Natural gas

Updated 2026-10-18

Summary

Natural gas is a fossil fuel made mostly of methane. It heats homes, generates power and is the main raw material for ammonia, the base of nitrogen fertilizer. It moves by pipeline within continents and by ship as liquefied natural gas (LNG) between them, so prices differ by region: Henry Hub in the US, TTF in Europe and JKM in Asia. About a fifth of world LNG, from Qatar and the UAE, passed the Strait of Hormuz in 2025. An IEA account available on 2026-10-18 said Qatar's Ras Laffan plant had been offline since an attack on 2026-03-02; current output is unknown. US LNG exports averaged 17.4 Bcf/d in 1H26, and EIA forecasts 17.6 Bcf/d for 2026.

Key numbers

Henry Hub spot price (EIA daily): $3.22/MMBtu (as of 2026-10-14). Source: eia.gov

EIA Henry Hub forecast: 4Q26 / 2026 / 2027: $3.30 / $3.48 / $3.16 per MMBtu (as of 2026-10-06). Source: eia.gov

US working gas in storage: end-September actual / end-October forecast: 3,523 Bcf / 3,850 Bcf (~2% above five-year average) (as of 2026-10-06). Source: eia.gov

US LNG exports: 1H26 actual / 2026 and 2027 forecast: 17.4 Bcf/d (+23% y/y) / 17.6 and 18.6 Bcf/d (as of 2026-10-06). Source: eia.gov

US dry gas production forecast 2026 / 2027: 112.2 / 116.1 Bcf/d (as of 2026-10-06). Source: eia.gov

LNG through Hormuz, 2025: >110 bcm, about 20% of world LNG supply (as of 2026-10-14). Source: iea.org

Qatar + UAE LNG supply, 2026 vs 2025 (IEA forecast): -45% (-54 bcm) (as of 2026-07-07). Source: iea.org

Cumulative LNG supply loss 2026-2030 (IEA): ~140 bcm (~15% of new supply) (as of 2026-07-07). Source: iea.org

TTF / JKM average, Q2 2026: ~$16 / $17.5 per MBtu (+32% / +45% y/y) (as of 2026-07-07). Source: iea.org

Russian gas share of EU imports: 12% in 2025 (45% at start of war) (as of 2026-04-23). Source: energy.ec.europa.eu

Hormuz share of global urea / ammonia trade: >30% / ~20% (as of 2026-10-14). Source: iea.org

US peak LNG export capacity: 18.3 Bcf/d (as of 2026-04-16). Source: eia.gov

Timeline

2026-10-16 — White House order sets a 100 percent duty increase for the top five buyers of Russian crude and gas from 2026-10-18, then waives it in the same order. (Source: whitehouse.gov)

2026-10-08 — Commission says EU storage is below historical levels but the system can cover winter with more LNG; Russian long-term LNG ends from 2027. (Source: energy.ec.europa.eu)

2026-10-06 — EIA October STEO: US storage seen at 3,850 Bcf at end-October (2% above normal); Henry Hub $3.30 in 4Q26. (Source: eia.gov)

2026-09-03 — EU Gas Coordination Group notes Qatari LNG production is still shut down. (Source: energy.ec.europa.eu)

2026-09-01 — EIA reports US LNG exports up 23% in 1H26 to 17.4 Bcf/d, with Asia-bound cargoes doubling. (Source: eia.gov)

2026-08-28 — Cheniere completes the last Corpus Christi Stage 3 train. (Source: eia.gov)

2026-07-07 — IEA: global gas demand to fall 0.5% in 2026; Qatar and UAE LNG output down almost 80% in March-June. (Source: iea.org)

2026-06-17 — EU ban on Russian pipeline gas under short-term contracts applies. (Source: eur-lex.europa.eu)

2026-04-28 — EIA: TTF up 35% and Asian LNG up 51% since Hormuz closed, while Henry Hub fell 9%. (Source: eia.gov)

2026-04-25 — EU ban on Russian LNG under short-term contracts applies. (Source: eur-lex.europa.eu)

2026-04-24 — IEA: Asian and European gas prices hit their highest since January 2023 in March; LNG supply wave delayed at least two years. (Source: iea.org)

2026-03-18 — EU Russian gas import ban (Regulation 2026/261) starts to apply for new contracts. (Source: eur-lex.europa.eu)

2026-03-13 — DOE amends Plaquemines LNG's non-FTA export authorization. (Source: energy.gov)

2026-03-05 — Edison discloses QatarEnergy force majeure on five April cargoes for Italy. (Source: edison.it)

2026-03-04 — QatarEnergy declares force majeure on LNG deliveries. (Source: eia.gov)

2026-03-02 — Attack takes Ras Laffan, the world's largest liquefaction facility, offline. (Source: iea.org)

2026-01-26 — EU Council adopts the stepwise ban on Russian gas imports. (Source: consilium.europa.eu)

Key actors and links

LNG (commodity:lng): Seaborne gas; where the Gulf loss is priced and US supply competes.

