www.energyflux.news/can-green-steel-halt-eu-deindustrialisation/ Last updated: 2025-05-14T15:04:50.000Z Decarbonising steel is an immense challenge, a climate imperative and a huge industrial opportunity _This post is for paying subscribers only._ ### Green steel and intermittency risk URL: https://www.energyflux.news/green-steel-and-renewable-intermittency-risk/ Last updated: 2025-05-14T15:04:51.000Z Can the steel industry decarbonise using variable-output wind and solar? _This post is for paying subscribers only._ ### Is gas-fired power back in the money? URL: https://www.energyflux.news/is-gas-fired-power-back-in-the-money/ Last updated: 2025-05-14T15:04:53.000Z EU gas hub prices collapsed at the end of 2022. But the economics of gas power plants remain extremely challenged _This post is for paying subscribers only._ ### Important billing update URL: https://www.energyflux.news/important-billing-update/ Last updated: 2025-05-14T15:04:53.000Z There’s no paywall and subscriptions are now donations. Billing resumes on Monday. _This post is for paying subscribers only._ ### Energy markets are so damn fickle URL: https://www.energyflux.news/energy-markets-are-so-damn-fickle/ Last updated: 2025-05-14T15:04:54.000Z And none more so than natural gas _This post is for paying subscribers only._ ### The price of freedom (gas) URL: https://www.energyflux.news/the-price-of-freedom-gas/ Last updated: 2025-05-14T15:04:56.000Z DEEP DIVE: The need to reduce gas demand - and political squabbling - has never been more urgent _This post is for paying subscribers only._ ### China’s thirst for (clean) power URL: https://www.energyflux.news/chinas-thirst-for-clean-power/ Last updated: 2025-05-14T15:04:58.000Z Coal saved China’s hydro-reliant provinces during this summer’s extreme drought. But using thermal plants to prop up the grid during dry periods risks exacerbating the problem of water stress _This post is for paying subscribers only._ ### HOT TAKE: BP’s LNG hedge turns sour URL: https://www.energyflux.news/hot-take-bps-lng-hedge-turns-sour/ Last updated: 2025-05-14T15:04:59.000Z But ‘exceptional’ gas trading propels earnings _This post is for paying subscribers only._ ### EU gas goes
 negative? URL: https://www.energyflux.news/eu-gas-goes-negative/ Last updated: 2025-05-14T15:05:00.000Z Gas stocks are almost full, but don't rejoice yet _This post is for paying subscribers only._ ### Novos horizontes URL: https://www.energyflux.news/novos-horizontes/ Last updated: 2025-05-14T15:05:01.000Z Extended outage during relocation _This post is for paying subscribers only._ ### US LNG is becoming a zero-sum game URL: https://www.energyflux.news/us-lng-is-becoming-a-zero-sum-game/ Last updated: 2025-05-14T15:05:02.000Z More American gas in Europe means more price pain for American consumers — and vice-versa _This post is for paying subscribers only._ ### Space, time and electricity (part 3) URL: https://www.energyflux.news/space-time-and-electricity-part-3/ Last updated: 2025-05-14T15:05:03.000Z [Subscribe now](https://www.energyflux.news/subscribe) **Paying wind farms to shut down and paying even more to turn up gas-fired power stations makes no sense even in the best of times. Amid the tightest global gas market and worst UK energy poverty crisis in living memory, it is sheer lunacy. And yet that is precisely what the UK is doing with increasing frequency due a failure to match a ramp-up in wind with adequate transmission capacity.** **‘Fixing’ this by pushing new risks onto generators via ‘nodal’ electricity pricing and centralisation of dispatch decisions runs a high risk of unintended consequences. Locational marginal pricing (LMP) doesn’t really attack the crux of the problem, is politically awkward and fails to decouple electricity prices from gas. So, is it doomed to fail?** [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/0e97e7e6-f61a-44ac-a609-88d3997173dc_1920x1244-jpeg-1.jpg)](https://www.energyflux.news/) ##### ***This is part three in a mini-series exploring plans to introduce locational marginal pricing (LMP) in the UK electricity market. Part one is free to read*** [***here***](https://www.energyflux.news/p/space-time-and-electricity-part-1)***. Part two is available to premium members*** [***here***](https://www.energyflux.news/p/space-time-and-electricity-part-2)***.*** [***Subscribe today***](https://www.energyflux.news/subscribe) ***for full access.*** ##### ***Article stats: 2,400 words / 11-minute reading time*** [Subscribe now](https://www.energyflux.news/subscribe) Last year, UK energy consumers paid **ÂŁ507 million** to replace zero marginal cost wind with much more expensive electricity from gas-fired power stations. This cost arises from the unhappy workaround known as **wind curtailment**, a problem that is only going to get worse as the UK builds more wind farms in far-flung locations. Curtailment costs rose from **ÂŁ299 million** in 2020, due mainly to the spike in wholesale natural gas prices in the second half of 2021\. In November 2021 alone, the cost of wind curtailment was a staggering **ÂŁ200 million**. The vast majority of this cash is being funnelled to combined cycle gas turbine (CCGT) power stations. That’s because curtailed wind farms forego subsidy payments, so the net cost to consumers of the ‘shut down wind’ element of curtailment (known as the ‘bid’ price) is much less than the ‘fire up gas’ element (the ‘offer’ price). And the further wholesale gas prices rise, the greater the financial and carbon cost of curtailment – eroding the wealth and health of hard-pressed British consumers. In 2021, the net ‘bid’ cost to consumers (from shutting down predominantly Scottish wind) came in at **ÂŁ78 million**. But the ‘offer’ cost (of cranking up mostly CCGTs) was **ÂŁ429 million**. So, when a British wind farm is curtailed, around **85%** of the cost arises from burning more gas. Just **15%** goes to the wind generator that is located on the ‘wrong’ side of the transmission bottleneck. In fact, sky-high gas prices mean curtailment costs are significantly higher on days with low wind curtailment compared to high curtailment days during periods of low gas pricing. Analysis of National Grid BM data by Drax, comparing a pre-Covid day in February 2020 with a gas-starved day in November 2021, illustrates this well: curtailed volumes were *significantly* *lower* in November but constraint payments were *drastically* *higher*. Compare these two charts (where ‘bid costs’ equate to wind curtailment payments, and ‘offer costs’ equate to CCGT fire-up payments): _This post is for paying subscribers only._ ### Space, time and electricity (part 2) URL: https://www.energyflux.news/space-time-and-electricity-part-2/ Last updated: 2025-05-14T15:05:05.000Z > *“We think it is credible to implement *nodal pricing* and *central dispatch* within five years.” – National Grid ESO, May 2022* [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/6d71a36c-bc37-457c-a989-eeb645c4c9bb_2400x1350-jpeg-1.jpg)](https://www.energyflux.news/) **The UK electricity system was designed for simpler times. When the so-called New Electricity Trading Arrangements (NETA) were introduced in 2001, the weather did not drive power generation. Demand was inflexible and highly predictable. Renewables accounted for less than 1% of the mix and consumers were passive recipients of electrons produced largely by baseload coal and nuclear power stations. Fast-forward two decades and NETA is in clear need of an update — and the system operator is pushing for ‘nodal pricing’. But what is it, and what does it entail?** ##### ***This is part two in a mini-series about proposals to introduce locational pricing in the UK electricity market. Part one is free to read*** [***here***](https://www.energyflux.news/p/space-time-and-electricity-part-1)***. This instalment, for premium members only, explains the concept of nodal pricing and central dispatch of electricity. Part three, looking at wind constraints payments in more detail, is*** [***here***](https://www.energyflux.news/p/space-time-and-electricity-part-3)***.*** ##### ***Article stats: 1,400 words / 3 graphics / 7-minute reading time*** _This post is for paying subscribers only._ ### Space, time and electricity (part 1) URL: https://www.energyflux.news/space-time-and-electricity-part-1/ Last updated: 2025-05-14T15:05:05.000Z DEEP DIVE: How should power prices be formed on a grid that is constraining renewables? _This post is for paying subscribers only._ ### Dissecting the ‘Iberian exception’ URL: https://www.energyflux.news/dissecting-the-iberian-exception/ Last updated: 2025-05-14T15:05:07.000Z Is the Spanish gas price cap a success or failure? _This post is for paying subscribers only._ ### Poland’s false sense of energy security URL: https://www.energyflux.news/polands-false-sense-of-energy-security/ Last updated: 2025-05-14T15:05:09.000Z Warsaw can cope without Russian gas, but for how long? _This post is for paying subscribers only._ ### EU electricity market reform on the cards? URL: https://www.energyflux.news/eu-electricity-market-reform-on-the/ Last updated: 2025-05-14T15:05:09.000Z Ursula von der Leyen, president of the European Commission, has performed a notable U-turn by admitting something that *Energy Flux* has been [saying](https://www.energyflux.news/p/eu-powerless-to-tame-prices-uk-energy?s=w) for some time: that price-setting arrangements in EU power markets are broken. She was [quoted](https://www.euractiv.com/section/electricity/news/eu-chief-announces-electricity-market-overhaul-amid-skyrocketing-prices/?ref=energyflux.news) as telling EU parliamentarians: > *“This market system does not work anymore. We have to reform it
 This is the task that the Commission has taken over now. This is not trivial, this is a huge reform. It will take time, it has to be well thought through. But we must step forward to adapt our electricity market to the modern conditions.”* I decided to flag this because her comments come just weeks after ACER, the EU’s Agency for the Cooperation of Energy Regulators, [concluded](https://www.energyflux.news/p/clear-as-mud?s=w) that the current design – using pay-as-clear (PAC) in power price auctions – is working well and “worth keeping”. Here’s my hot take on what a U-turn might mean in practice. _This post is for paying subscribers only._ ### The rain in Spain (part 2) URL: https://www.energyflux.news/the-rain-in-spain-part-2/ Last updated: 2025-05-14T15:05:11.000Z > *“Under no circumstances should it cost €320 (or even €100) to generate one megawatt-hour of electricity from a fully amortised utility-scale power station that repaid its construction costs many times over ago and has no fuel costs.” –* [*Energy Flux, May 2022*](https://www.energyflux.news/p/the-rain-in-spain-makes-gains-by?s=w) **The European Commission has** [**approved**](https://ec.europa.eu/commission/presscorner/detail/en/ip%5F22%5F3550?ref=energyflux.news) **a contentious Spanish and Portuguese measure to cap and subsidise fossil fuel-fired power generation. We are about to find out whether this creative intervention in** [**pay-as-clear (PAC)**](https://www.energyflux.news/p/clear-as-mud?s=w) **power markets will bring down costs for hard-pressed consumers. For that to happen, it will need to influence the curious bidding strategies of Spanish hydroelectric power stations – which *seem* to be** [**gaming the PAC price-setting system**](https://www.energyflux.news/p/the-rain-in-spain-makes-gains-by?s=w)**. If the cap succeeds, the rest of Europe will be clamouring to replicate the Iberian experiment. If it fails, PAC’s susceptibility to manipulation will be laid bare for all to see.** [Subscribe now](https://www.energyflux.news/subscribe) [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/6cb92899-a247-4131-ae98-f20e13987cd0_2200x1500-jpeg-1.jpg)](https://www.energyflux.news/) This article explains how the cap works, the effect it could/should have on day-ahead auctions in the Iberian power pool, and whether/by how much it will lower retail prices. Spoiler alert: on the latter, nobody really knows — but we will soon find out! First of all, let’s recap. As *Energy Flux* [reported in May](https://www.energyflux.news/p/the-rain-in-spain-makes-gains-by?s=w), hydropower plants are setting day-ahead prices in the Spanish power pool surprisingly frequently – much more often than combined cycle gas turbine (CCGT) power stations. This is curious because CCGTs must cover their fuel costs, while hydro has zero marginal running costs so *in theory* could bid at zero and take the clearing price set by (expensive) gas. When you consider that most (all?) Spanish hydro plants are fully amortised, the idea of ‘cheap’ hydro pushing power prices higher during a gas crisis seems perverse. The assertion that hydro plants are effectively gaming the system prompted one reader (a power trader) to offer this perspective: > *“If the plant is reservoir hydro, then water taken out now has to be balanced out against water taken out in the future. As such, the value of water today is linked the forward curve (similar to gas storage). This can become more or less pronounced dependent on whether water levels are above or below normal levels.* > > *“If they have too much water or they are confident in the weather forecast, they price it lower as there is no point having a full reservoir and then needing to dump the water. If they are in \[drought\] conditions, they have no choice but to price the water ‘high’.”* Spain is enduring severe drought conditions, so bad in fact that ghost towns are resurfacing decades after being flooded to make way for dammed hydro plants ([these photos](https://www.msn.com/en-us/weather/topstories/spanish-ghost-town-rises-from-the-depths-after-30-years/ss-AAR5pds?ref=energyflux.news) are quite incredible). Anyway, Spanish hydro reservoir levels are running well below the ten-year trailing average: ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/eaa86ee2-a52e-49a1-abb2-1d3b3203574c_560x250.png) *Prolonged drought is depleting hydro reserves. [Source](https://www.embalses.net/?ref=energyflux.news)* So, are hydro operators ‘gaming the system’ or bidding strategically to preserve water resources? And how might the gas price cap shake things up? Let’s break it down. ###### *Article stats: 2,050 words / 4 charts & graphs / 10-minute reading time* _This post is for paying subscribers only._ ### Tilting at windfall taxes (part 2) URL: https://www.energyflux.news/tilting-at-windfall-taxes-part-2/ Last updated: 2025-05-14T15:05:12.000Z UK government’s bid to claw back profits is riven with dubious trade-offs _This post is for paying subscribers only._ ### Profligacy amid scarcity URL: https://www.energyflux.news/profligacy-amid-scarcity/ Last updated: 2025-07-31T20:38:59.000Z The insanity of gas flaring during a global energy crisis _This post is for paying subscribers only._ ### 🧊 Drilling on thin ice đŸ›ąïž URL: https://www.energyflux.news/-drilling-on-thin-ice-/ Last updated: 2025-05-14T15:05:15.000Z DEEP DIVE: War, climate and energy crises are destabilising Russia’s grand plans for Arctic oil _This post is for paying subscribers only._ ### ❄Frozen out of a warming ArcticđŸ”„ URL: https://www.energyflux.news/-frozen-out-of-a-warming-arctic-/ Last updated: 2025-05-14T15:05:17.000Z DEEP DIVE: Is Russia losing its grip on Arctic energy resources? _This post is for paying subscribers only._ ### Expensive gas ≠ more LNG URL: https://www.energyflux.news/expensive-gas-more-lng/ Last updated: 2025-05-14T15:05:19.000Z Soaring costs curb European enthusiasm for US LNG _This post is for paying subscribers only._ ### ‘Carbon border taxes will set the pace of energy transition’ URL: https://www.energyflux.news/carbon-border-taxes-will-set-the/ Last updated: 2025-05-14T15:05:19.000Z PODCAST: With special guest Peter Sainsbury, founder of Carbon Risk newsletter _This post is for paying subscribers only._ ### The rain in Spain makes gains by playing games URL: https://www.energyflux.news/the-rain-in-spain-makes-gains-by/ Last updated: 2025-05-14T15:05:22.000Z [Last week’s newsletter](https://www.energyflux.news/p/clear-as-mud?s=w) on marginal pricing in EU electricity markets struck a chord. Quite a few readers got in touch, and one suggested I follow up with a piece about the Spanish and Portuguese plan to cap the wholesale price of electricity across the Iberian Peninsula. I’ve dug into it, and the story is much more interesting than is being reported in mainstream media. The high-level proposal from Madrid and Lisbon to cap thermal power generation at €40/€50 per MWh won [political approval](https://www.energymonitor.ai/policy/market-design/opinion-eu-leaders-need-to-be-ready-to-rethink-electricity-market-design?ref=energyflux.news) from European leaders in March and from the [European Commission](https://www.euronews.com/my-europe/2022/04/26/brussels-agrees-to-iberian-exception-allowing-spain-and-portugal-to-cap-electricity-prices?ref=energyflux.news) in April. A formal plan was submitted to Brussels [last weekend](https://financialpost.com/pmn/business-pmn/spain-submitted-proposal-on-gas-price-cap-to-eu-sanchez-says?ref=energyflux.news). The Spanish and Portuguese governments are expected to issue formal decrees [this Friday](https://www.reuters.com/business/energy/spain-approve-common-gas-price-cap-with-portugal-friday-govt-says-2022-05-10/?ref=energyflux.news). Spain and Portugal buy very little gas from Russia but are exposed to global gas pricing via LNG imports and, to some degree, via pipeline imports from North Africa. There is limited interconnection with the rest of Europe, so the Iberian Peninsula is something of an ‘energy island’. This is why the EC and other member states made the exception and acquiesced to a temporary Iberian cap. The information available suggests the one-year cap will apply only to electricity generated from coal and gas-fired power plants. In Spain, these are predominantly combined-cycle gas turbines (CCGTs). Since CCGTs have currently very high fuel prices, they tend to get priced out of ‘pay-as-clear’ power markets when supply of renewables exceeds power demand. And when they do run, they set the clearing price as the highest bidder in any given hourly segment in the Spanish power pool’s day-ahead market. The idea is that by capping gas-fired power at €40 per MWh initially, rising to €50 per MWh later, the clearing price in the Spanish power pool will be correspondingly lower whenever gas is the marginal price-setter. In order to prevent the CCGT operators from going bankrupt, the government will top up the difference between the cap and their actual running costs and charge this back to consumers via a levy on their bills. Consumers will still pay less on aggregate because every generator ahead of gas in the merit order will be paid only up to the €50 per MWh cap rather than the much higher prices in the pool these days (frequently >€200 per MWh). Academics [estimate](https://www.heraldo.es/noticias/economia/2022/05/08/entrevista-eduardo-bandres-catedratico-economia-aplicada-precio-electricidad-inferior-al-actual-1572560.html?ref=energyflux.news) the cap will immediately cut wholesale prices by 30% because gas is always the most expensive generator when it runs. Well, that’s how things *should* work. But data from Spanish power market operator OMIE tells a rather different story. This article digs into some bizarre goings-on in the Spanish power pool with the aid of numerous charts and graphs. The upshot is that the incoming price cap decree might not be as effective as billed by its proponents because **some generators seem to be gaming the system**. And if it does work, the Iberian cap will confirm that [**pay-as-clear auctions**](https://www.energyflux.news/p/clear-as-mud?s=w) **are far from ideal for setting wholesale power prices in markets with a diverse mix of technologies.