Episode summary
Natural Gas in Focus: Iran Conflict Could Have ‘Very Painful’ Consequences
Exchanges (Goldman Sachs)
· · 16 min · Guests: Samantha Dart
Summary
Natural gas, not just oil, is the market most exposed to the Iran conflict because demand is highly seasonal and storage has to be rebuilt before winter. Samantha Dart says gas is used for power generation, industrial processes, and especially heating, so a supply shock in spring or summer creates a hard deadline: inventories must be replenished by the end of October or prices have to rise enough to curb demand.
The biggest immediate risk is Qatar, which Dart says produces about 20% of global LNG supply and has had all of that capacity disrupted after attacks on infrastructure. She says prices have already risen 50% to 70%, but not enough to force the full substitution and shutdowns she would normally expect. In her view, the market is being partly cushioned by China’s lower demand and releases of LNG into the market, which have helped keep Europe supplied for now.
Dart argues the outcome is extremely duration-dependent. If disruption is resolved quickly, prices may need to stay only modestly above coal, implying about 20% downside from current levels. If the conflict drags on, she says the market could need 50% to 100% more upside from here to force enough demand destruction before next winter.
Key takeaways
- Samantha Dart says the key natural gas risk is not just lost supply, but the need to rebuild inventories before winter ends.
- Dart says Qatar’s output, about 20% of global LNG supply in 2025 data, is currently shut down after attacks on infrastructure.
- Dart says prices are up 50% to 70%, but that is still not enough to trigger the full coal, oil-product, and industrial switching she expected.
- Dart says the U.S., despite producing about 30% of global LNG, has no spare capacity to offset the shock.
- Dart says a quick resolution could leave gas about 20% below current levels, while a prolonged conflict could force 50% to 100% more upside.
Notable quotes
“there's an equally unsettling story unfolding in the natural gas markets”
“you have seven months to fix this. And not just fix the disruption you have today”
“Qatar produces the equivalent of just about 20% of global LNG supplies. And all of that is disrupted at the moment”
“I would have expected that natural gas would maybe become more expensive than some oil products like propane or fuel oil”
“The US alone is responsible for just about 30% of global liquefied natural gas supplied today. The problem is there is no spare capacity”
How the episode opens
While oil is dominating the headlines in the wake of the Iran conflict, there's an equally unsettling story unfolding in the natural gas markets. I'm Allison Nathan, and this is Goldman Sachs Exchanges. For today's episode, I'm sitting down with Samantha Dart, co-head of Global Commodities Research, to talk about the implications of a natural gas shock which may in some cases actually be more damaging than an oil shock.
Sam, welcome back to Exchanges. Thanks for having me. Sam, we have talked a lot on this podcast about the impact that the war in Iran is having on oil markets, but today I want to dig into the implications for natural gas markets and liquefied natural gas, which is commonly referred to as LNG, because I think it's actually an area that a lot of our listeners underappreciate in terms of this conflict and in terms of its importance in the economy.
So let's just start at a high level. First, give us the basics. What makes natural gas markets fundamentally different in how they respond to geopolitical shocks?
Yeah, I think the main difference is the seasonality of demand. The fact that you need so much of it in the winter. And maybe we should take a step back and think: What do we use this thing for?
And there are three main uses. The first one you can think of is electricity generation. Just we a lot of utilities, they have -- in the same way they have nuclear plants and coal plants, they have natural gas-run power plants.
You also have a lot of use of natural gas for industrial applications. You can either use that directly as a feedstock into whatever you're producing. Or what is most common is to just use to generate heat and energy for the manufacturing processes.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- natural gas prices
- iran conflict
- energy markets
- commodities research
- geopolitical risk
Companies and tickers mentioned
- GS
- Goldman Sachs
Watch the episode
Watch “Natural Gas in Focus: Iran Conflict Could Have ‘Very Painful’ Consequences” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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