Strait of Hormuz (place:strait-of-hormuz): Carried about a fifth of world LNG in 2025, with no bypass route.

Qatar (country:qatar): An IEA account available on 2026-10-18 said Ras Laffan had been offline since 2026-03-02; current output is unknown, while force majeure continued for at least some contracted cargoes.

Hormuz disruption (theme:hormuz-impairment): The disruption that constrains global gas supply in this graph.

2026 Iran war (event:2026-iran-war): The war that closed Hormuz and took Ras Laffan offline.

United States (country:united-states): Exported 17.4 Bcf/d of LNG in 1H26; terminal limits keep Henry Hub low.

Major Asian importers (region:asian-importers): Took almost 90% of Hormuz LNG and most extra US cargoes.

Europe (region:europe): Low storage this winter while phasing out Russian gas.

European Union (actor:european-union): Regulation 2026/261 bans Russian gas stepwise through 2027.

Russia (country:russia): Supplied 12% of EU gas imports in 2025.

Sanctions on Russia (policy:russia-sanctions): Graham Act duties on top buyers of Russian gas, waived on 2026-10-16.

Fertilizer (commodity:fertilizer): Gas is the main ammonia feedstock, so its price passes into nitrogen fertilizer.

Fertilizer / agricultural-input application (theme:agricultural-input-application): Dearer fertilizer can cut application and later yields.

European energy stress (theme:european-energy-stress): Gas prices and storage are its main channel this winter.

European growth and inflation stress (theme:european-growth-inflation-stress): Gas prices raise European power, heating and industrial costs.

Why it matters now

The Iran war split the gas market in two. Abroad, the loss of Qatari and UAE LNG after the March attacks pushed March prices in Asia and Europe to their highest since January 2023; in Q2 TTF averaged about $16/MBtu and JKM $17.5. The IEA expects Qatar and UAE supply to fall 45% in 2026. At home, Henry Hub was $3.22 on 2026-10-14: US terminals were already near full, so the shortage could not pull much more US gas abroad. EIA forecasts $3.30 in 4Q26. Edison said force majeure on its QatarEnergy cargoes would run until early December; current Ras Laffan output is unknown.

Europe has less margin. The Commission says storage is below historical levels but can be covered with more LNG. The EU is also removing Russian gas, 12% of its imports in 2025: long-term LNG ends on 2027-01-01 and pipeline gas by 2027-09-30. The US order of 2026-10-16 set a 100 percent duty on top buyers of Russian crude and gas, then waived it. Gas also feeds food prices: over 30% of urea trade crosses Hormuz and dearer gas is cutting nitrogen output in Asia and Europe.

Risks and open questions

Bull case: Inference (AA), easing case: new supply is arriving. Corpus Christi Stage 3 is complete, Golden Pass is ramping, and Port Arthur and Rio Grande start in 2027; EIA expects US LNG exports of 18.6 Bcf/d in 2027. Demand has bent: the IEA expects global gas demand to fall 0.5% in 2026. If Hormuz reopens and Ras Laffan's undamaged trains restart, the delayed LNG supply wave resumes.

Bear case: Inference (AA), stress case: the IEA warns a Hormuz reopening delayed beyond the start of Q4 2026 could bring the first annual fall in global LNG supply since 2012. Europe starts winter with low storage and loses Russian long-term LNG from 2027-01-01, so a cold winter would make it outbid Asia for cargoes. Dear gas keeps nitrogen fertilizer dear, which can cut application and feed food inflation into 2027. A US cold snap can still spike Henry Hub, as in January ($7.72).

Falsifiers: - Mechanism weakens if TTF and JKM fall back toward 2025 averages while Ras Laffan remains offline. - US-insulation view weakens if Henry Hub rises well above EIA's $3.30 4Q26 forecast without a cold snap. - Bear weakens if QatarEnergy lifts force majeure and LNG transits through Hormuz resume at scale before December. - Bear weakens if EU storage withdrawals stay normal through February and the Commission does not need to suspend the Russian gas ban. - Bull weakens if Golden Pass Train 2 slips well past late 2026 or IEA raises its 2026-2030 loss estimate again. - Fertilizer link weakens if urea and ammonia prices stay below 2025 averages despite high gas prices.