** ###### Article stats: **8 charts & graphs | 2,200 words | 10-min reading time** _This post is for paying subscribers only._ ### Clear as mud URL: https://www.energyflux.news/clear-as-mud/ Last updated: 2025-05-14T15:05:23.000Z Why exactly is the EU so reticent about redesigning its failed energy markets? _This post is for paying subscribers only._ ### ‘China has been a defibrillator for the US gas industry’ URL: https://www.energyflux.news/china-has-been-a-defibrillator-for/ Last updated: 2025-05-14T15:05:23.000Z PODCAST: With special guest Clark Williams-Derry, IEEFA energy finance analyst _This post is for paying subscribers only._ ### American LNG diplomacy spread thin URL: https://www.energyflux.news/american-lng-diplomacy-spread-thin/ Last updated: 2025-05-14T15:05:25.000Z Europe’s wartime dash for non-Russian gas complicates US-China trade _This post is for paying subscribers only._ ### ‘It’s time to flip supplier incentives towards lower energy consumption’ URL: https://www.energyflux.news/its-time-to-flip-supplier-incentives/ Last updated: 2025-05-14T15:05:25.000Z PODCAST: With special guest Laura Sandys, CEO of Challenging Ideas _This post is for paying subscribers only._ ### Easter energy reading 🐣 URL: https://www.energyflux.news/easter-energy-reading-/ Last updated: 2025-05-14T15:05:26.000Z And some non-energy bits too _This post is for paying subscribers only._ ### Energy is becoming less affordable and less secure in the UK URL: https://www.energyflux.news/energy-is-becoming-less-affordable/ Last updated: 2025-05-14T15:05:27.000Z And the government doesn’t seem to care _This post is for paying subscribers only._ ### UK energy security strategy is a big flop URL: https://www.energyflux.news/hot-take-uk-energy-security-strategy/ Last updated: 2025-05-14T15:05:27.000Z HOT TAKE: Slow-burn supply-side solutions won't fix immediate crisis _This post is for paying subscribers only._ ### Infrastructure overkill? URL: https://www.energyflux.news/infrastructure-overkill/ Last updated: 2025-05-14T15:05:29.000Z Rush to build out EU LNG import capacity seems a bit flawed _This post is for paying subscribers only._ ### ‘Net zero is just the start. Carbon removal comes next’ URL: https://www.energyflux.news/net-zero-is-just-the-start-carbon/ Last updated: 2025-05-14T15:05:29.000Z PODCAST: With special guest Wake Smith, author and lecturer at Yale University _This post is for paying subscribers only._ ### Celebrating one year of ‘premium’ Energy Flux URL: https://www.energyflux.news/celebrating-one-year-of-premium-energy/ Last updated: 2025-05-14T15:05:30.000Z Lock in a huge lifetime discount on membership for a limited time only _This post is for paying subscribers only._ ### Caveat emptor! (part 2) URL: https://www.energyflux.news/caveat-emptor-part-2/ Last updated: 2025-05-14T15:05:31.000Z > *“Buyers should beware the pitfalls of making rash decisions in desperate circumstances.” –* [*Energy Flux, October 2021*](https://www.energyflux.news/p/caveat-emptor?s=w) [Subscribe now](https://www.energyflux.news/subscribe) **A source of constant tension in the energy world is the mismatch between long-term investment horizons and short-term market events. This tension is exacerbated by accelerating energy market volatility and, to some extent, the erosion of attention spans in the era of 24/7 social media news. That tension is now melting into anxiety and even panic amid the prospects of real, physical energy shortages in Europe should flows of Russian gas be disrupted. But is Europe about to strike a slew of American gas deals that will do nothing to alleviate imminent shortages while heaping future risks onto consumers?** ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/32db91d7-b9aa-446c-8d02-b3a73a9ad8a5_1280x825-jpeg-1.jpg) Russia’s invasion of Ukraine has focussed minds in the EU Commission, which has finally embraced the need to end its reliance on Russian gas with a concerted push to reduce energy demand, electrify heating, redouble renewables deployment and – crucially – diversify gas supply sources. On this latter point, the EU Commission seems prepared to dive headlong into new long-term supply contracts for liquefied natural gas (LNG) from the US, which is poised to become the world’s largest exporter of the fuel this year. The White House and Brussels last week launched a Task Force for Energy Security dedicated ostensibly towards sending more US LNG cargoes to Europe to mitigate against shortfalls in the event of a halt to Russian pipeline flows. The EU-US [joint statement](https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/25/joint-statement-between-the-united-states-and-the-european-commission-on-european-energy-security/?ref=energyflux.news) and accompanying [factsheet](https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/25/fact-sheet-united-states-and-european-commission-announce-task-force-to-reduce-europes-dependence-on-russian-fossil-fuels/?ref=energyflux.news) raise as many questions as they answer. The obvious shortcoming is that there is no means of sending more LNG to Europe this year without [depriving other regions](https://www.energyflux.news/p/theres-not-enough-gas-to-go-around?s=w), with all the attendant negative consequences. And new export projects will take 3-5 years to build. This article dissects the most significant elements of that EU-US framework agreement in the wider context of today’s extraordinary geopolitical tensions, energy policy upheaval and LNG project financing requirements. Finally, it asks whether this high-level political accord could translate into asymmetrical commercial deals that come back to haunt buyers when macro market conditions inevitably recede from the high watermark of today’s [astronomical energy prices](https://www.energyflux.news/p/fear-grips-eu-gas-trade?s=w). ###### *(Article stats: 2,400 words, 5 graphs/charts, 12-min reading time).* _This post is for paying subscribers only._ ### Energy transition = volatility (part 2) URL: https://www.energyflux.news/energy-transition-volatility-part/ Last updated: 2025-05-14T15:05:32.000Z Liberalisation and decarbonisation are a recipe for volatility _This post is for paying subscribers only._ ### Has Putin lost his roubles? URL: https://www.energyflux.news/has-putin-lost-his-roubles/ Last updated: 2025-05-14T15:05:33.000Z > *“When researchers provide the right answer to the wrong question.” – Definition of a* [*Type 3 error*](https://en.wikipedia.org/wiki/Type%5FIII%5Ferror?ref=energyflux.news) [Subscribe now](https://www.energyflux.news/subscribe) **We are about to find out how much Europe really needs Russian gas. Or more precisely, the lengths to which EU gas buyers are prepared to go to ensure their warmongering counterparty does not turn off the taps.** ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/d5e23d5a-86d2-4007-8d74-ef56c306f122_932x623-jpeg-1.jpg) Vladimir Putin’s [declaration](https://www.themoscowtimes.com/2022/03/23/putin-orders-europe-to-pay-rubles-for-russian-gas-a77053?ref=energyflux.news) on Wednesday that Russia will only accept roubles as payment for gas bought by “unfriendly” countries at first sounds like the utterance of a madman; an edict from a paranoid president who can’t see his big expansionist gamble won’t pay off. How can European companies acquire roubles when the Russian central bank itself is subject to sanctions? Ridiculous! And it is ridiculous. Only, the whole [EU gas situation](https://www.energyflux.news/p/gas-shock-europe-strategic-frailties?s=w) is ridiculous – and Putin’s latest gambit is a symptom of that. The EU gifted so much leverage to this narcissistic lunatic over the last two decades that it must now choose between either funding his murderous invasion of its own back yard *in a currency of his choosing*, or triggering a severe energy crisis that could bring down the entire post-war European project. Putin, like a child, is now testing the limits of EU tolerance. His calculation is that Russia’s relationship with Europe is asymmetrical. While there is clearly a co-dependency, it is lopsided — and some European leaders seem keen to remind him of this. German chancellor Olaf Scholz staunchly opposes sanctioning Russian gas, [telling the Bundestag](https://www.politico.eu/article/olaf-scholz-warns-against-russia-energy-embargo/?ref=energyflux.news) how painful it would be for Germany. The EU Commission’s [push](https://ec.europa.eu/commission/presscorner/detail/en/ip%5F22%5F1511?ref=energyflux.news) to [refill European gas stocks](https://www.energyflux.news/p/theres-not-enough-gas-to-go-around?s=w) to 90% by 1 October (now extended to 1 November) might give Putin extra comfort, as it would seem to indicate Europe will buy *more* Russian gas in the short term, not less. [Subscribe now](https://www.energyflux.news/subscribe) ## Legal distraction Arbitration lawyers must be salivating. Does stipulating a different payment currency constitute breach of contract? If so, do contracts need to be amended? If not, and EU gas buyers can’t buy roubles due to sanctions, does this constitute force majeure? The list of unanswerable legal questions is endless. Some answers lead to more tricky political questions. How does demanding roubles compare to the legality of an EU edict for companies to buy less gas from Gazprom than the contractual minimum? This is a red herring. Every gas supply contract will stipulate the penalty for non-purchase of gas. But if this charge becomes payable due to a political order, who pays it? The taxpayer? If so, how will electorates respond to being forced to fund Putin’s war *and* pay more for non-Russian gas? The type 3 error stems from trying to answer these questions. The real question is this: Is Europe ready to go without Russian gas? Ultimately, it is hard to see Putin’s bizarre intervention resulting in anything other than Gazprom cutting gas supplies. Making unreasonable demands is a means of goading European companies into making legally questionable moves, such as non-payment of take-or-pay penalties. This can be used in defence when the pipeline flow valves are fastened shut: ‘They didn’t pay, we had no choice.’ Putin’s motives are transparent and his willingness to cut supplies should not be doubted. Having gambled on the foolish big invasion itself, then all subsequent smaller gambles are worth making too. The Kremlin must be anticipating disruption to euro-denominated EU gas payments at some point, so there is little to lose from trolling European leaders. And we all know how much Putin enjoys [waging war inside people’s heads](https://www.smh.com.au/world/europe/putin-the-napoleon-of-the-internet-20220322-p5a6od.html?ref=energyflux.news). Get breaking news analysis straight to your inbox. Choose free or premium membership: ## More market madness Broken EU gas markets are struggling to price in this latest chapter of wartime political theatre. That means one thing: yet more volatility. Futures on the EU gas benchmark TTF duly spiked above €132/MWh (USD \~$44/MMBtu) on yesterday’s news: > To stay on top of the news, that's TTF April Gas up 20%, at 17100 rubles > > — Emeric de VIGAN (@Emericdevigan) [ 3:25 PM ∙ Mar 23, 2022 ](https://twitter.com/Emericdevigan/status/1506653463593291777?s=20&t=Y91zmicIAHt-AaaHSIiU4A&ref=energyflux.news)[](https://twitter.com/Emericdevigan/status/1506653463593291777?ref=energyflux.news) As is becoming the norm, these price movements are [detached from supply-demand fundamentals](https://www.energyflux.news/p/fear-grips-eu-gas-trade?s=w). Russian gas flows to Western Europe were largely flat day on day at \~217 million cubic metres per day (MCMD), according to Rystad Energy. Rystad senior analyst Vinicius Romano said: > *“Gas supply agreements are generally considered sacrosanct: and in an extreme scenario, insisting on Ruble payments may give buyers cause to re-open other aspects of their contracts – such as the duration – and simply speed up their exit from Russian gas altogether.* > > *“At face value this appears to be an attempt to prop up the Ruble by compelling gas buyers to buy the previously free-falling currency in order to pay. What is clear however, is that this has added another element of uncertainty to the already chaotic European gas market by complicating gas purchases that many countries have been reluctant to cut.”* Putin’s poser will again test European resolve. Scholz and his Italian counterpart Mario Draghi are both [reticent](https://italy.timesofnews.com/breaking-news/ukraine-update-italy-snubs-putin-on-rubles-nato-issues-warning?ref=energyflux.news), but EU leaders are seriously discussing whether to open avenues to buy roubles to pay for Russian gas. An immense amount of work would need to be done at the back end for this to become a reality. If rouble payments do transpire, European consumers will be both funding Putin’s war *and* ameliorating the worst impacts of Western sanctions against his regime. The question facing Berlin, Rome and other EU capitals is whether this is better than the alternative. If a cut-off is indeed inevitable, then why suffer the humiliation? **Seb Kennedy | Energy Flux | 24th March 2022** [Leave a comment](#ghost-comments-root) --- ### Related reading from *Energy Flux*: [There’s not enough gas to go aroundThey say that those who lack resources become resourceful. With an almighty global tussle brewing over scarce supplies of natural gas, the term ‘resourceful’ is about to take on new meaning. This summer, rich European nations will go head-to-head with poorer emerging Asian economies, with the highest bidder taking the spoils. This is an annual event tha
