Oil Prices May Soar to $100–$150 if Strait Closes — Could $5 Gas Be Next? Iran’s Largest Gas Field Ablaze After Strike

Energy markets are on edge! Iran’s threat to close the Strait of Hormuz in response to Israeli strikes has sparked a 7% surge in oil prices—Brent crude at $74.23/bbl and WTI near $73, the biggest single-day jump since March 2022! The Strait handles ~20% of global oil (20-21M barrels/day) and 18% of LNG, so any disruption could send prices skyrocketing to $100-$150/bbl for oil and spike LNG costs, hitting Europe and Asia hard.

Flames have erupted at Iran’s South Pars gas field – the world’s largest natural gas field – according to reports in Iranian state media. Video footage circulating on social media and geolocated by CNN shows a large blaze and plumes of smoke rising from the gas field in Iran’s southern Bushehr province. The oil field was hit by an Israeli drone strike, according to the Iranian state media reports.

Add to that, the U.S. is entering the summer driving season (Memorial Day to Labor Day), when gasoline demand jumps 5-10% to ~9M barrels/day, per the EIA. This seasonal spike is tightening global oil markets, and with U.S. summer electricity demand (up 10-15% for AC) boosting natural gas use, LNG prices are feeling the heat too. A Strait closure could push U.S. gas prices to $5/gallon and make LNG exports even pricier.

 $Venture Global, Inc.(VG)$  , a U.S. LNG giant, is set to WIN BIG! With its Calcasieu Pass facility running and Plaquemines LNG coming online, the company is perfectly positioned to meet surging global demand if Middle East LNG from Qatar or UAE gets choked off. Europe, desperate for stable supply, will lean hard on U.S. exporters like Venture Global. Higher LNG prices = bigger profits, especially with their mix of long-term contracts and spot market sales. Plus, U.S. energy independence shields them from Middle East chaos, and rising prices could fast-track their CP2 LNG project.

But risks loom: a full Strait closure is unlikely (Iran needs its oil exports), and sky-high oil prices could slow global growth, curbing demand. Still, the combo of geopolitics and summer demand is a perfect storm for energy prices. 

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