What to watch

EIA November Short-Term Energy Outlook: revised Henry Hub, storage and LNG export forecasts. (2026-11-10); Source: eia.gov

Start of the US heating season; EIA says storage can keep building into mid-November. (2026-11-01 to mid-November); Source: eia.gov

End of the QatarEnergy force majeure period notified to Edison, or a further extension. (beginning of December 2026); Source: edison.it

Close of the EU window to reach the 90% storage target, or use of its flexibility. (2026-12-01); Source: energy.ec.europa.eu

Golden Pass LNG Train 2 completion. (late 2026); Source: eia.gov

EU ban on Russian LNG under long-term contracts takes effect. (2027-01-01); Source: eur-lex.europa.eu

EU ban on Russian pipeline gas under long-term contracts (2027-11-01 where storage targets are at risk). (2027-09-30); Source: eur-lex.europa.eu

USTR monitoring of Russian crude and gas purchases; any decision to end the Graham Act duty waiver. (no scheduled date); Source: whitehouse.gov

Restart of Ras Laffan's undamaged trains and resumption of laden LNG transits through Hormuz. (no scheduled date); speculative, no scheduled source

AA inference

Inference (AA): Natural gas is the graph's link from the Hormuz closure to heating, power and fertilizer costs. Lost Qatari LNG makes Asia and Europe bid against each other for cargoes. US export capacity limits how much of that bid reaches Henry Hub, so US consumers are mostly shielded while Europe and Asia are not. Gas is also the input cost for ammonia and urea, which reach food prices with a lag. This makes the US-versus-rest price gap the key signal: it should narrow only when Ras Laffan restarts or new US and other trains come online. Europe is most exposed this winter, because it is losing Russian gas while storage is below normal. The view weakens if Qatari LNG returns at scale before mid-winter, or if TTF and JKM fall back toward 2025 levels while Ras Laffan stays offline.

Sources

Natural gas's largest component is methane (CH4); dry gas moves by pipeline to storage and consumers, and some is traded as liquefied natural gas. (Source: eia.gov, accessed 2026-10-18)

In 2023 the US consumed 32.50 Tcf of natural gas: electric power 40%, industrial 32%, residential 14%, commercial 10%, transportation 4%; industry also uses it as a feedstock. (Source: eia.gov, accessed 2026-10-18)

EIA: ammonia is produced primarily from natural gas, and ammonia prices closely correlate with natural gas feedstock prices (2022-05-10). (Source: eia.gov, accessed 2026-10-18)

IEA: about 20% of world LNG supply, over 110 bcm, moved through the Strait of Hormuz in 2025, including about 93% of Qatar's and 96% of the UAE's LNG exports; there are no alternative routes. (Source: iea.org, accessed 2026-10-18)

IEA: almost 90% of LNG exported via Hormuz went to Asia, over a quarter of the region's LNG imports, and just over 10% to Europe. (Source: iea.org, accessed 2026-10-18)

An IEA account available on 2026-10-18 said Qatar's Ras Laffan, the world's largest liquefaction facility, had been offline since an attack on 2026-03-02; it also said Qatar and UAE LNG supply fell by over 300 million cubic metres a day from 2026-03-01, about three-quarters offset by other producers. Current Ras Laffan output is unknown. (Source: iea.org, accessed 2026-10-18)

IEA: more than 30% of global urea trade and about 20% of ammonia and phosphate trade move through Hormuz, and some countries run domestic fertiliser plants on imported LNG. (Source: iea.org, accessed 2026-10-18)

EIA (2026-04-28): QatarEnergy declared force majeure on 2026-03-04; about 10 Bcf/d of global LNG, roughly 20% of supply, was affected by the closure. (Source: eia.gov, accessed 2026-10-18)

EIA (2026-04-28): for the week ending 2026-04-24, TTF averaged $14.80/MMBtu, 35% above pre-closure levels, and East Asia LNG $16.02/MMBtu, up 51%, while Henry Hub was down 9% since 2026-02-28. (Source: eia.gov, accessed 2026-10-18)

EIA (2026-04-28): US LNG terminals ran at 94% of maximum DOE-approved export levels in March 2026, leaving limited room to raise exports, which with ample storage kept Henry Hub stable. (Source: eia.gov, accessed 2026-10-18)

Edison (2026-03-05): QatarEnergy notified Edison of force majeure covering five LNG cargoes due in early April 2026, under a long-term contract for 6.4 bcm a year to Italy. (Source: edison.it, accessed 2026-10-18)

Edison has published a notice titled 'QatarEnergy extends force majeure until the beginning of December 2026'. (Source: edison.it, accessed 2026-10-18)

IEA (2026-04-24): Asian and European gas prices reached their highest level since January 2023 in March; Qatari damage delays the LNG supply wave by at least two years. (Source: iea.org, accessed 2026-10-18)

IEA Gas Market Report Q3-2026: global gas demand is forecast to fall about 0.5% (20 bcm) in 2026; Qatar and UAE LNG supply is forecast down about 45% (54 bcm) on 2025; cumulative 2026-2030 losses are about 140 bcm. (Source: iea.org, accessed 2026-10-18)