![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-411.png)Energy Flux](https://www.energyflux.news/p/theres-not-enough-gas-to-go-around) [Fear grips EU gas tradeNatural gas used to be known as the ‘champagne’ fuel, a luxury energy source that only wealthy nations could afford. Coal, by contrast, was ‘beer’ – the cheap and ubiquitous fuel of the masses. As the world plunges into a full-blown energy crisis that carries a tangible risk of physical supply shortages, liquefied natural gas cargoes are becoming as valuable as original Rembrandt, CĂ©zanne or Munch masterpieces.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-412.png)Energy Flux](https://www.energyflux.news/p/fear-grips-eu-gas-trade) [Global crisis looms“What is happening in the financial and asset markets defies adequate description.” – John Mangun The news agenda is moving almost too fast to analyse. It’s been a hectic week in commodities markets. This edition focusses on near-term market events but in scope goes beyond energy, because all the indicators suggest we are on the brink of a crisis that could eclipse the events of 2008-9 in breadth, depth and longevity of impact.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-413.png)Energy Flux](https://www.energyflux.news/p/global-crisis-looms) [Too much politics, not enough gasEuropean energy prices are going ballistic. Barely a day has gone by this month without wholesale gas and power prices breaking the previous day’s new all-time high. But what is really driving the bull run, what does it mean for decarbonisation, and how is this playing out in the political arena?![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-414.png)Energy Flux](https://www.energyflux.news/p/too-much-politics-not-enough-gas) ### ‘China won’t ride to Russia’s rescue’ URL: https://www.energyflux.news/china-wont-ride-to-russias-rescue/ Last updated: 2025-05-14T15:05:34.000Z PODCAST: With special guest Samuel Merlin, head of energy at Hannam & Partners _This post is for paying subscribers only._ ### There’s not enough gas to go around URL: https://www.energyflux.news/theres-not-enough-gas-to-go-around/ Last updated: 2025-05-14T15:05:34.000Z Will war-rattled Europe deprive emerging Asia of winter fuel and food? _This post is for paying subscribers only._ ### ‘Oil price volatility is crippling the energy transition’ URL: https://www.energyflux.news/oil-price-volatility-is-crippling/ Last updated: 2025-05-14T15:05:35.000Z PODCAST: With special guest Dan Dicker, oil market commentator and author _This post is for paying subscribers only._ ### Upcoming live podcasts URL: https://www.energyflux.news/upcoming-live-podcasts/ Last updated: 2025-05-14T15:05:35.000Z _This post is for paying subscribers only._ ### Global crisis looms URL: https://www.energyflux.news/global-crisis-looms/ Last updated: 2025-05-14T15:05:36.000Z [Subscribe now](https://www.energyflux.news/subscribe) > *“What is happening in the financial and asset markets defies adequate description.” –* [*John Mangun*](https://businessmirror.com.ph/2022/03/10/global-economic-collapse/?ref=energyflux.news) The news agenda is moving almost too fast to analyse. It’s been a hectic week in commodities markets. This edition focusses on near-term market events but in scope goes beyond energy, because all the indicators suggest we are on the brink of a crisis that could eclipse the events of 2008-9 in breadth, depth and longevity of impact. In this issue: đŸ’„*‘Homeless’ Russian oil goes into floating storage* đŸ’„*Oil market on cusp of catastrophe* đŸ’„*Nickel margin call points to wider commodities malaise* đŸ’„*Grain crunch stokes fears of Arab Spring 2.0* đŸ’„*Russian forces attack Ukraine’s gas transmission system* đŸ’„*Climate concerns confound EU-US LNG pact* 📰*Also worth reading* 💬*Tweet of the week* 💭*Final thought* ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-415.png) Read Energy Flux in the Substack appAvailable for iOS and Android[Get the app](https://substack.com/app/app-store-redirect?utm%5Fcampaign=app-marketing&utm%5Fcontent=author-post-insert&ref=energyflux.news) ## đŸ’„ ‘Homeless’ Russian oil goes into floating storage **Sanctions against Russian energy exports are yet to bite fully, but when they do the effects could be profound.** Russian seaborne crude exports were \~4.9 million barrels/d as of 9 March 2022, well within the 3.9-5.3 million b/d average range since the start of the year, according to Kpler. Buyers are pre-emptively shunning cargoes, but physical loadings of Russian crude oil are unchanged because more volumes are ending up on the water. The trend of ‘self-sanctioning’ is the prelude to greater disruption, which is ‘baked in’ now that the [US](https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/03/08/remarks-by-president-biden-announcing-u-s-ban-on-imports-of-russian-oil-liquefied-natural-gas-and-coal/?ref=energyflux.news) and [UK](https://www.yahoo.com/entertainment/uk-phasing-russian-oil-174750412.html?ref=energyflux.news) both banned imports of Russian oil. Kpler head of research Alex Booth had this to say: _This post is for paying subscribers only._ ### Fear grips EU gas trade URL: https://www.energyflux.news/fear-grips-eu-gas-trade/ Last updated: 2025-05-14T15:05:37.000Z ‘War premium’ makes LNG obscenely profitable – and too expensive to burn _This post is for paying subscribers only._ ### ‘Japan won’t divest from Russian energy assets’ URL: https://www.energyflux.news/japan-wont-divest-from-russian-energy/ Last updated: 2025-05-14T15:05:38.000Z PODCAST: With special guests Yuriy Humber and Mayumi Watanabe, Japan NRG _This post is for paying subscribers only._ ### The Great Russian Energy Divestment URL: https://www.energyflux.news/the-great-russian-energy-divestment/ Last updated: 2025-05-14T15:05:39.000Z [Subscribe now](https://www.energyflux.news/subscribe) **Western oil majors are fleeing Russia. Having bankrolled Moscow’s bellicose expansionism for years, Big Oil has finally taken the moral high ground. A fire sale of meaty assets looms, creating a golden opportunity for state-owned Chinese enterprises. Sanctions and divestments look set to trigger a great transfer of wealth from Western capital holdings to the People’s Republic of China.** [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/5a1b51e1-e173-42e7-8b23-6669063d7e8b_1280x719-jpeg-1.jpg)](https://www.energyflux.news/) [Get 7 day free trial](https://www.energyflux.news/subscribe) There is a [view](https://www.newsweek.com/eulogy-post-cold-war-world-order-opinion-1683719?ref=energyflux.news) going around that the West’s response to Russia’s brazen assault on Ukraine will herald a new world order. The opposite could be true: it will entrench the current one. The Russian banking system is collapsing under the weight of Western sanctions. The Russian state will deservedly become a financial pariah for many years, perhaps a generation, for its abominable actions in Ukraine. The slew of divestment announcements of recent days comes amid punitive sanctions meted out by Western powers against Moscow. **These actions could push Russia further into China’s orbit and undermine petrodollar hegemony.** Here’s how it’s unfolding. _This post is for paying subscribers only._ ### ‘LNG is an expensive way to keep the lights on. Cutting EU gas demand is now key’ URL: https://www.energyflux.news/lng-is-an-expensive-way-to-keep-the/ Last updated: 2025-05-14T15:05:39.000Z PODCAST: With special guest Steven Geiger of Innova Partners _This post is for paying subscribers only._ ### Germany’s seismic energy policy U-turn URL: https://www.energyflux.news/germanys-seismic-energy-policy-u/ Last updated: 2025-05-14T15:05:41.000Z Berlin finally comes off the fence. Now it faces some hard realities. _This post is for paying subscribers only._ ### The first casualty in war is perspective URL: https://www.energyflux.news/the-first-casualty-in-war-is-perspective/ Last updated: 2025-05-14T15:05:41.000Z **FIRST UP*: War has broken out on the continent of Europe. Russia, the world’s second biggest oil and gas producer, is being slammed by Western sanctions but there is no sign of de-escalation. Commodity markets are boiling over, fearful that carve-outs intended to protect global energy security will fail. This is my best effort at making sense of a very fluid moment in modern energy history.* - **BREAKOUT STORY*: If you want some reprieve from Ukraine-related coverage, I’m excited to be republishing a piece weighing up the many challenges facing Japan’s net zero push. The article was written by *Mayumi Watanabe*, a veteran energy writer/analyst who freelances for *Japan NRG Weekly*:* [Japan struggles for balance in pivot to renewablesLike many countries, Japan has to juggle the current reality of power supply with its net-zero goals. While there’s no going back to the primacy of fossil fuels, Japan is taking small steps to resolve immediate energy issues and hoping for a lucky break in future ‘dream’ technologies to meet its 2030 and 2050 emissions reduction commitments — but challe
![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-429.png)Energy Flux](https://www.energyflux.news/p/japan-struggles-for-balance-in-pivot) [Subscribe now](https://www.energyflux.news/subscribe) ***IN THIS EMAIL:*** đŸ’„***The first casualty in war is perspective*** - *The common ‘energy enemy’ tribalism* - *Russia’s leverage should nauseate Europeans* **đŸ’„*Clues in Kaliningrad point to imminent gas flow disruption*** - *‘Capitalism in times of war’* đŸ’„***Auf wiedersehen, Nord Stream 2*** - *Keep an eye on Nord Stream 1* - *LNG is no saviour* đŸ’„***Toxic co-dependency blurs sanctions red lines*** - *This war is paying for itself* [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/3ab23bae-4436-4e73-927e-e6f9713bf931_1200x747-jpeg-1.jpg)](https://www.energyflux.news/) [Subscribe now](https://www.energyflux.news/subscribe) # đŸ’„The first casualty in war is perspective **They say the first casualty in war is the truth. I think perspective falls first.** When the here and now is in giddying flux, short term priorities are crystallised at the expense of long-term clarity. As the world watches in abject horror at the events unfolding across Ukraine, Russia’s role as a major energy exporter to Europe is coming under intense scrutiny. This is adding rocket fuel to the already-heated energy transition debate. Well-worn arguments around the need to diversify European gas supply sources, reduce European gas demand, redouble deployment of renewables and revitalise domestic oil and gas production are all getting a wartime makeover. Zero-sum debates around the relative merits of one long-term solution versus another tend to be divisive and unedifying. That is true now more than ever. Vested interests tend to take different approaches to timescales in order to further their agendas. Last week’s [segment](https://www.energyflux.news/p/excessive-consumption-in-an-energy?utm%5Fsource=url) (*EU gas debacle polarises debate*) on the two op-eds arguing for ‘more gas now’ and ‘less gas tomorrow’ is a case in point. They are both right. But nobody has yet figured out how to resolve the inherent contradictions in taking a balanced approach. The task of reducing emissions, tackling burgeoning fuel poverty and maintaining industrial competitiveness was already difficult enough. The shock of war involving a major energy exporter to Europe introduces alarming new dimensions to the 5-D energy transition chess game. Now there is a risk of blackouts in parts of Europe and a global recession if Russian energy flows stop. To mitigate that risk, Western powers have given a free pass to energy exports from a regime that is invading a sovereign nation and [talking idly about nuclear warfare](https://apnews.com/article/russia-ukraine-vladimir-putin-europe-poland-nuclear-weapons-2503c0d7696a57db4f437c90d3894b18?ref=energyflux.news). ## The common ‘energy enemy’ is tribalism Europe has been[ at war with itself](https://www.energyflux.news/p/eu-tearing-itself-apart-over-nuclear?utm%5Fsource=url) over energy for years, because decarbonisation is riven with contradictions. How can the continent’s short-term energy needs be reconciled with long-term emissions objectives if there is no consensus that the common enemy is not *just* unaffordable *or* unreliable *or* dirty energy, but *all of those things, all over the world*? The outbreak of a very real hot war on the continent of Europe – and particularly the prospect of disruption to Russian gas supplies – should bring clarity of purpose to that transition. The danger is it does the opposite, and further polarises energy thinking into tribal silos. _This post is for paying subscribers only._ ### Japan struggles for balance in pivot to renewables URL: https://www.energyflux.news/japan-struggles-for-balance-in-pivot/ Last updated: 2025-05-14T15:05:43.000Z Infrastructure constraints confound efforts to close thermal power plants _This post is for paying subscribers only._ ### ‘Fixing methane leaks is plumbing, not rocket science’ URL: https://www.energyflux.news/fixing-methane-leaks-is-plumbing/ Last updated: 2025-05-14T15:05:43.000Z PODCAST: With special guest Jonathan Banks, international director, methane at the Clean Air Task Force _This post is for paying subscribers only._ ### Excessive consumption in an energy-scarce world URL: https://www.energyflux.news/excessive-consumption-in-an-energy/ Last updated: 2025-05-14T15:05:44.000Z [Subscribe now](https://www.energyflux.news/subscribe) **FIRST UP:** The energy transition must reconcile some daunting disparities. The delta between the energy-rich and energy-poor has never been wider. The same goes for the rhetoric-reality gap on emissions, which is driving extreme divergence in long-term energy forecasts. Declining energy availability only complicates matters further. A high-level discussion about these issues is right here in this email – as well as the latest twists in Europe’s sorrowful attempts to secure gas supplies, and how the debacle is being interpreted by the *commentatorati* 👇 - **BREAKOUT STORY:* I’ve been digging into the unusual results of the UK’s latest capacity auction, which subsidies standby power generators. What was supposed to be a straight analytical piece threw up a curious back-story about two mothballed gas-fired power plants. Getting to the bottom of it involved quizzing the UK government, regulator, system operator, consultants, company directors and even private lenders in Texas. This piece took about 15 hours to research, write and polish, but shouldn’t take more than about 7 minutes of your time to read. Click through to read:* [UK capacity subsidy balloons amid supply jittersUK electricity consumers will pay more than ever to keep the lights on next winter, after the latest capacity market auction cleared at a record price of ÂŁ75 per kilowatt per year. The result stems from an unusual UK government decision to subsidise all participating generators, citing market uncertainty. The British power market has experienced extreme volatility in recent months and faces the prospect of enduring tight winter supply margins — and yet two modern gas-fired power stations appear to have been excluded.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-432.png)Energy Flux](https://www.energyflux.news/p/uk-capacity-subsidy-balloons-amid) **IN THIS EMAIL:** đŸ’„*Excess + scarcity = inequality + uncertainty* - *Unstoppable energy profligacy* - *Extreme energy inequality* - *Unfathomable demand uncertainty* đŸ’„*Gas is Europe’s Achilles’ heel* - *Theatrical gas talks* đŸ’„*EU gas debacle polarises debate* đŸ“ș *Quote of the week* 🌎*Global headlines by key topic (20+ curated links)* 🧠**Energised minds:* ‘We must avoid carbon tunnel vision’* --- # đŸ’„Excess + scarcity = inequality + uncertainty Last Friday’s [deep dive](https://www.energyflux.news/p/scraping-the-barrel) explored the concept of ‘surplus energy’, i.e. the net energy available to society after deducting the energy cost of producing it. Data suggest net energy is falling due to declining energy returns on energy investment (EROI), itself attributable to depletion and the switch to lower-quality shale resources. As we slip down the EROI ‘energy cliff’, we will – gradually then suddenly – enter an *energy-scarce* world. With this in mind, three unrelated research papers caught my eye this week. They explore (a) *excessive* energy consumption in the UK, (b) global energy and emissions *inequalities*, and (c) widening oil demand *uncertainty*. Viewed through the lens of energy *scarcity*, my high-level interpretation of the findings is as follows: - Excessive consumption by a tiny influential ‘polluter-elite’ is unstoppable and increasing - This trend must be reversed, otherwise ‘net zero’ becomes unachievable - Extreme energy inequality is self-perpetuating. Any policies that drive up energy costs will exacerbate this feedback loop - The emissions rhetoric-reality gap is confusing forecasters, leading to unprecedented divergence in energy demand outlooks - This underplays the chances of soaring demand, which could prevail over artificial constraints (i.e. emissions targets) – but not physical constraints (i.e. diminishing surplus energy) So, let’s dive in. _This post is for paying subscribers only._ ### UK capacity subsidy balloons amid supply jitters URL: https://www.energyflux.news/uk-capacity-subsidy-balloons-amid/ Last updated: 2025-05-14T15:05:46.000Z [Subscribe now](https://www.energyflux.news/subscribe) **UK electricity consumers will pay more than ever to keep the lights on next winter, after the latest capacity market auction cleared at a record price of ÂŁ75 per kilowatt per year. The result stems from an unusual UK government decision to subsidise all participating generators, citing market uncertainty. The British power market has experienced extreme volatility in recent months and faces the prospect of enduring tight winter supply margins — and yet two modern gas-fired power stations appear to have been excluded. *Energy Flux* investigates.