Henry Hub Snaps Back as Hormuz Shutdown Overrides the Weather Trade

The Reversal

Two days ago, NATGAS was down 10% on above-average temperature forecasts that crushed heating demand expectations across the eastern U.S. The selloff looked like a clean seasonal unwind — spring was arriving early, and the winter premium had nowhere left to hide.

That thesis lasted about 36 hours. April Nymex natural gas futures closed up 6.26% on March 11, tracking a broader energy complex bid as crude oil gained 5.5% on the same session. The catalyst wasn't domestic — it was the same one that's been reshaping global energy flows since late February: the Strait of Hormuz is effectively closed, and it's not reopening anytime soon.

The speed of the reversal is the tell. Warm weather should be bearish for U.S. natural gas this time of year. Instead, the global LNG supply shock is pulling hard enough on American gas to override fundamentals that would normally dominate the March tape.

The Global LNG Scramble

The underlying supply disruption hasn't changed since QatarEnergy declared force majeure on Ras Laffan exports following Iranian drone strikes on March 2 — but its downstream effects keep compounding. Qatar accounts for 19% of global LNG supply, and weekly exports from the facility have collapsed roughly 75%, from a typical 20 vessel loadings to a maximum of 5.

The Strait of Hormuz, which Iran announced the effective closure of on March 8, compounds the problem. Even if Ras Laffan restarted tomorrow, getting cargoes through the strait is a separate and unresolved crisis. No LNG tanker transits have been observed since February 28. The potential supply loss is 1.4–1.6 million tonnes of LNG per week from the Middle East.

The result is a massive call on American gas. U.S. feedgas flows to LNG terminals hit nearly 19 Bcf/d, with export terminals running at maximum nameplate capacity to backfill Qatar's absence. European TTF benchmark surged 55% to $16.7/MMBtu since late February; Asian LNG hit $15.77/MMBtu. At those international premiums, every available U.S. cargo gets pulled toward export, tightening the domestic market regardless of weather.

What to Watch

The EIA weekly storage report drops March 12 and will cover the first week of March — the period when warm weather was supposed to crush withdrawals. If the draw comes in below the five-year average pace despite strong LNG export pull, it confirms that the geopolitical premium is being offset by collapsing heating demand, and the price action is purely a function of export dynamics rather than domestic tightness.

The broader question is duration. The EIA's latest Short-Term Energy Outlook, released March 10, suggests Henry Hub could test $4.00/MMBtu by summer if Hormuz remains closed for more than a few weeks. Asia is the most exposed region — Pakistan sources 99% of its LNG from Qatar, Bangladesh 72% from the Middle East — and demand destruction in South Asia could eventually cap the global bid. But for now, the arbitrage between Henry Hub at $3.28 and TTF at $16.70 is the widest it's been since the early days of the European energy crisis, and that spread is the strongest force in this market.

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