IEA Q3-2026: TTF averaged near $16/MBtu in Q2 2026 (+32% y/y) and JKM $17.5/MBtu (+45%); Gulf fertiliser exports have largely stopped and high gas prices weigh on nitrogen fertiliser output in Asia and Europe. (Source: iea.org, accessed 2026-10-18)

IEA (2026-07-07): Qatar and UAE LNG output fell almost 80% in March-June versus a year earlier; a full Hormuz reopening delayed beyond the start of Q4 2026 could cause the first annual fall in global LNG supply since 2012. (Source: iea.org, accessed 2026-10-18)

EIA October 2026 STEO (2026-10-06): Henry Hub forecast $3.48/MMBtu in 2026 and $3.16 in 2027; January 2026 averaged $7.72 after Winter Storm Fern. (Source: eia.gov, accessed 2026-10-18)

EIA October 2026 STEO: Henry Hub forecast $3.30/MMBtu in 4Q26 after $2.87 in 3Q26. (Source: eia.gov, accessed 2026-10-18)

EIA October 2026 STEO: US storage was 3,523 Bcf at end-September and is forecast at 3,850 Bcf at end-October, about 2% above the five-year average; LNG exports are forecast at 17.6 Bcf/d in 2026 and 18.6 Bcf/d in 2027; dry gas production 112.2 Bcf/d in 2026. (Source: eia.gov, accessed 2026-10-18)

EIA (2026-08-11): the August STEO had forecast 3,985 Bcf by end-October, the most ahead of winter since 2016. (Source: eia.gov, accessed 2026-10-18)

EIA daily Henry Hub spot price: $3.22/MMBtu on 2026-10-14, against $3.10 on 2026-10-09 and 2026-10-12. (Source: eia.gov, accessed 2026-10-18)

EIA (2026-09-01): US LNG exports averaged 17.4 Bcf/d in 1H26, up 23%; exports to Asia rose 2.3 Bcf/d (108%) while Europe rose 1%; Plaquemines, Corpus Christi Stage 3 and Golden Pass together add 4.0 Bcf/d nominal capacity. (Source: eia.gov, accessed 2026-10-18)

EIA (2026-09-15): Cheniere completed the seventh and last Corpus Christi Stage 3 train on 2026-08-28, taking the facility to 3.1 Bcf/d nominal, second to Sabine Pass at 3.6 Bcf/d. (Source: eia.gov, accessed 2026-10-18)

EIA (2026-04-16): US peak LNG export capacity was 18.3 Bcf/d; Port Arthur Phase 1 (1.6 Bcf/d) and Rio Grande Trains 1-2 (1.4 Bcf/d) are expected to start exporting in 2027. (Source: eia.gov, accessed 2026-10-18)

EIA (2026-10-07): homes heating with natural gas are expected to spend about 9% less this winter, against a 21% rise for heating oil. (Source: eia.gov, accessed 2026-10-18)

Regulation (EU) 2026/261: the Russian gas import ban applies from 2026-03-18, from 2026-04-25 for short-term LNG and 2026-06-17 for short-term pipeline contracts, 2027-01-01 for long-term LNG and 2027-09-30 for long-term pipeline contracts (2027-11-01 where storage targets are at risk). (Source: eur-lex.europa.eu, accessed 2026-10-18)

Council of the EU: the regulation was adopted on 2026-01-26, entered into force on 2026-02-03, and lets the Commission suspend the ban for up to four weeks in a declared supply emergency. (Source: consilium.europa.eu, accessed 2026-10-18)

European Commission: EU dependence on Russian gas fell from 45% of imports at the start of the war to 12% in 2025; about 35 bcm a year remains to be phased out. (Source: energy.ec.europa.eu, accessed 2026-10-18)

European Commission: under Regulation (EU) 2025/1733 the 90% storage target can be met any time between 1 October and 1 December, with flexibility to deviate in difficult market conditions. (Source: energy.ec.europa.eu, accessed 2026-10-18)

European Commission (2026-10-08): EU storage is below historical levels, but ENTSOG finds the system flexible enough for winter by importing more LNG; Russian long-term LNG contracts end from the start of 2027. (Source: energy.ec.europa.eu, accessed 2026-10-18)

European Commission Gas Coordination Group (2026-09-03): Qatari LNG production 'is still shut down'. (Source: energy.ec.europa.eu, accessed 2026-10-18)

White House order (2026-10-16): duties on the five largest importers of Russian crude oil and natural gas that knowingly make new purchases on or after 2026-10-18 are raised by 100 percent, subject to waivers that the same order issues; USTR monitors purchases. (Source: whitehouse.gov, accessed 2026-10-18)

US DOE amended Venture Global Plaquemines LNG's non-FTA export authorization (Order 4446-B) on 2026-03-13 and granted Southern LNG (Elba Island) a non-FTA authorization (Order 5404) on 2026-04-02. (Source: energy.gov, accessed 2026-10-18)