** [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/2a2d15da-8b83-4a6d-8a04-c684f7a809f1_1920x1280-jpeg-1.jpg)](https://www.energyflux.news/) The T-1 auction [procured](https://www.emrdeliverybody.com/Capacity%20Markets%20Document%20Library/T-1%20DY%202022-23%20Provisional%20Capacity%20Auction%20Report%20v1.0.pdf?ref=energyflux.news) almost 5 GW of capacity for availability during the 2022-23 winter. The vast majority of these are gas-fired turbines (3.4 GW), plus some coal (41 MW), batteries (385 MW) and demand-side response (515 MW). There was also a small amount of energy-from-waste, oil, diesel, pumped storage and even an 11 MW onshore wind farm in the mix. The T-1 auction is an annual affair that contracts small amounts of capacity for the following winter. Much larger volumes are procured four years in advance in the T-4 auction. T-1 usually awards the vast majority of capacity to existing generators, but in this case it will rely on 1,365 MW of newbuild units. This is much more than the newbuild capacity contracted in the previous two T-1 tenders combined. The clearing prices for the two previous T-1 auctions were also much lower, at **ÂŁ45/kW/year** for [winter 2021-22](https://www.emrdeliverybody.com/Capacity%20Markets%20Document%20Library/Capacity%20Market%20Auction%20T1%20DY21-22%20Final%20Results.pdf?ref=energyflux.news) and just **ÂŁ1/kW/year** for [winter 2020-21](https://www.emrdeliverybody.com/Capacity%20Markets%20Document%20Library/Final%20Results%20T-1%20Auction%20DY20-21.pdf?ref=energyflux.news): [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/a80f3f9e-5400-4bc7-ba54-7153ff7485c7_1234x423-jpeg.jpg)](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/https-3a-2f-2fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984-s3-amazonaws-com-2fpublic-2fimages-2fdc1aa227-d000-4e21-a521-dcee9bfee8bc%5F1354x428-jpeg-1.jpg?ref=energyflux.news) The reason for this week’s expensive result is energy secretary Kwasi Kwarteng’s surprise [decision](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment%5Fdata/file/1049359/capacity-market-auction-parameters-2022.pdf?ref=energyflux.news) in January to set a target volume of 5,361 MW for the 2022-23 auction – a figure in excess of the 5,166 MW of plant capacity registered to participate. Bidding cleared instantly in the first round and every participating bidder was awarded a capacity market agreement at the maximum price, i.e. the cap of ÂŁ75 – meaning this ‘auction’ was really nothing of the sort. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/820f48b6-d5c7-4cf6-891b-95b680317dda_1380x489-jpeg.jpg) Source: [EMR Delivery Body](https://www.emrdeliverybody.com/Capacity%20Markets%20Document%20Library/T-1%20DY%202022-23%20Provisional%20Capacity%20Auction%20Report%20v1.0.pdf?ref=energyflux.news) The chart above shows a vertical line instead of the more typical ‘demand curve’ of a competitive auction. In the previous two T-1 auctions, only 53% and 38% of bidders emerged successful after several rounds of competitive bidding to establish the clearing price. Those auction demand curves turned out like this: [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/cc118948-e0cb-4cf1-946f-74602eda1e8c_1496x601-jpeg.jpg)](https://www.emrdeliverybody.com/Capacity%20Markets%20Document%20Library/Final%20Results%20T-1%20Auction%20DY20-21.pdf?ref=energyflux.news) [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/059a555a-5650-44b1-b87c-539dd7d3e436_1260x546-jpeg.jpg)](https://www.emrdeliverybody.com/Capacity%20Markets%20Document%20Library/Capacity%20Market%20Auction%20T1%20DY21-22%20Final%20Results.pdf?ref=energyflux.news) [Subscribe now](https://www.energyflux.news/subscribe) ## Ministerial edict The Secretary of State sets the target capacity in each auction after taking advice from UK power system operator National Grid ESO. The system operator had [advised](https://www.emrdeliverybody.com/Capacity%20Markets%20Document%20Library/2021%20CM%20Update%20to%20Demand%20Curve%20T-1%202022-23.pdf?ref=energyflux.news) he set a target volume of 4,700 MW. Kwarteng’s response, which one analyst [described as a “shock”](https://www.current-news.co.uk/news/government-sets-5-361gw-cm-target-for-t-1-in-shock-move-that-will-see-all-assets-bought-at-75-kw-yr?ref=energyflux.news), stated the following (emphasis added): > *“I have decided to set a target volume of 5.361GW for the T-1 auction for delivery in 2022/23, an increase on your recommended target of 4.7GW. While I agree with the analysis you provided
 this target *reflects the broader uncertainties within the power sector*.”* Kwarteng did not elaborate on what those uncertainties might be. A spokesperson for his department, BEIS, told *Energy Flux*: _This post is for paying subscribers only._ ### Deciphering the EU’s hydrogen ambitions URL: https://www.energyflux.news/deciphering-the-eus-hydrogen-ambitions/ Last updated: 2025-05-14T15:05:46.000Z PODCAST: With special guest Rachel Parkes, editor of Gas Matters _This post is for paying subscribers only._ ### France says ‘oui’ to new nuclear URL: https://www.energyflux.news/france-says-oui-to-new-nuclear/ Last updated: 2025-05-14T15:05:47.000Z **FIRST UP:** France has finally turned the page on aspirations to reduce its reliance on **nuclear power**, and will be cutting some very big cheques to revive the troubled sector – and its debt-ridden state sponsor, EDF. That’s right here in this email, along with other stories about the **US-Iran nuclear talks**, **carbon dioxide storage**, **electric lithium mining** and lots more 👇 - **BREAKOUT STORY:* Japan is in an energy pickle. Faced with increasing energy import dependency and exposure to global commodity volatility, Tokyo might come to regret its decision to emulate the UK’s experiment with energy market deregulation. That’s this week’s [breakout story](https://www.energyflux.news/p/japan-follows-uk-down-the-deregulation) (5-min read):* [Japan follows UK down the deregulation rabbit-holeI once interviewed a Japanese economist in Tokyo about Japan’s energy market deregulation agenda. I asked him which country or market Japanese government officials looked to as an example of successful electricity and gas market liberalisation. Without hesitating, he said: “The UK.”![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-438.png)Energy Flux](https://www.energyflux.news/p/japan-follows-uk-down-the-deregulation) **IN THIS EMAIL:** đŸ’„*France says ~~non~~ ‘oui’ to new nuclear* đŸ’„*US courts Qatar as Iran interlocutor* đŸ’„*CCS success hinges on the ‘S’* đŸ’„*Canadian lithium miner dreams electric* đŸ“ș *Quote of the week* 🌎*Global headlines by key topic (20+ curated links)* 🧠**Energised Minds:* ‘Beware the energy transition’s looming valley of death’* --- # đŸ’„ France says ‘*oui’* to new nuclear **Despite never-ending setbacks, nuclear power never loses its allure.** An abundant source of zero-carbon baseload power generation that reduces reliance on energy imports is the Holy Grail of the energy transition – if you can just get comfortable with spiralling costs and market-melting outages. With a re-election bid looming, French president Emmanuel Macron has come round to this view and categorically reversed the energy policy platform upon which he campaigned for office. Macron yesterday [promised](https://www.france24.com/en/europe/20220210-announcing-new-reactors-macron-puts-nuclear-power-at-heart-of-carbon-neutral-push?ref=energyflux.news) to build a new generation of French nuclear reactors and extend the operational life of existing plants. This means shoring up the finances of debt-ridden state-run EDF, which is enduring the double-whammy of cost overruns at flagship newbuild nuclear projects in the UK, China and Finland and reduced atomic power generation at home. The continuing poor performance of the French nuclear fleet is one of many thorns in EDF’s side. _This post is for paying subscribers only._ ### Japan follows UK down the deregulation rabbit-hole URL: https://www.energyflux.news/japan-follows-uk-down-the-deregulation/ Last updated: 2025-05-14T15:05:48.000Z [Subscribe now](https://www.energyflux.news/subscribe) I once interviewed a Japanese economist in Tokyo about Japan’s energy market deregulation agenda. I asked him which country or market Japanese government officials looked to as an example of successful electricity and gas market liberalisation. Without hesitating, he said: “The UK.” [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/729a6415-9df9-49b6-9f7a-13cd556cd72c_5760x3840-jpeg-1.jpg)](https://www.energyflux.news/) Britain’s experiment with privatisation in the 1980s, followed by successive bouts of energy market reform throughout the 2000s and 2010s, became a global reference. Unbundling vertically integrated monopolies and exposing incumbents to upstream/generation and retail competition was seen as a winning formula. Cutting the red tape unleashed market efficiencies, which lowered prices for end consumers — until energy markets crunched, that is. I wonder what the Japanese economist would make of the [implosion of the UK energy retail segment](https://www.energyflux.news/p/uk-found-with-trousers-around-ankles). Regulator Ofgem last week approved an eye-watering 54% increase in the retail price cap, which will push millions of households towards energy poverty. Further rises are expected in October, and with increasing frequency thereafter to keep up with an erratic market. The regulator was caught between competing priorities: protect customers, or allow loss-making suppliers to recover ballooning wholesale costs from consumers. After bailing out major independent utility Bulb, political appetite for further intervention is low. Ofgem chose to hike the cap to prevent further supplier failures. Cue much [hot air from politicians](https://www.mirror.co.uk/news/politics/chancellor-rishi-sunak-blames-typo-26150260?ref=energyflux.news) (although sadly not enough to keep the homes of energy-poor Britons warm this winter). The 2021-22 winter won’t be a one-off. As I’ve written about elsewhere, **the combination of liberalisation and decarbonisation is a** [**recipe for volatility**](https://www.energymonitor.ai/policy/market-design/opinion-liberalisation-and-decarbonisation-are-a-recipe-for-volatility?ref=energyflux.news). The switch to short-term market-based gas pricing slashed billions of dollars off European import costs over the past decade, only for those savings to be almost entirely wiped out in a matter of months when global LNG prices spiked last autumn. Wholesale gas and power prices remain inflated and the cost to consumers will keep stacking up until the market cools off and losses are settled. > I don't know if folks understand the INSANITY of European gas prices. Maybe the quote in € per MWh is not intuitive. Here is the data in dollars per barrel. Brent hit $146/bbl in 2008 and EVERYONE freaked out. TTF has traded 94 DAYS (!) above $146/bbl. THIS ISN’T NORMAL! > > — Nikos Tsafos (@ntsafos) [ 3:01 AM ∙ Feb 9, 2022 ](https://twitter.com/ntsafos/status/1491245856817053698?s=20&t=bW4DkXpAMKGuCshmj-cEkg&ref=energyflux.news)[](https://twitter.com/ntsafos/status/1491245856817053698?ref=energyflux.news) [Subscribe now](https://www.energyflux.news/subscribe) ## Red tape meltdown Regulators and politicians will need to get used to making difficult trade-offs as the energy transition progresses, and not just in liberalised UK or European markets. Import-dependent Japan is facing the same challenges. All of Japan’s 10 regional utilities [slashed their earnings estimates](https://www.reuters.com/business/energy/japan-utilities-reel-some-more-than-others-sky-high-fuel-prices-hit-earnings-2022-02-01/?ref=energyflux.news) for this business year on soaring oil, gas and coal prices. Japan arrived late to the deregulation party, thanks partly to the physical segmentation of its power grid into two distinct networks running at different frequencies, and the lack of interconnection between regional natural gas distribution networks. These barriers perpetuated the natural monopolies presided over by state-run or municipal utilities. ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/cf61d36e-63e2-4a58-8598-7570bad76ec6_842x595.png) Japan’s partitioned power grid. Source: [Karn Bulsuk](https://www.bulsuk.com/2011/04/why-electricity-cant-be-transferred.html?ref=energyflux.news) / [Freemap](http://english.freemap.jp/?ref=energyflux.news) _This post is for paying subscribers only._ ### ICYMI: Russia and Ukraine — where did it all go so wrong? URL: https://www.energyflux.news/icymi-russia-and-ukraine-where-did/ Last updated: 2025-05-14T15:05:48.000Z PODCAST: With special guest Simon Pirani, energy researcher & historian _This post is for paying subscribers only._ ### Scraping the barrel URL: https://www.energyflux.news/scraping-the-barrel/ Last updated: 2025-05-14T15:05:50.000Z DEEP-DIVE: We need to talk about energy return on energy investment (EROI) _This post is for paying subscribers only._ ### ‘Europe’s gas dilemma isn’t going away’ URL: https://www.energyflux.news/europes-gas-dilemma-isnt-going-away/ Last updated: 2025-05-14T15:05:50.000Z PODCAST: With special guest Ira Joseph, head of pricing at S&P Global _This post is for paying subscribers only._ ### Floating wind gets serious URL: https://www.energyflux.news/floating-wind-gets-serious/ Last updated: 2025-05-14T15:05:51.000Z **FIRST UP:** Floating offshore wind power is going mainstream, and Scotland is where it’s happening. Success could open up virgin offshore wind markets around the world, but only if technical challenges are overcome. That’s right here in this (rather long!) email 👇 **BREAKOUT STORY:* Europe will need a lot of natural gas for many years while it decarbonises, but is lacking a coherent strategy to meet residual demand during the transition. That’s this week’s* [*breakout story*](https://www.energyflux.news/p/gas-shock-europe-strategic-frailties) *(10-min read):* [Gas shock exposes Europe’s strategic frailtiesHow much natural gas will Europe need over the next 20 years, and from where? As the winter crisis eases, tricky questions abound. European politicians are pointing fingers at Gazprom amid surging energy poverty. The Nord Stream 2 soap opera has been sidelined by US-Russia crunch talks over Ukraine and NATO. EU climate ambition and LNG imports have never been higher. What exactly![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-443.png)Energy Flux](https://www.energyflux.news/p/gas-shock-europe-strategic-frailties) **IN THIS EMAIL:** đŸ’„*Heavyweights pile into floating wind energy* đŸ’„*Oil is heading back to $100 this year* đŸ’„*ExxonMobil ignores ‘Scope 3’ siren* đŸ’„*UK government silent on windfall taxes* đŸ’„*Lithium mining proves too divisive for Serbia* đŸ“ș *‘Quote of the week’* 🌎*Global headlines by key topic (20+ curated links)* 🧠*‘Can EU-ETS free allocation help decarbonise industry?’* --- # đŸ’„ Heavyweights pile into floating wind Floating wind turbines offer the potential to open up vast offshore wind resources in waters too deep for conventional seabed-mounted units. The engineering that makes this possible is advancing quickly, and demonstrator trials are validating commercial viability – assisted by dramatic scaling up of conventional offshore turbine technology towards 20 MW units that promise to drive down project costs. The challenge for this segment lies in overcoming the increasing complexity that comes with larger turbines. Sure, 20 MW units means fewer turbines leaving fabrication yards to capture the same resource. But these truly mammoth machines will require extraordinarily complex mooring systems, particularly when deployed in very deep waters. “While costs are coming down, floating projects are increasingly becoming much more capital intensive,” says analytics firm Quest Floating Wind Energy. Developers are responding to this by pursuing turnkey engineering solutions to simplify their supply chains and narrow their focus. Sector progress can be measured by the kinds of companies leading it. No longer is development spearheaded by technology companies seeking to prove the worth of their intellectual property. The latest Scottish offshore wind licencing round unveiled incredible appetite from technology-agnostic project developers backed by some of the world’s biggest energy companies and investors. _This post is for paying subscribers only._ ### Gas shock exposes Europe’s strategic frailties URL: https://www.energyflux.news/gas-shock-europe-strategic-frailties/ Last updated: 2025-05-14T15:05:53.000Z Winter crisis eases but energy transition woes persist _This post is for paying subscribers only._ ### ‘Don’t blame ESG for high oil & gas prices’ URL: https://www.energyflux.news/dont-blame-esg-for-high-oil-and-gas/ Last updated: 2025-05-14T15:05:53.000Z PODCAST: With special guest Arjun Murti, equity analyst and author of Super-Spiked _This post is for paying subscribers only._ ### Tilting at windfall taxes URL: https://www.energyflux.news/why-a-windfall-tax-on-energy-producers/ Last updated: 2025-05-14T15:05:53.000Z **FIRST UP:** Windfall taxes are always popular because they conveniently shift blame onto ‘greedy corporations’. The energy industry is often painted as the villain, but clawing back excessive earnings made at the expense of consumers is easier said than done. That’s right here in this email 👇 **BREAKOUT STORY:* Energy is such a divisive issue in the EU that even a soporific bureaucratic exercise to determine which sources are deemed ‘green’ is opening up deep political schisms. That’s this week’s* [*breakout story*](https://www.energyflux.news/p/eu-green-taxonomy-descends-into-farce) *(5-min read):* [EU taxonomy descends into farceThe European Commission wants to include natural gas in the EU taxonomy for sustainable investment, but under impossibly stringent conditions that stand little chance of being met. This is shaping up to be a spectacular double own goal for Brussels that triggers energy ‘culture wars’ while delivering no discernible benefit to anybody.