Jun. 15 at 5:52 PM
TTF vs Henry Hub Spread (US Export to Europe):
$10.78/MMBtu - returns to slightly above pre-war levels
European underground gas storage is currently filled to 41.8% of total capacity, -14.2 percentage points lower than the historical 5-yr June norm (~56%), making it the lowest late-May/early-June storage level recorded since 2021
Summer gas injection paces are running -21% below last year. If this slow pace keeps up, Europe will only hit roughly 67% to 73% capacity by winter - EU policymakers will need to relax the mandatory Nov 1 storage target from 90% down to 80% capacity & maybe even 70%
Asia lacks large underground salt caverns or depleted fields for massive seasonal storage. Instead, the region relies almost entirely on above-ground, cryogenic LNG storage - these tanks can only hold enough fuel for immediate operational needs rather than entire seasons, the continent is highly sensitive to short-term inventory drawdowns
Only 1 LNG tanker (The Disha) passed thru the Strait today, carrying LNG to India. The tanker had loaded LNG from Qatar’s Ras Laffan in early March. India has had several LNG tankers from Qatar move thru the Strait of Hormuz in the past months, after securing & negotiating corridors w/ Iran. India, the world’s 4th-largest LNG importer, relies on Qatar for about 41% of its gas imports
Under unrestricted navigation in the Strait, the traffic pile-up on either side can be resolved in 8-10 days
Iranian attacks have knocked out 17% of Qatar’s LNG export capacity, causing an est'd
$20B in lost annual rev
Note: Some shipping companies (Japan’s Mitsui O.S.K. Lines, Nippon Yusen) have made it clear that they will wait until the deal is formalized on Friday before attempting to cross the Strait. Even for shipowners who are willing to make the crossing, organizing insurance & other practical issues could further delay the recovery. There had been news reports that mines had been laid in the area
$UNG $LNG $VG $XOM $CVX