The Eyes on the Global Natural Gas Market

The effect that conflicts in the Middle East have on the oil and natural gas markets is well known; what is particularly relevant on this occasion is where the effect is taking place. While oil is recording contained increases of less than 10%, liquefied natural gas (LNG) is facing a significant shock, mainly following QatarEnergy’s announcement that it is suspending its LNG production after attacks on facilities in Ras Laffan and Mesaieed, and today it extended the measure to products such as urea, polymers, and methanol. Additionally, the Strait of Hormuz, a critical route, has seen its traffic fall drastically due to Iranian threats, leaving hundreds of vessels stranded. This asymmetry highlights vulnerabilities in the global LNG supply chain. The measure is not minor; QatarEnergy represents close to 20% of the world’s LNG supply, almost all of it passing through Hormuz and heading to Asia.

In recent years, natural gas has acquired greater relevance as a transition fuel since it is more efficient and has lower emissions than coal, which has driven investments to promote electricity generation in Asia using natural gas mainly obtained through LNG vessels. The global LNG market has grown to such an extent that even the United States has strengthened its position with LNG exports reaching records in 2025 and surpassing shipments by pipeline to Mexico and Canada. In this way, LNG has consolidated itself as the main vector of international trade, allowing flexible shipments.

The war disproportionately affects LNG because it has a fairly complex logistics chain that requires specialized terminals, there are limited vessels and they are usually tied to long-term contracts, so there is a lack of quick alternatives. Likewise, there are no massive floating inventories or routes equivalent to those of oil. This generates immediate impacts, producing increases in European benchmark prices of almost 50% and in Asia of 25%.

Japan, South Korea, China, and India receive most of Qatari LNG and face risks to up to 30% of their usual supply, with intense competition for alternatives. Europe, limited by sanctions on Russia and the situation in Ukraine, is threatened by an increase in electricity costs and effects on industry. Russia could increase shipments to China through pipelines, but with restricted capacity. The United States, as the largest exporter, can redirect volumes to allies, consolidating influence although with logistical limits and domestic prices on the rise.

What stands out from this crisis is that LNG, despite its growing demand and its position as that fuel for the energy transition, is also exposed to geopolitical bottlenecks that, for the moment, oil has mitigated better given its inventories and diversification of production. Nevertheless, if the conflict continues, a reordering is likely, which would imply bringing coal-fired power plants back into operation, facing high energy costs in Asia and Europe, and a call to strengthen resilience on critical routes. Energy logistics continues to be a decisive factor in global stability and the Middle East a key actor in energy markets. In the case of Mexico, for now, we benefit from the proximity to production in the United States, so a shortage is not foreseen, although, without setting aside, that a possible increase in benchmark prices could hit the country’s tariff structure, whose electricity generation matrix depends on natural gas for more than 60%.

This article was originally published by La Prensa OEM.
Date: March 21, 2026
Link: https://oem.com.mx/la-prensa/analisis/opinion-por-paul-alejandro-sanchez-campos-los-ojos-en-el-mercado-global-de-gas-natural-29260064 [Online]

OPEC+ Cuts Again

This Sunday the news was spread that OPEC+ is planning a new voluntary cut led by Saudi Arabia that by itself would reduce 500,000 barrels per day. The members of OPEC and their allies could reduce between 1.1 and 1.6 million barrels per day of crude in the world market, which depends on Russia contributing another 500,000 barrels per day to the reduction. In any case, the cut would enter into force starting in May and would extend throughout all that remains of 2023.

Of course this is not a coincidence. In the midst of the financial chaos caused by the inflationary escalation, the continuous rise of the reference rate and the blow to banking institutions, it is not the best moment for energy prices to come back on the offensive. But it is clear that the surprise cut is directed at the United States for a couple of reasons particularly.

“It is clear that the surprise cut is directed at the United States.”

On the one hand, in October of last year the United States promised Saudi Arabia that it would not let oil prices collapse and that, once prices touched $75 dollars per barrel in the Brent reference, the government of the United States would begin to fill its strategic reserve to keep the price stable.