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-447.png)Energy Flux](https://www.energyflux.news/p/eu-green-taxonomy-descends-into-farce) **IN THIS EMAIL:** đŸ’„ *Why a windfall tax on energy producers won’t happen* - *The tax man’s short arms* - *Tilting at windfalls* - *No easy targets* - *Developers go YOLO on wholesale risks* đŸ’„*The need for an honest decarbonisation debate* - *Lessons from Germany’s coal transition* - *Irish politicians recoil at hard truths* đŸ’„*China secures more Russian LNG as Europe demurs over gas* 🌎*Global headlines by key topic (20+ curated links)* 🧠*Energised minds: ‘If we believed our own climate rhetoric, support for nuclear would be much higher’* # đŸ’„Why a windfall tax on energy producers won’t happen The two major beneficiaries from the UK energy crunch are upstream oil and gas producers, and power generators that receive a subsidy on top of exorbitant wholesale power prices. With consumers staring down the barrel of swingeing utility bill increases from April, there is a growing clamour for windfall taxes – but the question of precisely where excessive profits are being made is devilishly complicated in both cases. _This post is for paying subscribers only._ ### EU taxonomy descends into farce URL: https://www.energyflux.news/eu-green-taxonomy-descends-into-farce/ Last updated: 2025-05-14T15:05:54.000Z [Subscribe now](https://www.energyflux.news/subscribe) **The European Commission wants to include natural gas in the EU taxonomy for sustainable investment, but under impossibly stringent conditions that stand little chance of being met. This is shaping up to be a spectacular double own goal for Brussels that triggers energy ‘culture wars’ while delivering no discernible benefit to anybody.** [Get 14 day free trial](https://www.energyflux.news/subscribe) ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/b2a7947d-f657-4afd-b3e2-82e91bd1661a_1280x744-jpeg-1.jpg) At a high level, the taxonomy is struggling to reconcile what is desirable with what is necessary. A 100% renewable future is the goal, but getting there means leaning on gas (and nuclear) for some time. How to square that circle? Create a loophole! It’s sure to please ~~everyone~~ no-one! The taxonomy will define those energy projects officially deemed “sustainable”, and direct investments towards them. A leaked draft seen by *Energy Flux* creates a new category for “transitional” activities, so long as they adhere to strict greenhouse gas (GHG) emissions limits. Gas-fired power stations will qualify if they meet one of two criteria: _This post is for paying subscribers only._ ### How long will this energy crunch last? URL: https://www.energyflux.news/podcast-how-long-will-this-energy/ Last updated: 2025-05-14T15:05:55.000Z PODCAST: With special guest John Kemp, senior energy analyst at Reuters _This post is for paying subscribers only._ ### Podcast with John Kemp, Reuters senior energy analyst URL: https://www.energyflux.news/tonight-podcast-with-john-kemp-reuters/ Last updated: 2025-05-14T15:05:55.000Z _This post is for paying subscribers only._ ### Negative wind subsidies help cash-strapped UK energy suppliers URL: https://www.energyflux.news/negative-wind-subsidies-help-cash/ Last updated: 2025-05-14T15:05:56.000Z The Contract for Difference mechanism is easing the big squeeze on retailers _This post is for paying subscribers only._ ### Energy Flux yearbook: 2021 URL: https://www.energyflux.news/energy-flux-yearbook-2021/ Last updated: 2025-05-14T15:05:57.000Z Deep-dives written as Covid bust turned to commodities boom _This post is for paying subscribers only._ ### There’s more than one comet URL: https://www.energyflux.news/theres-more-than-one-comet/ Last updated: 2025-05-14T15:05:58.000Z Don’t *just* look up. Look sideways too _This post is for paying subscribers only._ ### EU tearing itself apart over nuclear, gas, carbon and Russia URL: https://www.energyflux.news/eu-tearing-itself-apart-over-nuclear/ Last updated: 2025-05-14T15:05:58.000Z Plus: Coal burn breaks records, lithium = kryptonite + MORE _This post is for paying subscribers only._ ### EU embraces wasteful hydrogen blending URL: https://www.energyflux.news/eu-embraces-wasteful-hydrogen-blending/ Last updated: 2025-05-14T15:05:58.000Z New framework to decarbonise gas markets is riddled with compromise and capitulation _This post is for paying subscribers only._ ### Podcast: Why energy market volatility is here to stay URL: https://www.energyflux.news/podcast-why-energy-market-volatility/ Last updated: 2025-05-14T15:05:59.000Z Listen again to the latest episode with special guest Rachel Parkes, editor of Gas Matters _This post is for paying subscribers only._ ### EU and US energy fortunes diverge, but for how long? URL: https://www.energyflux.news/eu-and-us-energy-fortunes-diverge/ Last updated: 2025-05-14T15:05:59.000Z **LEAD STORY**: Europe and the US are facing very different energy markets this winter. Europe is exposed to global forces and geopolitical power plays, while the US is insulated by its huge shale production base. But political headwinds and low reinvestment rates are eroding America’s safety margin. That’s right here in this email 👇 - **BREAKOUT STORY*: Oil and gas investment is simultaneously way too high and dangerously low. Irreconcilable energy and climate objectives are leading us towards a very messy transition. Click below to read more (5-minute read):* [Energy transition = volatilityTwo contrasting papers this week threw into sharp relief just how irreconcilable energy market stability and climate change mitigation can be. A brewing investment crisis threatens to spill over into a genuine energy supply crisis that could make the extreme market events of late 2021 look like a mere blip in hindsight. A huge hike in upstream oil and gas investment this decade would stave off the threat, but at untold environmental cost.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-459.png)Energy Flux](https://www.energyflux.news/p/energy-transition-volatility) **IN THIS EMAIL:** đŸ’„*EU and US energy fortunes diverge, but for how long?* - *EU-Russia toxic co-dependency* - *Making LNG reliable* - *America’s shale shock absorber* đŸ’„*Science-led group formed to debunk hydrogen ‘hopium’* 🌎*Global headlines by key topic (20+ links)* 🧠*‘The EU must regulate methane for imported oil and gas’* --- # đŸ’„EU and US energy fortunes diverge, but for how long? Wherever you dare to look, alarm bells are ringing in European energy markets. The amount of gas in underground storage facilities is running [perilously low](https://www.reuters.com/business/energy/european-gas-stocks-deplete-rapidly-cold-start-winter-kemp-2021-12-08/?ref=energyflux.news) for this early stage of winter. A cold snap that coincided with another wind lull sent gas futures and carbon prices soaring to fresh records, harming businesses and the environment. Sweden, the poster-child of European decarbonisation, this week briefly [fired up](https://www.nasdaq.com/articles/swedish-oil-power-plant-ran-5-hours-on-monday-to-curb-flows-from-poland?ref=energyflux.news) a very polluting heavy fuel oil power plant to help keep the lights on in Poland. In Germany, the energy retail segment is starting to show the same cracks that caused a [spate of bankruptcies in the UK](https://www.energyflux.news/p/uk-found-with-trousers-around-ankles). Several small gas suppliers have ceased trading recently: Gas.de last week [terminated](https://www.gas.de/?ref=energyflux.news#top) fixed price gas supply contracts across Rhineland-Palatinate which had been rendered loss-making by a 400% year-on-year “explosion” in wholesale costs. That came after fellow suppliers Rheinische ElektrizitĂ€ts and Otima Energy went bankrupt, with the latter citing not only wholesale market turmoil but also the “[elimination](https://www.otima-energie.ag/?ref=energyflux.news)” of certain undisclosed power generators that it relies on to meet electricity distribution commitments. Otima said it was unable to replace the lost generators, a problem that is presumably not going to disappear after Germany’s new coalition government agreed to [accelerate](https://www.energyflux.news/p/greedy-us-natural-gas-producers-face) the country’s coal exit to 2030 – eight years earlier than outgoing chancellor Angela Merkel’s policy. This new target, together with Germany’s nuclear exit, will leave a capacity deficit of 41 GW or more depending on the rate of heat and transport electrification, according to [Timera](https://timera-energy.com/the-urgent-need-for-german-flex/?ref=energyflux.news). The immediate crisis facing Europe’s winter energy supplies is a baptism of fire for the ‘traffic light coalition’ in Berlin, and casts a long shadow over its decarbonisation ambitions. December gas futures on Dutch hub TTF rose 40% in November, dragging German baseload power up 53%, according to Swiss energy trader Axpo. Maintaining focus on 2030 is tricky when so much could go wrong between now and February. Andy Sommer, an analyst at Axpo, said in a note that the early cold snap, combined with low generation from wind, hydro and French nuclear, will prolong the call on coal-fired power plants – with implications for EU carbon prices: _This post is for paying subscribers only._ ### Energy transition = volatility URL: https://www.energyflux.news/energy-transition-volatility/ Last updated: 2025-05-14T15:06:00.000Z Oil and gas investment is simultaneously way too high and dangerously low _This post is for paying subscribers only._ ### Big Oil’s painful offshore wind pivot URL: https://www.energyflux.news/big-oils-painful-offshore-wind-pivot/ Last updated: 2025-05-14T15:06:01.000Z DEEP-DIVE: European oil majors throw caution to the wind by embracing razor-thin margins _This post is for paying subscribers only._ ### ‘Greedy’ US natural gas producers face political heat URL: https://www.energyflux.news/greedy-us-natural-gas-producers-face/ Last updated: 2025-05-14T15:06:01.000Z **FIRST UP:** The Biden administration’s release of oil from the **Strategic Petroleum Reserve** captured the headlines this week, but the move is one big distraction. Releasing the equivalent of ten *hours* of global oil consumption over a matter of *weeks* was never going to dent a hyper-bullish oil market. The debate around the SPR release prompted speculation that the White House could ban oil exports in a bid to tame gasoline prices over Thanksgiving. This would probably backfire spectacularly: US refiners cannot immediately shift operations to receive and process the lighter grades of crude produced in the US, potentially leading to fuel shortages. In this case, wiser heads prevailed. But now there are early signs that calls to **halt or** **curb exports of natural gas** are gaining traction among prominent Democratic lawmakers. That’s the lead story right here in this issue. 👇 - **ICYMI:* Woodside Energy has finally pulled the trigger on *Scarborough LNG,* Australia’s first new liquefied natural gas project in a decade, and shouldered a tonne of market risk in the process. Could this prove to be a pyrrhic victory for Woodside, and if so what does it say about the gas industry’s ability to meet rising demand for their fuel? That’s this week’s* [*breakout story*](https://www.energyflux.news/p/woodside-goes-it-alone-on-scarborough) *(7Âœ minute read):* [Woodside goes it alone on Scarborough LNGNot even a global gas shortage can convince investors to put their faith in newbuild liquefied natural gas projects, it seems. Australia’s Woodside Energy made big, risky concessions with private equity financiers to get its flagship Scarborough LNG project off the drawing board. Scarborough is a drop in the global LNG ocean, but the trouble faced by Woodside to get this far speaks volumes about the challenges of building greenfield plants today.![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-464.png)Energy Flux](https://www.energyflux.news/p/woodside-goes-it-alone-on-scarborough) **IN THIS EMAIL:** đŸ’„*Warren turns up heat on ‘greedy’ US natural gas producers* đŸ’„*Cold snap puts Russia’s Arctic hydrocarbons dreams on ice* đŸ’„*Coal blamed for ‘unnecessary’ wind power curtailment* đŸ’„*Germany gets serious about coal-to-clean via gas* đŸ’„*UK leans on gas peakers as energy crisis claims biggest scalp yet* 🌎**Global headlines* by key topic (20+ links)* 🧠**Energised minds:* ‘Stop trying to get Big Oil to accelerate the energy transition’* # đŸ’„Warren turns up heat on ‘greedy’ US natural gas producers I wrote recently that the Biden administration is [unlikely to cap LNG exports](https://www.energyflux.news/p/americas-lng-growing-pains), but an intervention from Democratic Senator Elizabeth Warren suggests the political winds \*might\* be shifting. Warren has written to “greedy” energy companies asking why they are exporting record volumes of natural gas while domestic prices rise for American consumers. She might find their answers a little embarrassing. US LNG exports were actively promoted by the Obama-Biden administration, which issued the first export licences to Gulf Coast liquefaction projects. Her [letter](https://www.warren.senate.gov/newsroom/press-releases/warren-turns-up-the-heat-on-big-energy-companies-greed-as-they-jack-up-natural-gas-prices-exporting-record-amounts-to-boost-profits-while-americans-foot-the-bill?ref=energyflux.news) is a real gem. She blames major upstream gas producers for not selling gas below market price to utilities and industrial consumers while forking out on bonuses, share buybacks and dividends. Perhaps she should also be asking energy-intensive consumers and city gas suppliers why they chose not to hedge their exposure to global price movements. The serious question is this: Could pressure from Warren and other Democrats convince the Biden administration to cap or curb US LNG exports using powers enshrined in the Natural Gas Act? If the White House decides exports are no longer in the public interest, things could get messy. Most at risk are operators that export LNG to countries without a free trade agreement with the US. The Natural Gas Act requires gas exports to non-FTA countries to pass a ‘public interest’ legal test. If it fails, export authorisation can be revoked. Non-FTA countries are the biggest recipients of US LNG and, as the Industrial Energy Consumers of America (IECA) told *Energy Flux* recently, are “the same countries that often create barriers to the importation of US manufactured goods”: _This post is for paying subscribers only._ ### Woodside goes it alone on Scarborough LNG URL: https://www.energyflux.news/woodside-goes-it-alone-on-scarborough/ Last updated: 2025-05-14T15:06:02.000Z Luring investment into greenfield gas projects is tough, even in a gas-starved world _This post is for paying subscribers only._ ### Cheap, abundant ‘clear’ hydrogen – too good to be true? URL: https://www.energyflux.news/cheap-abundant-clear-hydrogen-too/ Last updated: 2025-05-14T15:06:03.000Z Plus: Carbon border taxes, nuclear-to-gas, Oz coal & solar woes + MORE _This post is for paying subscribers only._ ### The moral conundrum of carbon border taxes URL: https://www.energyflux.news/the-moral-conundrum-of-carbon-border/ Last updated: 2025-05-14T15:06:04.000Z Will a carbon trade war help or hinder the energy transition? _This post is for paying subscribers only._ ### COP26 must close the rhetoric gap without creating a supply gap URL: https://www.energyflux.news/cop26-must-close-the-rhetoric-gap/ Last updated: 2025-05-14T15:06:05.000Z **BREAKOUT STORY**: Electricity is not a globally traded commodity for a reason. But world leaders are now backing a project to change that: the Green Grids Initiative (6-minute read): [Will the world ever have a single unified power grid?A highly ambitious initiative to roll out a worldwide web of electricity interconnectors to trade solar and wind power across continents and time zones won high-profile backing at COP26 this week. The ‘One Sun One World One Grid’ concept is beguilingly simple, but implementing it promises to be anything but. The initiative is gaining traction, yet the s
