Natural gas underpins 85% of Iran’s and 70% of Israel’s power generation mix, making regional energy assets highly vulnerable amid rising Israel‑Iran hostilities, according to JPMorgan.
Iran’s Gas Exports Face Heightened Threat
Third‑Largest Producer: Iran exports via pipelines to Turkey and Iraq, but JPMorgan warns these undifferentiated gas assets are “particularly vulnerable” to disruption.
Regional Impact: Should exports halt, Turkey would pivot to Russian pipeline supplies and global LNG, while Iraq—lacking alternatives—might resort to heavier fuels, risking grid stability.
Israel’s Precautionary Shutdowns
Domestic Prioritization: Israel has already shut two of its three production fields, suspending exports to Egypt and Jordan to secure local supply.
LNG Constraints: Limited regasification capacity in the Eastern Mediterranean caps Israel’s ability to import LNG to fill the gap.
Emerging Mitigants and Infrastructure Developments
JPMorgan highlights two Floating Storage Regasification Units (FSRUs) due to deploy in Egypt, which could bolster North African import capacity—though gains may be partially offset by increased output from LNG Canada.
Real‑Time Natural Gas Pricing
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Key Upcoming Energy Events
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Investor Takeaways:
Supply Disruption Risk: Escalation could trigger immediate price spikes and force major importers into costly LNG markets.
Infrastructure Investments: FSRUs in Egypt offer partial relief but won’t fully offset regional shortages.
Diversification Imperative: Energy consumers and utilities may need to accelerate diversification of gas supply and storage to hedge geopolitical risks.