However, when the price of Brent fell below the mark in mid-March, the Biden government showed little interest in beginning the purchase of oil to refill the strategic reserve and even declared that perhaps, toward the end of 2023, they could begin with the purchase to observe the behavior of global markets derived from the recent financial shocks.

On the other hand, just last week the United States Energy Information Agency published that in 2022 the United States broke a record of crude exports, reaching 3.6 million barrels per day, which represented an increase of 22% compared with 2021.

Faced with greater production of American oil in the world and with prices falling in comparison with the previous year, it seemed like a good moment to begin filling the strategic reserve of the United States. This would allow reducing the circulating crude and stopping the fall of international prices.

These two events could have had political implications, or that is what is rumored in the circles that follow the issue. That Biden did not quickly fulfill his word to maintain the international price of oil contributes to the deterioration of relations between the two nations.

For now, the price of oil in the main references has risen around five dollars per barrel after the announcement. It is too soon to know whether this price will be maintained in the future or how the United States will respond or, even, whether the countries, including Russia, comply with the voluntary reduction, but what is a fact is that this occurs at a complicated moment due to global inflationary pressure.

This article was originally published by Energía a Debate.
Date: April 3, 2023
Link: https://energiaadebate.com/la-opep-recorta-de-nuevo/ [Online]

Electricity as a Tax

The electric reform presented by the president and that will be discussed this Sunday considers electricity not as a means to generate wealth nor well-being. At the heart of the declarations and intentions lies a painful truth regarding the origin and objectives of the reform: that electricity be a tax paid by Mexican companies and households.

There is a great conceptual confusion that permeates from equating the history of the national electric sector with that of oil, or even mines because of lithium. At the heart of the confusion, a 2.0 nationalization of electricity in the country is intended, but it is forgotten that electricity by itself is not wealth, but rather it is a means that would allow wealth to be generated if used in the correct way.

I reiterate, electricity by itself does not generate wealth, since we cannot generate it, bottle it and export it so that other countries buy it and profits are obtained from its exploitation. Nor can we use it to infinitely increase our well-being, that is, if price did not matter, having six refrigerators turned on does not improve our quality of life.

To the point of absurdity, neither can we use electricity as a force field to avoid invasions and protect national sovereignty from external aggressions. Much less give electricity to families so that they may feed themselves if food is lacking. We cannot use electricity as money, nor save electricity for the future or to relieve economic recessions.

“The vision is not only archaic, but, deep down, it is tributary.”

Electricity is, then, a means, not an end in itself. It is a means that allows us to improve the conditions of households, the lighting of streets, the mobilization of people and the productive activation of factories. Electricity is a means to mobilize and drive the economy; as a country, having an abundance of electricity means that you can offer it to companies so that they generate productive processes.

In Mexico, around 70% of the country’s electric energy is consumed by companies, from small businesses to large industries, and only 25% of consumption is attributable to households. This means that it is of no use to us to have an abundance of electricity if it is not used to strengthen the economy. That is, if tomorrow all companies stop consuming, Mexican households do not benefit; on the contrary, the economy is harmed.

If a country has an abundance of clean and cheap energy, it immediately positions itself as one of the most attractive countries to invest in and that is what generates wealth, not electricity flowing through the networks without being able to be used because companies abandon and stop investing.

The objective of the electric reform is clear and has been reiterated by its defenders on multiple occasions: that industries, businesses and households pay more for electricity, that they pay more to CFE and that CFE obtains control to set the tariffs it wants to whomever it wants and that each and every one of the load centers only buy electric energy from CFE.

The vision is not only archaic, but, deep down, it is tributary, because instead of seeing electricity as a good or service whose purpose is to enable satisfiers and drive economic dynamism, it is only seen as a tax to extract rents from the companies and households that consume the energy. It is simply and plainly about obtaining more cash flow for CFE.

This article was originally published by Energía a Debate.
Date: April 17, 2022
Link: https://energiaadebate.com/la-electricidad-como-un-impuesto/ [Online]