![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/25128294-e926-479c-990f-e3863a34ca36_200x200-474.png)Energy Flux](https://www.energyflux.news/p/will-the-world-ever-have-a-single) **IN THIS EMAIL**: **đŸ’„** *COP26 must close the ‘rhetoric gap’ without creating a supply gap* đŸ’„*Global methane pledge falls short on scope and substance* **đŸ’„** *US regulations show promise but gas flaring still overlooked* đŸ’„*UK regulatory loophole worsens air quality* đŸ’„*North-east US punished by lack of gas pipelines, archaic legislation* 🌎*Global headlines by key topic (40+ links)* **🧠** *‘Pitting technological solutions versus behavioural change is a false dichotomy’* _This post is for paying subscribers only._ ### Will the world ever have a single unified power grid? URL: https://www.energyflux.news/will-the-world-ever-have-a-single/ Last updated: 2025-05-14T15:06:05.000Z **A highly ambitious initiative to roll out a worldwide web of electricity interconnectors to trade solar and wind power across continents and time zones won high-profile backing at COP26 this week. The ‘One Sun One World One Grid’ concept is beguilingly simple, but implementing it promises to be anything but. The initiative is gaining political traction, yet the scope for complications is huge. *Energy Flux* takes a high-level look.** [Subscribe now](https://www.energyflux.news/subscribe) [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/49c8cf36-ba50-428c-a570-9e9fdca1c47a_1280x852-jpeg-1.jpg)](https://www.energyflux.news/) The Green Grids Initiative (GGI), which has been quietly gathering momentum since 2014, envisages transcontinental trading of “sun, wind and water” energy. The headline ambition is no less than to power the entire world with renewable sources, 24/7/365, and improve energy access along the way. At COP26 this week, India and the UK pledged “cooperation” and convened a “bilateral coalition” to help make GGI a reality. Countries from Africa, Asia, Europe and the Americas have pledged some degree of support to GGI. > *“There is more than enough clean energy to power the world economy, if we build the right grids. A tiny fraction of the world’s deserts, the equivalent of a square 400 km X 400 km (250 miles X 250 miles), covered with solar power stations, could produce all the electricity the world uses today. Wind power has similar potential.” –* [*Green Grids Initiative*](https://a5a850c1-2915-4b8e-80e0-17ccf27092dc.filesusr.com/ugd/67825b%5Fa48f9eca3ca245898b15343b87a5603f.pdf?ref=energyflux.news) Wind and solar fluctuations could be balanced by hydro dams and batteries, but security of supply would require new long-distance grids to connect energy-rich locations with demand centres, GGI’s backers say. > *“This trading is already beginning to happen through discrete bilateral and regional arrangements. But to meet the sheer scale of the challenge, these efforts need to be brought together and supplemented to create a more inter-connected global grid. We call this vision: One Sun One World One Grid.” –* [*India-UK declaration*](https://preview.thenewsmarket.com/Previews/GREE/DocumentAssets/597729.pdf?ref=energyflux.news) Until recently, GGI was focussed on improving regional connections and energy access. The involvement of India has melded the initiative with the more ambitious One Sun One World One Grid (OSOWOG) concept, which Prime Minister Narendra Modi adopted as a signature cause at COP26. The conjoined GGI-OSOWOG initiative would require expanded and modernised national and regional ‘smart grids’, complemented with a rapid scale-up of mini-grids and off-grid solar solutions. OSOWOG could be seen as akin to joining up disparate 20th century transmission and distribution networks into the electrical equivalent of the internet: a globally connected network allowing every household, parking lot and industrial facility to generate and consume power as required. Since smart grids are at the heart of this web of ‘prosumers’, OSOWOG is essentially proposing deep integration of the internet with a single global power network. Electricity would become synonymous with information. ## Where there’s political will
 GGI-OSOWOG is a truly transnational and decentralised initiative, which is exactly the approach needed to tackle rising global emissions. However, since we don’t have a global government, global currency or global regulator, it will be up to individual nations to put in place the legislation, regulation and finance required. There is a limit to the distance over which electrons can be transmitted before losses render grid infrastructure economically unviable. Each ‘bit’ of a global network would succeed or fail on its own merits. One promoter of GGI-OSOWOG told *Energy Flux* they are seeking political buy-in to the concept. Details will be tackled later. There is already much grassroots work underway to improve interconnectedness and electrification around the world. “We aren’t trying to reinvent the wheel,” says Lucy Pearson, programme manager at the Climate Parliament, which helps coordinate GGI. She said: > *“We are accelerating and supporting existing efforts and bringing people together who might not have been talking previously. A massive part of that is \[fostering\] political will to get this done. Much of the last five years have been about convincing ministers and heads of state that this is a good idea.”* The OSOWOG element of GGI is the most challenging to realise. How can legacy systems be connected with neighbours in a way that is fair, without penalising consumers in one region or overly-rewarding others? How do you protect stable electricity markets when connecting them to unstable ones? Pearson was a little coy on these points. ## Big ambitions, big hurdles Any transcontinental supergrid hinges on trading electricity cost effectively over extremely long distances. But electricity has not evolved into a globally traded commodity because it is not easily stored or transported. The [world’s longest](https://www.nsenergybusiness.com/projects/belo-monte-rio-de-janeiro-uhvdc-transmission-project/?ref=energyflux.news) transmission line spans 2,539 km in Brazil. The longer the distance, the higher the voltage to mitigate line losses arising from [Ohm’s Law](https://byjus.com/physics/ohms-law/?ref=energyflux.news). So there are limits. Transmission and distribution losses are today material, averaging more than 8% of all power generated worldwide, according to the World Bank. Losses are greatest in poorest nations, while advanced economies enjoy the lowest rates of loss. [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/41c72609-6218-4fbb-b2ba-be6039c416b3_742x455-jpeg.jpg)](https://data.worldbank.org/indicator/EG.ELC.LOSS.ZS?end=2014&most%5Frecent%5Fvalue%5Fdesc=true&start=1960&view=map&year=2014&ref=energyflux.news) Electricity transmission and distribution losses (% of output). Source: [World Bank](https://data.worldbank.org/indicator/EG.ELC.LOSS.ZS?end=2014&most%5Frecent%5Fvalue%5Fdesc=true&start=1960&view=map&year=2014&ref=energyflux.news) Power markets vary greatly around the world. Connecting grids with wide variations in power frequency, reliability, losses, pricing/subsidy mechanisms or legacy infrastructure will be tricky. International power trading is commonplace today, although this tends to be between countries at similar levels of market maturity. Deregulation seems to be a prerequisite. This means breaking up state monopolies and introducing competition in the generation, transmission and supply segments. Take as an example the Nordic power exchange Nord Pool in 1996\. Nord Pool emerged from the deregulation of _This post is for paying subscribers only._ ### America’s LNG growing pains URL: https://www.energyflux.news/americas-lng-growing-pains/ Last updated: 2025-05-14T15:06:07.000Z DEEP DIVE: Manufacturers are howling at expensive gas. Activists clamour to ‘leave it in the ground’. Yet soaring exports seem unstoppable _This post is for paying subscribers only._ ### Caveat emptor! URL: https://www.energyflux.news/caveat-emptor/ Last updated: 2025-05-14T15:06:07.000Z Beware the perils of signing long-term energy deals under duress + MORE _This post is for paying subscribers only._ ### Inflation and volatility roil green PPA market URL: https://www.energyflux.news/inflation-and-volatility-roil-green/ Last updated: 2025-05-14T15:06:08.000Z Corporations urged to lock in power prices as wind and solar costs soar _This post is for paying subscribers only._ ### EU powerless to tame prices đŸ’„ UK energy crisis deepens URL: https://www.energyflux.news/eu-powerless-to-tame-prices-uk-energy/ Last updated: 2025-05-14T15:06:09.000Z Plus: Expensive gas = expensive hydrogen, scarcity erodes trade barriers, bitcoin ‘revolutionising’ energy + MORE _This post is for paying subscribers only._ ### Expensive gas = expensive hydrogen URL: https://www.energyflux.news/expensive-gas-expensive-hydrogen/ Last updated: 2025-05-14T15:06:09.000Z Green hydrogen is now cheaper than grey or blue — or is it? _This post is for paying subscribers only._ ### Demand destruction stalks Europe URL: https://www.energyflux.news/demand-destruction-stalks-europe/ Last updated: 2025-05-14T15:06:10.000Z What does the energy crunch teach us about the energy transition? _This post is for paying subscribers only._ ### Energy crunch goes global URL: https://www.energyflux.news/energy-crunch-goes-global/ Last updated: 2025-05-14T15:06:10.000Z Decarbonisation ambition is colliding with market realities _This post is for subscribers only._ ### China declares energy bidding war URL: https://www.energyflux.news/china-declares-energy-price-war/ Last updated: 2025-05-14T15:06:11.000Z Plus: ‘The decarbonisation horse is out of the barn’ – interview with Ardour Capital and New American Energy _This post is for paying subscribers only._ ### ‘The decarbonisation horse is out of the barn’ URL: https://www.energyflux.news/the-decarbonisation-horse-is-out/ Last updated: 2025-05-14T15:06:11.000Z INTERVIEW: Walter Nasdeo of Ardour Capital and Nick Rohleder of New American Energy discuss market volatility, energy inflation and investment trends _This post is for paying subscribers only._ ### Don’t blame eco-activists for EU energy crunch *yet* URL: https://www.energyflux.news/dont-blame-eco-activists-for-eu-energy/ Last updated: 2025-05-14T15:06:12.000Z Plus: Gas surge exposes UK’s frail energy retail market, Russia’s motives laid bare + MORE _This post is for paying subscribers only._ ### UK energy suppliers caught swimming naked URL: https://www.energyflux.news/uk-found-with-trousers-around-ankles/ Last updated: 2025-05-14T15:06:13.000Z Gas price spike reveals parlous state of UK’s deregulated energy retail market _This post is for paying subscribers only._ ### UK wind subsidies go negative URL: https://www.energyflux.news/uk-wind-subsidies-go-negative/ Last updated: 2025-05-14T15:06:14.000Z Plus: Putin’s gas-fired power play, stranded asset risks exaggerated + MORE _This post is for paying subscribers only._ ### Too much politics, not enough gas URL: https://www.energyflux.news/too-much-politics-not-enough-gas/ Last updated: 2025-05-14T15:06:15.000Z Dissecting the European energy crunch _This post is for paying subscribers only._ ### Net zero ain’t happening and CCS won’t save us URL: https://www.energyflux.news/net-zero-aint-happening-and-ccs-wont/ Last updated: 2025-05-14T15:06:16.000Z Plus: Natural gas pricing itself out of the transition, Texas embraces gas-fired bitcoin mining, Russia’s bold helium play + MORE _This post is for paying subscribers only._ ### Natural gas is its own worst enemy URL: https://www.energyflux.news/natural-gas-is-its-own-worst-enemy/ Last updated: 2025-05-14T15:06:17.000Z Big Oil’s heralded ‘bridge fuel’ is pricing itself out of the energy transition _This post is for paying subscribers only._ ### Afghanistan’s mineral bounty đŸ’„ Big Oil’s chemical high URL: https://www.energyflux.news/afghanistans-mineral-bounty-big-oils/ Last updated: 2025-05-14T15:06:18.000Z Plus: Governments bankroll dubious hydrogen projects, the escalating cost of decarbonisation, Equinor ‘trolls’ EU gas market + MORE _This post is for paying subscribers only._ ### Big Oil’s chemical high URL: https://www.energyflux.news/big-oils-chemical-high/ Last updated: 2025-05-14T15:06:19.000Z Covid swells petrochemical earnings at ExxonMobil, Shell and Total _This post is for paying subscribers only._ ### Woodside’s high-stakes BHP merger URL: https://www.energyflux.news/woodsides-high-stakes-bhp-merger/ Last updated: 2025-05-14T15:06:20.000Z DEEP-DIVE: Scarborough LNG is go, decommissioning liabilities be damned _This post is for paying subscribers only._ ### UK sidesteps hydrogen culture wars URL: https://www.energyflux.news/uk-sidesteps-hydrogen-culture-wars/ Last updated: 2025-05-14T15:06:20.000Z Plus: Woodside’s high-stakes BHP merger, coal prices surge but asset valuations flop, US battery capacity races ahead + MORE _This post is for paying subscribers only._ ### Going weekly URL: https://www.energyflux.news/going-weekly/ Last updated: 2025-05-14T15:06:21.000Z In search of a sustainable publishing schedule... _This post is for paying subscribers only._ ### Blue hydrogen ‘dirtier than natural gas’ URL: https://www.energyflux.news/ipcc-turns-up-the-heat-on-energy/ Last updated: 2025-05-14T15:06:22.000Z Plus: IPPC & Rethinking Climate Change, Exxon’s inertia, pipeline risks spook insurers + MORE _This post is for paying subscribers only._ ### Brazil’s onshore oil renaissance URL: https://www.energyflux.news/brazils-onshore-oil-renaissance/ Last updated: 2025-05-14T15:06:23.000Z DEEP-DIVE: The energy transition is roiling oil prices, favouring short-cycle investments _This post is for paying subscribers only._ ### The greenwashing of LNG URL: https://www.energyflux.news/the-greenwashing-of-lng/ Last updated: 2025-05-14T15:06:23.000Z PLUS: US midstream goes green, producing hydrogen offshore, inflation erodes wind profits + MORE _This post is for paying subscribers only._ ### The glaring problem with ‘carbon neutral’ LNG URL: https://www.energyflux.news/the-glaring-problem-with-carbon-neutral/ Last updated: 2025-05-14T15:06:24.000Z The LNG industry is rushing to offset emissions before tackling its own gas flaring problem. Now is the time for action, not greenwashing, says Capterio _This post is for paying subscribers only._ ### Oil Search loses its way URL: https://www.energyflux.news/oil-search-loses-its-way/ Last updated: 2025-05-14T15:06:25.000Z ALSO: LNG industry sullies ‘net zero’, Chevron’s CCS flop + MORE _This post is for paying subscribers only._ ### Last week in đŸ’„Energy FluxđŸ’„ URL: https://www.energyflux.news/last-week-in-energy-flux-29d/ Last updated: 2025-05-14T15:06:26.000Z Your Monday morning rundown of the big stories moving the energy transition needle _This post is for subscribers only._ ### Forestry offsets on fire, literally | Peak fossil power | Germany’s dash for gas + MORE URL: https://www.energyflux.news/forestry-offsets-on-fire-literally/ Last updated: 2025-05-14T15:06:26.000Z đŸ’„Energy FluxđŸ’„Monday, 19th July 2021 _This post is for paying subscribers only._ ### EU’s green fuels strategy | hybrid gas-electric heating | coal’s comeback + MORE URL: https://www.energyflux.news/eus-green-fuels-strategy-hybrid-gas/ Last updated: 2025-05-14T15:06:27.000Z đŸ’„Energy FluxđŸ’„Friday, 16th July 2021 _This post is for paying subscribers only._ ### Is the EU tipping the scales against green fuel imports? URL: https://www.energyflux.news/is-the-eu-tipping-the-scales-against/ Last updated: 2025-05-14T15:06:27.000Z [Get 30 day free trial](https://www.energyflux.news/subscribe) **The EU is planning an unprecedented rollout of renewable power generation capacity this decade, which could exacerbate supply-demand grid imbalances. Mass deployment of electrolysers would flatten the peaks, so prioritising domestic production of ‘green’ hydrogen over imports would make strategic sense for Brussels — and that is exactly what the Commission appears to be doing in its landmark energy and climate policy proposal.** [![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/cd5ff1fc-fdb1-4d36-9f48-cfec034f4c51_640x374-jpeg-1.jpg)](https://www.energyflux.news/subscribe) Photo by [Christian Lue](https://unsplash.com/@christianlue?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/europe-map?