The U.S. leads the world in both crude oil and natural gas production, but the top exporters are already shipping near their capacities, allowing them to reap larger profits but not fill the supply gaps caused by the temporary loss of 20% of global oil and liquefied natural gas (LNG) volumes triggered by the effective closure of the Strait of Hormuz near Iran.
President Donald Trump’s pledge late on March 3 to insure and protect oil and LNG tankers in the effectively shuttered waterway helped stop the surge in oil and gas prices. Energy analysts have pointed to expensive or unavailable insurance coverage as a key reason for the lack of traffic, in addition to the threat of attacks. But the unprecedented explosion of a Russia-flagged LNG tanker in the Mediterranean added more unease to global energy markets. Reuters reported that Ukraine was suspected of a drone attack on the vessel.
