Update: Analysts Warn Global Energy Markets Not Out of Woods Just Yet Despite US-Iran Ceasefire

(Updates with comments from Gary Cunningham in the 13th paragraph and Natasha Fielding of Argus Media in the 14th, 15th, and 16th paragraphs and Ian Mikkelsen of WFII in the 17th, 18th, and 19th paragraphs.)As the ceasefire between the US and Iran led to steep declines in natural gas prices, leading analysts have warned that it might be too early to assume that the worst might be over, with plenty of uncertainties and unresolved factors hanging over global energy markets.On Wednesday, Cyril Widdershoven, a geopolitical strategist, highlighted that the Strait of Hormuz, a strategic chokepoint in this conflict, "is not open," and in fact, it was now being "conditionally managed," with Tehran now retaining significant leverage over global energy flows.He noted that despite the drop in prices, risk premiums continued to remain elevated for oil, liquefied natural gas, and shipping markets, which he viewed as a sign of stress.Widdershoven also highlighted a "structural fault line" created by Tehran's control over the Strait of Hormuz, leaving the Organization of the Petroleum Exporting Countries increasingly exposed to a contested chokepoint.He concluded by saying that the ceasefire announced on Tuesday was not a de-escalation, but rather a shift toward "controlled instability," which he said would have profound implications on maritime trade, energy security, and geopolitics going forward.Daniel Hynes, a senior commodity strategist at ANZ, echoed similar concerns while noting that no LNG tankers had passed through the Strait since the conflict began in late February.He also warned that even if the shipping route were to completely open, the markets cannot make up for the "missing Qatari output" quickly, which he said would limit the downside for LNG prices, amid inventory drawdowns and demand rationing.In a research note published on Wednesday, JP Morgan held a similar view, particularly on European LNG prices, citing intensifying competition, amid low European storage and rising Asian cooling demand.The bank said that it expects Dutch TTF prices to average 55 euros ($64.27) per megawatt-hour in Q2, 60 euros/MWh in Q3, 65 euros/MWh in Q4, and 53.25 euros/MWh for the whole of 2026.Similarly, for the UK NBP, the bank raised its price forecasts, now expecting prices to average at 133 British pence ($1.79) per therm in 2026 and 119 British pence/therm in 2027, compared to its earlier forecast of 71.0 British pence per therm.This, it said, was based on the assumption that "Qatari volumes return for winter at 80% capacity utilization," as Europe begins reinjections into inventory at one of its lowest levels on record.According to Gary Cunningham of Tradition Energy, LNG faces a tougher road to recovery, one that could take years, since "Qatari facilities were hard hit by Iranian strikes."Noting the overnight selloff in US natural gas, Cunningham said that he expects a reversal and sees gas prices at "$3 for the near term and $3.25 for summer." He noted that "we are already seeing the recovery in US Henry Hub prices."According to Natasha Fielding of Argus Media, "we are a long way from normal in the global LNG markets," which she said was reflected in the prices, which continue to remain above pre-crisis levels.She said a further drop in prices would depend on traffic flows through the Strait of Hormuz, while noting that "no LNG carriers appear to be approaching the strait for now."Fielding also highlighted the "big unknowns" surrounding the ceasefire, including whether it is set to hold, and how soon shipping could resume in the Strait.Ian Mikkelsen, equity sector analyst at Wells Fargo Investment Institute, said that the disruption to global natural gas supplies could have a "significant lasting impact" on global markets. He noted that Qatar supplies about 20% of global LNG, and Iran's attack on the Ras Laffan industrial complex has reduced the plant's LNG production capacity by 17% over the next three to five years, accounting for an almost 3.5% loss in global LNG supply.He said that the global LNG market is characterized by supply flexibility, as about 35%-40% of global LNG volumes are traded in the short-term spot market. "We expect to see other global supplies shift to fill the gap in output from Qatar," he said.This could, however, pose an inflationary risk to Asian and European economies that partially rely on natural gas imports, he said. "Fortunately, we expect US natural gas prices to remain relatively insulated from this impact due to the regionally fragmented structure of the LNG market," the analyst said.