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) There was a lot to unpack following the unveiling of the European Commission’s sprawling ‘[fit for 55](https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/delivering-european-green-deal%5Fen?ref=energyflux.news)’ policy suite on 14th July. The full ramifications on commodity prices, power markets, trade, investment, geopolitics and domestic EU politics cannot be known at this stage and will take years to play out. Merely summarising all the proposals would fill an entire newsletter. But one aspect leapt out: the potential for EU regulations to make it that bit harder to import ‘green’ fuels into the bloc. The ‘fit for 55’ measures could place non-EU producers of green/blue hydrogen and ammonia at a disadvantage to EU-based rivals. If this is indeed the case, it could hurt importers of products that contain these chemicals too. The package added meat to the bones of the so-called [Carbon Border Adjustment Mechanism](https://ec.europa.eu/commission/presscorner/detail/en/qanda%5F21%5F3661?ref=energyflux.news), under which importers pay at the border the cost of CO2 embedded in their products. It also explained how CBAM would interact with an expanded [Emissions Trading System](https://ec.europa.eu/commission/presscorner/detail/en/qanda%5F21%5F3542?ref=energyflux.news) (ETS). The CBAM will apply initially only to imports of cement, iron and steel, aluminium, fertilisers and electricity. But the [regulations](https://ec.europa.eu/info/sites/default/files/carbon%5Fborder%5Fadjustment%5Fmechanism%5F0.pdf?ref=energyflux.news) suggest that ammonia and possibly hydrogen could be included later (see Table 7-2 on page 79 of [this PDF](https://ec.europa.eu/info/sites/default/files/carbon%5Fborder%5Fadjustment%5Fmechanism%5F0.pdf?ref=energyflux.news)): ![](https://storage.ghost.io/c/d3/1f/d31fc047-a554-4540-b828-ca4f401e235d/content/images/2025/05/ec805bde-1ba1-426e-b185-321797a21b91_625x311-jpeg.jpg) Officials need to know the embedded emissions of both H2 and NH3 in order to calculate the carbon content of CBAM-eligible products that contain them. For example, low-carbon fertiliser (where ‘green’ ammonia is a crucial ingredient); and ‘green’ steel or aluminium made using hydrogen derived from renewables. This would mean that importers of these products would pay the going rate for carbon allowances on the ETS for their CO2 content. Furthermore, the European Commission is [proposing](https://ec.europa.eu/commission/presscorner/detail/en/fs%5F21%5F3676?ref=energyflux.news) to include the production of hydrogen with electrolysers under the ETS, “making renewable and low-carbon facilities eligible for free allowances”. ### Direction of travel It is not clear the extent to which these measures would impact the economics of imported green fuels and products compared to those manufactured within the EU. Since the ‘green’ and ‘blue’ varieties by definition have a much lower carbon content than chemical substances and products derived from unabated fossil fuels, the difference might be negligible. It is very hard to tell at this early stage. However, one thing is clear. _This post is for paying subscribers only._ ### Supersizing green fuels | Fit for 55 | A new use for coal? + MORE URL: https://www.energyflux.news/supersizing-green-fuels-fit-for-55/ Last updated: 2025-05-14T15:06:28.000Z đŸ’„Energy FluxđŸ’„Wednesday, 14th July 2021 _This post is for paying subscribers only._ ### Green ammonia seeks economies of scale URL: https://www.energyflux.news/green-ammonia-seeks-economies-of/ Last updated: 2025-05-14T15:06:28.000Z Supersized Australian mega-project drives down costs in bid to displace dirty existing fuels _This post is for paying subscribers only._ ### Covid, oil demand and energy equity | Loss-making coal | CO2 border taxes + MORE URL: https://www.energyflux.news/covid-oil-demand-and-energy-equity/ Last updated: 2025-05-14T15:06:29.000Z đŸ’„Energy FluxđŸ’„Monday, 12th July 2021 _This post is for paying subscribers only._ ### Putting the Covid oil crash in context URL: https://www.energyflux.news/putting-the-covid-oil-crash-in-context/ Last updated: 2025-05-14T15:06:29.000Z 2020 marked a mere blip on humanity’s meteoric rise in energy demand _This post is for paying subscribers only._ ### ‘Constraining oil supply is key to cutting demand’ URL: https://www.energyflux.news/constraining-supply-is-key-to-cutting/ Last updated: 2025-05-14T15:06:30.000Z INTERVIEW: Follow This founder Mark van Baal talks exclusively to đŸ’„Energy FluxđŸ’„ _This post is for paying subscribers only._ ### Q&A: Mark van Baal, founder of Follow This URL: https://www.energyflux.news/q-and-a-mark-van-baal-founder-of/ Last updated: 2025-05-14T15:06:30.000Z _This post is for paying subscribers only._ ### Last week in đŸ’„Energy FluxđŸ’„ URL: https://www.energyflux.news/last-week-in-energy-flux-ead/ Last updated: 2025-05-14T15:06:31.000Z _This post is for subscribers only._ ### Moore’s law and renewables, blue hydrogen hurts LNG project + MORE URL: https://www.energyflux.news/moores-law-and-renewables-blue-hydrogen/ Last updated: 2025-05-14T15:06:31.000Z đŸ’„Energy FluxđŸ’„Friday, 2nd June 2021 _This post is for paying subscribers only._ ### Moore’s law doesn’t apply to renewables URL: https://www.energyflux.news/are-renewable-cost-reductions-bottoming/ Last updated: 2025-05-14T15:06:32.000Z Positive feedback loops won’t propel wind and solar down the cost curve indefinitely, study warns _This post is for paying subscribers only._ ### 100% renewable US grid, DC makes a comeback + MORE URL: https://www.energyflux.news/100-renewable-us-grid-dc-makes-a/ Last updated: 2025-05-14T15:06:32.000Z đŸ’„Energy FluxđŸ’„Wednesday 30th June 2021 _This post is for paying subscribers only._ ### US can run on 100% renewable power – but should it? URL: https://www.energyflux.news/the-us-power-grid-can-run-on-100/ Last updated: 2025-05-14T15:06:33.000Z New paper quantifies the costs of a 100% RE power mix _This post is for paying subscribers only._ ### Last week in đŸ’„Energy FluxđŸ’„ URL: https://www.energyflux.news/last-week-in-energy-flux-0ea/ Last updated: 2025-05-14T15:06:34.000Z A quick rundown of the big stories moving the energy transition needle _This post is for subscribers only._ ### Shell’s short term thinking, US methane regs, cash-starved shale + MORE URL: https://www.energyflux.news/shells-short-term-thinking-us-methane/ Last updated: 2025-05-14T15:06:34.000Z đŸ’„Energy FluxđŸ’„Monday 28th June 2021 _This post is for paying subscribers only._ ### Shell’s short-term thinking URL: https://www.energyflux.news/big-oil-is-winning-the-market-battle/ Last updated: 2025-05-14T15:06:35.000Z Big Oil is winning the market battle, but losing the climate war _This post is for paying subscribers only._ ### Republicans’ climate contortions, AI batteries, pricey green ammonia + MORE URL: https://www.energyflux.news/conservative-climate-caucus-ai-batteries/ Last updated: 2025-05-14T15:06:36.000Z đŸ’„Energy FluxđŸ’„Friday 25th June 2021 _This post is for paying subscribers only._ ### US Republicans want to have their climate cake and eat it URL: https://www.energyflux.news/us-republicans-want-to-have-their/ Last updated: 2025-05-14T15:06:36.000Z The Conservative Climate Caucus peddles the fantasy of quick-fix solutions to the energy trilemma _This post is for paying subscribers only._ ### BP denies over-paying for UK wind, global CO2 price, zero-carbon steel + MORE URL: https://www.energyflux.news/bp-denies-paying-wind-premium-zero/ Last updated: 2025-05-14T15:06:37.000Z đŸ’„Energy FluxđŸ’„Wednesday 23rd June 2021 _This post is for paying subscribers only._ ### ‘We didn’t pay a premium’ – BP URL: https://www.energyflux.news/we-didnt-pay-a-premium-bp/ Last updated: 2025-05-14T15:06:37.000Z CEO Bernard Looney denies overpaying for Irish Sea offshore wind leases _This post is for paying subscribers only._ ### Geothermal goes mainstream, India’s hydrogen haste + MORE URL: https://www.energyflux.news/geothermal-goes-mainstream-indias/ Last updated: 2025-05-14T15:06:38.000Z đŸ’„Energy FluxđŸ’„Monday 21st June 2021 _This post is for paying subscribers only._ ### Bringing geothermal to the masses URL: https://www.energyflux.news/bringing-geothermal-to-the-masses/ Last updated: 2025-05-14T15:06:39.000Z CausewayGT believes innovation can turn this niche resource into mainstream clean heat solution _This post is for paying subscribers only._ ### Solar PV cost inflation, Big Oil’s ‘emissions intensity’ ruse + LOTS MORE URL: https://www.energyflux.news/solar-pv-cost-inflation-big-oils/ Last updated: 2025-05-14T15:06:39.000Z đŸ’„Energy FluxđŸ’„Thursday 17th June 2021 _This post is for paying subscribers only._ ### Solar PV enters uncertain new chapter URL: https://www.energyflux.news/solar-pv-enters-uncertain-new-chapter/ Last updated: 2025-05-14T15:06:40.000Z Driving out forced labour and embedded emissions from supply chains will hike module costs _This post is for paying subscribers only._ ### Equinor clings to ‘emissions intensity’ targets URL: https://www.energyflux.news/equinor-clings-to-emissions-intensity/ Last updated: 2025-05-14T15:06:40.000Z But more shareholders want to see absolute CO2 reductions _This post is for paying subscribers only._ ### NOCs’ painful renewables pivot, Volcano-powered bitcoin + MORE URL: https://www.energyflux.news/nocs-painful-renewables-pivot-volcano/ Last updated: 2025-05-14T15:06:42.000Z đŸ’„Energy FluxđŸ’„Friday 11th June 2021 _This post is for paying subscribers only._ ### El Salvador gets hot for bitcoin URL: https://www.energyflux.news/el-salvador-gets-hot-for-bitcoin/ Last updated: 2025-05-14T15:06:42.000Z Central American country to harness volcanic energy to mine cryptocurrency, which it now accepts as legal tender alongside the US dollar _This post is for paying subscribers only._ ### Mixing oil with water URL: https://www.energyflux.news/mixing-oil-with-water/ Last updated: 2025-05-14T15:06:43.000Z Renewable energy is not a natural pivot for most national oil companies _This post is for paying subscribers only._ ### UK’s nuclear demise, Oz solar-storage tech + MORE URL: https://www.energyflux.news/uks-nuclear-demise-oz-solar-storage/ Last updated: 2025-05-14T15:06:43.000Z đŸ’„Energy FluxđŸ’„| Wednesday 9th June 2021 _This post is for paying subscribers only._ ### Chevron takes a punt on solar-plus-storage tech URL: https://www.energyflux.news/chevron-takes-a-punt-on-solar-plus/ Last updated: 2025-05-14T15:06:44.000Z Australia’s RayGen promises more powerful and efficient long duration solar storage solution _This post is for paying subscribers only._ ### EDF calls time on UK’s costly AGR nuclear odyssey URL: https://www.energyflux.news/edf-calls-time-on-uks-costly-agr/ Last updated: 2025-05-14T15:06:44.000Z Early defuelling of Dungeness B reminds us of the perils of big-ticket atomic infrastructure projects _This post is for paying subscribers only._ ### ‘Risk-free’ LNG, wind-powered oil rigs + MORE URL: https://www.energyflux.news/risk-free-lng-wind-powered-oil-rigs/ Last updated: 2025-05-14T15:06:45.000Z đŸ’„Energy FluxđŸ’„| Monday 7th June 2021 _This post is for paying subscribers only._ ### Is the UK getting its first wind-powered oil platform? URL: https://www.energyflux.news/is-the-uk-getting-its-first-wind/ Last updated: 2025-05-14T15:06:45.000Z Cerulean Winds will need to overcome operator aversion to risky new tech _This post is for paying subscribers only._ ### Everybody wants risk-free LNG URL: https://www.energyflux.news/everybody-wants-risk-free-lng/ Last updated: 2025-05-14T15:06:46.000Z But nobody wants to invest in its production _This post is for paying subscribers only._ ### Breaking bad habits URL: https://www.energyflux.news/breaking-bad-habits/ Last updated: 2025-05-14T15:06:46.000Z DEEP-DIVE: Behavioural change requires radical system change. Fossil energy incumbents are banking on that not happening. _This post is for subscribers only._ ### Breaking bad habits URL: https://www.energyflux.news/behaviour-climate-change-emissions-oil/ Last updated: 2025-05-14T15:06:47.000Z DEEP-DIVE: Behavioural change requires radical system change. Fossil energy incumbents are banking on that not happening. _This post is for paying subscribers only._ ### Holiday publishing schedule URL: https://www.energyflux.news/holiday-publishing-schedule/ Last updated: 2025-05-14T15:06:48.000Z And a small tweak to the newsletter cadence _This post is for paying subscribers only._ ### Judgment day for Big Oil URL: https://www.energyflux.news/judgment-day-for-big-oil/ Last updated: 2025-05-14T15:06:48.000Z EMERGENCY EDITION: Shell in Dutch court drama, as shareholder rebellions rock Exxon and Chevron _This post is for paying subscribers only._ ### Icelandic wind exports, Bitcoin’s energy crossroads + MORE URL: https://www.energyflux.news/icelandic-wind-exports-bitcoins-energy/ Last updated: 2025-05-14T15:06:48.000Z đŸ’„Energy FluxđŸ’„| Wednesday 26th May 2021 _This post is for paying subscribers only._ ### Ambitious Icelandic wind project aims to export power to UK grid URL: https://www.energyflux.news/ambitious-icelandic-wind-project/ Last updated: 2025-05-14T15:06:49.000Z Uncorrelated output from North Atlantic would diversify UK’s existing wind generation profile, but the project is a step-up in industry ambition _This post is for paying subscribers only._ ### Bitcoin at energy crossroads as miners flee China URL: https://www.energyflux.news/bitcoin-at-energy-crossroads-as-miners/ Last updated: 2025-05-14T15:06:49.000Z Will ex-Chinese mining rigs tap Iranian hydrocarbons, or seek greener power sources in North America? _This post is for paying subscribers only._ ### Last week in đŸ’„Energy FluxđŸ’„ URL: https://www.energyflux.news/last-week-in-energy-flux/ Last updated: 2025-05-14T15:06:49.000Z _This post is for subscribers only._ ### Japan, Australia attack IEA over ‘net zero’ + MORE URL: https://www.energyflux.news/japan-australia-attack-iea-over-net/ Last updated: 2025-05-14T15:06:50.000Z đŸ’„Energy FluxđŸ’„| Monday 24th May 2021 _This post is for paying subscribers only._ ### Japan and Australia attack IEA's ‘net zero’ pathway URL: https://www.energyflux.news/japan-and-australia-attack-ieas-net/ Last updated: 2025-05-14T15:06:50.000Z But private investors are pushing to make it a reality _This post is for paying subscribers only._ ### Big Oil’s green spin-offs, NOCs’ net zero opportunity + MORE URL: https://www.energyflux.news/big-oils-green-spin-offs-nocs-net/ Last updated: 2025-05-14T15:06:51.000Z đŸ’„Energy FluxđŸ’„| Friday 21st May 2021 _This post is for paying subscribers only._ ### Investors punish Big Oil for cutting dividends URL: https://www.energyflux.news/investors-punish-big-oil-for-cutting/ Last updated: 2025-05-14T15:06:52.000Z Stock valuations are lacklustre, but spinning off low carbon businesses could reinvigorate share prices _This post is for paying subscribers only._ ### National oil companies could be early winners on the road to ‘net zero’ URL: https://www.energyflux.news/national-oil-companies-could-be-early/ Last updated: 2025-05-14T15:06:52.000Z IEA roadmap poses big strategic opportunity for those sitting on the cheapest barrels _This post is for paying subscribers only._ ### IEA walks net zero tightrope, Bitcoin goes crazy for ESG + MORE URL: https://www.energyflux.news/iea-walks-net-zero-tightrope-bitcoin/ Last updated: 2025-05-14T15:06:52.000Z đŸ’„Energy FluxđŸ’„| Wednesday 19th May 2021 _This post is for paying subscribers only._ ### Bitcoin goes into ESG overdrive URL: https://www.energyflux.news/bitcoin-goes-into-esg-overdrive/ Last updated: 2025-05-14T15:06:53.000Z Miners embrace carbon offsets, renewable-powered ASICs and commitments to decarbonise as Elon Musk drops bitcoin bombshell _This post is for paying subscribers only._ ### IEA grapples with impossible trade-offs in landmark ‘net zero’ roadmap URL: https://www.energyflux.news/iea-grapples-with-impossible-trade/ Last updated: 2025-05-14T15:06:54.000Z Without behavioural change, unproven technology must bridge the gap between rampant demand and a collapse in fossil fuels _This post is for paying subscribers only._ ### Bitcoin’s climate reckoning URL: https://www.energyflux.news/bitcoins-climate-reckoning/ Last updated: 2025-05-14T15:06:54.000Z DEEP-DIVE: Whatever the motive, Elon Musk’s bitcoin broadside can only be A Good Thing for cryptocurrencies and the climate _This post is for paying subscribers only._ ### Pipeline cyberattack lessons, Dutch carbon contract for difference + MORE URL: https://www.energyflux.news/pipeline-cyberattack-lessons-dutch/ Last updated: 2025-05-14T15:06:55.000Z đŸ’„Energy FluxđŸ’„| Wednesday, 12th May 2021 _This post is for paying subscribers only._ ### Netherlands subsidises Porthos CCS project with carbon ‘contract for difference’ URL: https://www.energyflux.news/netherlands-subsidises-porthos-ccs/ Last updated: 2025-05-14T15:06:55.000Z As the EU ETS price rises, the burden on Dutch taxpayers falls _This post is for paying subscribers only._ ### Colonial pipeline ransomware debacle holds lessons for the energy transition URL: https://www.energyflux.news/colonial-pipeline-ransomware-debacle/ Last updated: 2025-05-14T15:06:57.000Z Cyberattacks are a fact of life. Decarbonisation must not compromise cyber security _This post is for paying subscribers only._ ### Hydro-powered bitcoin mining, hashing instead of flaring + MORE URL: https://www.energyflux.news/hydro-powered-bitcoin-mining-hashing/ Last updated: 2025-05-14T15:06:58.000Z đŸ’„Energy FluxđŸ’„| Monday, 10th April 2021 _This post is for paying subscribers only._ ### Canadian oil producer mines bitcoin, snuffs out gas flare URL: https://www.energyflux.news/canadian-oil-producer-mines-bitcoin/ Last updated: 2025-05-14T15:06:58.000Z Mobile data centre consumes enough gas for more than 1,500 homes _This post is for paying subscribers only._ ### Hydro-powered bitcoin miner lures institutional investors ahead of IPO URL: https://www.energyflux.news/hydro-powered-bitcoin-miner-lures/ Last updated: 2025-05-14T15:06:58.000Z Iris Energy's use of Canadian dams makes it attractive to ESG investors _This post is for paying subscribers only._ ### This week in đŸ’„Energy FluxđŸ’„ URL: https://www.energyflux.news/this-week-in-energy-flux-a04/ Last updated: 2025-05-14T15:06:59.000Z A quick rundown of the biggest energy transition stories since Monday*, 3rd April 2021 _This post is for subscribers only._ ### Tanzania’s zombie LNG megaproject, Total’s portfolio pivot + MORE URL: https://www.energyflux.news/tanzanias-zombie-lng-megaproject/ Last updated: 2025-05-14T15:06:59.000Z đŸ’„Energy FluxđŸ’„| Friday, 7th April 2021 _This post is for paying subscribers only._ ### Total leans on its global LNG portfolio to mitigate Mozambique delays URL: https://www.energyflux.news/total-flexes-its-lng-portfolio-to/ Last updated: 2025-05-14T15:07:00.000Z Papua LNG project could offset some lost volumes and rebalance Total's exposure to Asian coal-to-gas switching opportunities _This post is for paying subscribers only._ ### Tanzania must make big concessions to revive zombie LNG project URL: https://www.energyflux.news/tanzania-concessions-zombie-lng-project/ Last updated: 2025-05-14T15:07:00.000Z Worsening situation in Mozambique should give investors pause for thought _This post is for paying subscribers only._ ### Eni’s green spin-off, New York’s nuclear fallout, EV minerals crunch + MORE URL: https://www.energyflux.news/enis-green-spin-off-new-yorks-nuclear/ Last updated: 2025-05-14T15:07:01.000Z đŸ’„Energy FluxđŸ’„| Wednesday, 5th April 2021 _This post is for paying subscribers only._ ### EVs and wind turbines face critical minerals supply crunch URL: https://www.energyflux.news/critical-minerals-supply-crunch-iea/ Last updated: 2025-05-14T15:07:02.000Z Demand is soaring for copper, lithium, nickel, cobalt and rare earth metals _This post is for paying subscribers only._ ### New York burns more gas after closing Indian Point nuclear power plant URL: https://www.energyflux.news/new-york-burns-more-gas-after-closing/ Last updated: 2025-05-14T15:07:02.000Z Campaigners hoped zero-carbon power sources would fill the gigawatt-sized gap in generation _This post is for paying subscribers only._ ### Eni mulls green spin-off to relieve shareholders of low carbon burden URL: https://www.energyflux.news/eni-mulls-green-spin-off-to-relieve/ Last updated: 2025-05-14T15:07:02.000Z Oil investors don't want to fund low-risk, low-reward renewables projects _This post is for paying subscribers only._ ### Bank holiday publishing schedule URL: https://www.energyflux.news/bank-holiday-publishing-schedule/ Last updated: 2021-05-02T16:15:04.000Z _This post is for paying subscribers only._ ### Net zero effort: We need to talk about the urgent need for behavioural change URL: https://www.energyflux.news/net-zero-effort-we-need-to-talk-about/ Last updated: 2025-05-14T15:07:04.000Z DEEP-DIVE: The energy industry is transitioning too slowly to save us. There is no technological fix to the wasteful pursuit of affluence _This post is for paying subscribers only._ ### Leap of faith: Exxon bets the house on CCS and hydrogen (+ more) URL: https://www.energyflux.news/leap-of-faith-exxon-bets-the-house-cf1/ Last updated: 2025-05-14T15:07:04.000Z ALSO: EU wrangling over gas exposes uneven starting points in bloc’s ‘net zero’ journey | CCS captures more US taxpayer dollars |đŸ’„Energy FluxđŸ’„| Wednesday, 28th April 2021 _This post is for paying subscribers only._ ### Leap of faith: Exxon bets the house on explosive growth in CCS and hydrogen URL: https://www.energyflux.news/leap-of-faith-exxon-bets-the-house/ Last updated: 2025-05-14T15:07:05.000Z Rattled by activist investor, US supermajor grasps for a ‘green’ growth narrative _This post is for paying subscribers only._ ### EU taxonomy wrangling exposes uneven starting points in Europe's ‘net zero’ journey URL: https://www.energyflux.news/eu-taxonomy-wrangling-exposes-uneven/ Last updated: 2025-05-14T15:07:05.000Z Sustainable investment guide has become a flashpoint in rows over the role of natural gas in EU’s energy transition _This post is for paying subscribers only._ ### CCS captures more US taxpayer dollars as part of Biden’s green jobs drive URL: https://www.energyflux.news/ccs-captures-more-us-taxpayer-dollars/ Last updated: 2025-05-14T15:07:06.000Z But lavish state support means greater scrutiny on labour standards _This post is for paying subscribers only._ ### Focussing on what matters URL: https://www.energyflux.news/operational-note-2/ Last updated: 2021-04-27T07:00:41.000Z Rejigging the schedule and format to provide maximum value to premium members _This post is for paying subscribers only._ ### Net zero impact? Climate summit pledges ‘barely move the carbon needle’ URL: https://www.energyflux.news/net-zero-impact-climate-summit-pledges/ Last updated: 2025-05-14T15:07:07.000Z But change is still coming for every part of the energy industry đŸ’„Energy FluxđŸ’„ Monday, 26th April 2021 _This post is for paying subscribers only._ ### This week in đŸ’„Energy FluxđŸ’„ URL: https://www.energyflux.news/this-week-in-energy-flux/ Last updated: 2025-05-14T15:07:08.000Z A quick rundown of the biggest energy transition stories since Monday, 19th April 2021 _This post is for subscribers only._ ### Brace yourself: The energy transition is happening ‘much faster than most realise’ URL: https://www.energyflux.news/brace-yourself-the-energy-transition/ Last updated: 2025-05-14T15:07:08.000Z The speed of energy market disruption remains vastly underestimated, says new research đŸ’„Energy FluxđŸ’„ Thursday, 22nd April 2021 _This post is for paying subscribers only._ ### You’re hired! Exxon promises US jobs bonanza in return for CCS subsidies URL: https://www.energyflux.news/ccs-on-cusp-of-massive-subsidy-injection/ Last updated: 2025-05-14T15:07:09.000Z CCS megaprojects pose convenient political solution to transitioning fossil fuel workers đŸ’„Energy FluxđŸ’„ Wednesday, 21st April 2021 _This post is for paying subscribers only._ ### ‘Red’ hydrogen: Has Russia sparked a battle for H2 market share in Europe? URL: https://www.energyflux.news/red-hydrogen-has-russia-sparked-a/ Last updated: 2025-05-14T15:07:09.000Z Hydrogen via Nord Stream 2 *might* compete with seaborne imports into Germany + MUCH MORE đŸ’„Energy FluxđŸ’„ Tuesday, 20th April 2021 _This post is for paying subscribers only._ ### ‘Responsibly sourced gas’: Big US producers clean up their image, if not their act URL: https://www.energyflux.news/responsibly-sourced-gas-us-gas-giants/ Last updated: 2025-05-14T15:07:10.000Z ‘Clean’ gas wells get shiny new acronym RSG, but what about the dirtier ones? + MUCH MORE đŸ’„Energy FluxđŸ’„ Monday, 19th April 2021 _This post is for paying subscribers only._ ### Brave new world: Bitcoin opens digital frontier in global clean energy transition URL: https://www.energyflux.news/brave-new-world-bitcoin-opens-digital/ Last updated: 2025-05-14T15:07:11.000Z DEEP-DIVE: The energy industry has an opportunity to help forge a new global monetary order đŸ’„Energy FluxđŸ’„ Friday, 9th April 2021 _This post is for paying subscribers only._ ### Operational note URL: https://www.energyflux.news/operational-note/ Last updated: 2021-04-08T06:00:50.000Z Change to publishing schedule _This post is for paying subscribers only._ ### Repent at leisure: Belgium’s rush to crush nuclear sparks dash for gas URL: https://www.energyflux.news/repent-at-leisure-belgiums-rush-to/ Last updated: 2025-05-14T15:07:12.000Z RWE buys Belgian CCGT project to bid for lucrative capacity payments, BP's share buyback plan + MORE đŸ’„Energy FluxđŸ’„ Wednesday, 7th April 2021 _This post is for paying subscribers only._ ### Show me the money: Energy infrastructure lures private equity giants URL: https://www.energyflux.news/show-me-the-money-energy-infrastructure/ Last updated: 2025-05-14T15:07:12.000Z đŸ’„Energy FluxđŸ’„ Tuesday, 6th April 2021 _This post is for paying subscribers only._ ### [Redirect] Flux Briefing URL: https://www.energyflux.news/start-your-mornings-with-flux-briefing/ Last updated: 2025-08-05T20:09:44.000Z If you are not redirected, [click here](https://www.energyflux.news/start-your-mornings-with-flux-briefing-ai-energy-analysis-discourse/). ### Gas-fuelled fantasy: East Timor’s tortuous quest to decarbonise its tiny power grid URL: https://www.energyflux.news/gas-fuelled-fantasy-east-timors-tortuous-a67/ Last updated: 2025-05-14T15:07:13.000Z EASTER SPECIAL 🐣Energy Flux🐣 Monday, 5th April 2021 _This post is for paying subscribers only._ ### Stuck in a rut: hydrogen caught in polarised ‘hope versus hype’ debate URL: https://www.energyflux.news/2021-04-01-polarised-hydrogen-debate/ Last updated: 2025-05-14T15:07:13.000Z đŸ’„Energy FluxđŸ’„ Thursday, 1st April 2021 _This post is for paying subscribers only._ ### Iraq turns to France for help curbing its energy profligacy; Biden’s offshore wind push; Santos’ LNG gamble + ✹MORE✹ URL: https://www.energyflux.news/2020-03-31-iraq-france-gas-lng-solar-wind-biden/ Last updated: 2025-05-14T15:07:14.000Z đŸ’„Energy FluxđŸ’„ Wednesday, 31st March 2021 _This post is for paying subscribers only._ ### đŸ’„Energy FluxđŸ’„ Tuesday, 30th March 2021 URL: https://www.energyflux.news/2021-03-30/ Last updated: 2025-05-14T15:07:14.000Z Big asset managers inflate ‘net zero’ expectations 🎈Heavy emitters buy absolution via LNG ‘carbon offsetting’ 🏭 + LOTS more 🚀 _This post is for paying subscribers only._ ### đŸ’„Energy FluxđŸ’„ Monday, 29th March 2021 URL: https://www.energyflux.news/2021-03-29/ Last updated: 2025-05-14T15:07:15.000Z RELAUNCH SPECIAL: Hydrogen spares LNG latecomers’ blushes 😳, EU throws lifeline to gas investment 🆘 + *much* more 🚀 _This post is for paying subscribers only._ ### The Energy Flux worldview URL: https://www.energyflux.news/the-energy-flux-worldview/ Last updated: 2025-05-14T15:07:16.000Z There is no such thing as pure objectivity. Every editorial decision is influenced by the lens through which each editor views the world. Here's mine. _This post is for paying subscribers only._ ### Pay for premium membership with Bitcoin URL: https://www.energyflux.news/pay-for-premium-membership-with-bitcoin/ Last updated: 2025-05-14T15:07:17.000Z You may now pay for premium membership to Energy Flux using Bitcoin — the future of money! Here's how. _This post is for paying subscribers only._ ### Energy Flux: Style and Ethics URL: https://www.energyflux.news/energy-flux-style-and-ethics/ Last updated: 2025-05-14T15:07:17.000Z Energy Flux aspires to be informative, educational and entertaining. It also adheres to the highest possible ethical standards. _This post is for paying subscribers only._ ### Just a quick note to say
 URL: https://www.energyflux.news/just-a-quick-note-to-say/ Last updated: 2025-05-14T15:07:18.000Z _This post is for paying subscribers only._ ### Key topics: #FossilFuels #ESG URL: https://www.energyflux.news/keytopics-fossil-fuels-esg/ Last updated: 2025-05-14T15:07:20.000Z An evergreen chronology of Energy Flux articles about production and use of crude oil, gas and coal, and the impact of environmental, social and governance investment criteria _This post is for paying subscribers only._ ### Key topics: #CarbonCapture #CCS #CCUS #DACC URL: https://www.energyflux.news/keytopics-carbon-capture-ccs-ccus-daccs/ Last updated: 2025-05-14T15:07:21.000Z An evergreen chronology of Energy Flux articles about carbon dioxide capture, utilisation, sequestration and removal technologies _This post is for paying subscribers only._ ### Key topics: #Nuclear #Geothermal #Hydro URL: https://www.energyflux.news/keytopics-nuclear-geothermal-hydro/ Last updated: 2025-05-14T15:07:22.000Z An evergreen chronology of Energy Flux articles about baseload zero-emissions energy technologies _This post is for paying subscribers only._ ### Key topics: #Wind #Solar #Storage #DSR #Grids URL: https://www.energyflux.news/keytopics-wind-solar-battery-storage/ Last updated: 2025-05-14T15:07:24.000Z An evergreen chronology of Energy Flux articles about variable output clean power generation and storage technologies, including demand-side response, flexibility and power grid modernisation _This post is for paying subscribers only._ ### Key topics: #Digital #Innovation #Crypto #Bitcoin #Blockchain #DeFi URL: https://www.energyflux.news/keytopics-crypto-blockchain-bitcoin/ Last updated: 2025-05-14T15:07:25.000Z An evergreen chronology of Energy Flux articles about digitalisation, cryptocurrencies, blockchain, the bitcoin-energy nexus and decentralised finance _This post is for paying subscribers only._ ### Key topics: #BigOil #IOCs URL: https://www.energyflux.news/keytopics-international-oil-companies/ Last updated: 2025-05-14T15:07:28.000Z An evergreen chronology of Energy Flux articles about international oil companies and how they are adapting to the energy transition _This post is for paying subscribers only._ ### Key topics: #Geopolitics #NetZero #BigPicture URL: https://www.energyflux.news/keytopics-geopolitics-netzero/ Last updated: 2025-05-14T15:07:33.000Z An evergreen chronology of Energy Flux articles about net zero policies, their role in domestic and international affairs, and socio-economic considerations _This post is for paying subscribers only._ ### Key topics: #NOCs URL: https://www.energyflux.news/keytopics-national-oil-companies/ Last updated: 2025-05-14T15:07:34.000Z An evergreen chronology of Energy Flux articles about national oil companies and the economies they support _This post is for paying subscribers only._ ### Key topics: #Gas #LNG #Methane #Flaring URL: https://www.energyflux.news/keytopics-gas-lng-methane-flaring/ Last updated: 2025-05-14T15:07:37.000Z An evergreen chronology of Energy Flux articles about methane in its gaseous and liquefied forms, and how it is wasted _This post is for paying subscribers only._ ### Key topics: #Hydrogen #Ammonia URL: https://www.energyflux.news/keytopics-hydrogen-ammonia-efuels/ Last updated: 2025-05-14T15:07:39.000Z An evergreen chronology of Energy Flux articles about the many hues of H2, NH3 and other e-fuels _This post is for paying subscribers only._ ### Energy Flux yearbook: 2020 URL: https://www.energyflux.news/energy-flux-yearbook-2020/ Last updated: 2025-05-14T15:07:41.000Z Deep-dives written from the dour depths of lockdown _This post is for paying subscribers only._ ### Beyond Exxon: Why a desperate mega-merger with BP might finally make sense URL: https://www.energyflux.news/beyond-exxonmobil-why-a-desperate/ Last updated: 2025-05-14T15:07:42.000Z Political, environmental and market factors are conspiring to haul an unlikely transatlantic tie-up into the realm of the possible _This post is for paying subscribers only._ ### Jumping on the bandwagon: EDF embraces hydrogen and carbon capture in bid to keep Sizewell C relevant URL: https://www.energyflux.news/jumping-on-the-bandwagon-edf-embraces/ Last updated: 2025-05-14T15:07:43.000Z Adding electrolysis and CO2 removal to newbuild nuclear plants is an innovative flexibility hack. But it won’t move the needle on their abysmal economics. _This post is for paying subscribers only._ ### System change or climate change: Why Biden must abandon his bipartisan instincts URL: https://www.energyflux.news/system-change-or-climate-change-why/ Last updated: 2025-05-14T15:07:45.000Z Unless he somehow overhauls the regressive power structures forged by Trump, US president-elect Joe Biden’s progressive energy and climate agenda risks being undone by resurgent Trumpism in 2024. _This post is for paying subscribers only._ ### Lipstick, meet pig: US frackers’ hopeless ESG beauty parade won’t wash with investors URL: https://www.energyflux.news/lipstick-meet-pig-us-frackers-hopeless/ Last updated: 2025-05-14T15:07:46.000Z American shale oil producers are unleashing a torrent of ESG obfuscation on capital markets in a desperate pitch to green investors. It is destined to fail. _This post is for paying subscribers only._ ### The economic imperative: Recession and social injustice imperil the energy transition URL: https://www.energyflux.news/the-economic-imperative-recession/ Last updated: 2025-05-14T15:07:47.000Z The pandemic revealed the human cost of chaotic decarbonisation achieved by tanking the economy. To keep its social licence, the energy transition must decouple GDP growth from CO2 emissions _This post is for paying subscribers only._ ### No more gaslighting: Let’s get real about carbon capture and storage URL: https://www.energyflux.news/no-more-gaslighting-lets-get-real/ Last updated: 2025-05-14T15:07:48.000Z The energy debate must move on from comforting ‘net zero’ targets based on wishful thinking around CCS, or risk undermining the quest for solutions that might actually work. _This post is for paying subscribers only._ ### The shape of change: Incipient megatrends point to multiverse of intertwined energy transitions URL: https://www.energyflux.news/the-shape-of-change-incipient-megatrends/ Last updated: 2025-05-14T15:07:49.000Z Energy transition forecasts depict competing market forces melding with chaotic socioeconomic factors. Hard conclusions are scarce but volatility is a given, so agility will prove key to survival _This post is for paying subscribers only._ ### Policy miasma: Failure to crack down on methane emissions thwarts EU’s ‘clean hydrogen’ push URL: https://www.energyflux.news/leadership-vacuum-eu-failure-to-crack/ Last updated: 2025-05-14T15:07:49.000Z The European Commission is putting hydrogen at the heart of the EU Green Deal without first driving the most potent climate-warming gas out of the fuel required to produce it. _This post is for paying subscribers only._ ### Backs to the wall: Oil exporting countries double down on fossil fuel subsidies URL: https://www.energyflux.news/backs-to-the-wall-oil-exporting-countries/ Last updated: 2025-05-14T15:07:50.000Z Energy producers disconnect from their decarbonising customers by channelling Covid-19 stimulus funds into gas, oil and coal _This post is for paying subscribers only._ ### Diversify, consolidate or die: Energy transition poses stark choices to mid-sized oil companies URL: https://www.energyflux.news/diversify-consolidate-or-die-energy/ Last updated: 2025-05-14T15:07:50.000Z Noble Energy realised the independent E&P business model was failing long before Covid-19. Merging with Chevron buys investors some time, but is no silver bullet. _This post is for paying subscribers only._ ### Lost in transition: Big Oil searches for purpose as peak demand looms URL: https://www.energyflux.news/lost-in-transition-big-oil-searches/ Last updated: 2025-05-14T15:07:51.000Z BP’s decision to slash its crude production this decade is brave. But its assumption that pivoting to low carbon will be profitable is heroic _This post is for paying subscribers only._ ### Moscow manoeuvres to neutralise threat from Europe’s latest hydrogen push URL: https://www.energyflux.news/moscow-manoeuvres-to-neutralise-threat/ Last updated: 2025-05-14T15:07:51.000Z Energy transition ushers in new chapter of EU-Russian co-dependence _This post is for paying subscribers only._ ### Welcome to Energy Flux URL: https://www.energyflux.news/coming-soon-2/ Last updated: 2020-07-28T23:10:36.000Z Reflections on the energy transition, decarbonisation, disruptive clean tech and net zero policies _This post is for paying subscribers only._