-- (Updates with comments from Gary Cunningham in the 13th paragraph and Natasha Fielding of Argus Media in the 14th, 15th, and 16th paragraphs and Ian Mikkelsen of WFII in the 17th, 18th, and 19th paragraphs.)

As the ceasefire between the US and Iran led to steep declines in natural gas prices, leading analysts have warned that it might be too early to assume that the worst might be over, with plenty of uncertainties and unresolved factors hanging over global energy markets.

On Wednesday, Cyril Widdershoven, a geopolitical strategist, highlighted that the Strait of Hormuz, a strategic chokepoint in this conflict, "is not open," and in fact, it was now being "conditionally managed," with Tehran now retaining significant leverage over global energy flows.

He noted that despite the drop in prices, risk premiums continued to remain elevated for oil, liquefied natural gas, and shipping markets, which he viewed as a sign of stress.

Widdershoven also highlighted a "structural fault line" created by Tehran's control over the Strait of Hormuz, leaving the Organization of the Petroleum Exporting Countries increasingly exposed to a contested chokepoint.

He concluded by saying that the ceasefire announced on Tuesday was not a de-escalation, but rather a shift toward "controlled instability," which he said would have profound implications on maritime trade, energy security, and geopolitics going forward.

Daniel Hynes, a senior commodity strategist at ANZ, echoed similar concerns while noting that no LNG tankers had passed through the Strait since the conflict began in late February.

He also warned that even if the shipping route were to completely open, the markets cannot make up for the "missing Qatari output" quickly, which he said would limit the downside for LNG prices, amid inventory drawdowns and demand rationing.

In a research note published on Wednesday, JP Morgan held a similar view, particularly on European LNG prices, citing intensifying competition, amid low European storage and rising Asian cooling demand.

The bank said that it expects Dutch TTF prices to average 55 euros ($64.27) per megawatt-hour in Q2, 60 euros/MWh in Q3, 65 euros/MWh in Q4, and 53.25 euros/MWh for the whole of 2026.

Similarly, for the UK NBP, the bank raised its price forecasts, now expecting prices to average at 133 British pence ($1.79) per therm in 2026 and 119 British pence/therm in 2027, compared to its earlier forecast of 71.0 British pence per therm.

This, it said, was based on the assumption that "Qatari volumes return for winter at 80% capacity utilization," as Europe begins reinjections into inventory at one of its lowest levels on record.

According to Gary Cunningham of Tradition Energy, LNG faces a tougher road to recovery, one that could take years, since "Qatari facilities were hard hit by Iranian strikes."

Noting the overnight selloff in US natural gas, Cunningham said that he expects a reversal and sees gas prices at "$3 for the near term and $3.25 for summer." He noted that "we are already seeing the recovery in US Henry Hub prices."

According to Natasha Fielding of Argus Media, "we are a long way from normal in the global LNG markets," which she said was reflected in the prices, which continue to remain above pre-crisis levels.

She said a further drop in prices would depend on traffic flows through the Strait of Hormuz, while noting that "no LNG carriers appear to be approaching the strait for now."

Fielding also highlighted the "big unknowns" surrounding the ceasefire, including whether it is set to hold, and how soon shipping could resume in the Strait.

Ian Mikkelsen, equity sector analyst at Wells Fargo Investment Institute, said that the disruption to global natural gas supplies could have a "significant lasting impact" on global markets. He noted that Qatar supplies about 20% of global LNG, and Iran's attack on the Ras Laffan industrial complex has reduced the plant's LNG production capacity by 17% over the next three to five years, accounting for an almost 3.5% loss in global LNG supply.

He said that the global LNG market is characterized by supply flexibility, as about 35%-40% of global LNG volumes are traded in the short-term spot market. "We expect to see other global supplies shift to fill the gap in output from Qatar," he said.

This could, however, pose an inflationary risk to Asian and European economies that partially rely on natural gas imports, he said. "Fortunately, we expect US natural gas prices to remain relatively insulated from this impact due to the regionally fragmented structure of the LNG market," the analyst said.