Gulf Ceasefire: fragile or firm?

A fragile ceasefire in the Gulf offers a moment of relief;  but is it already beginning to unravel and will it have lasting implications for gas supply in the region and far beyond?

Recorded on the morning of April 9, amid fast-moving geopolitical developments, this special episode examines what the latest developments mean for global energy markets, LNG flows, and Europe’s energy security.

Is this ceasefire a genuine turning point, or simply a pause before further escalation? 

Host Richard Sverrisson speaks with Montel’s Deputy Editor-in-Chief Laurence Walker, before diving deeper with leading analysts Ana Maria Jaller-Makarewicz and Arne Lohmann-Rasmussen. Together, they unpack the reality behind halted LNG tankers, the uncertainty surrounding the Strait of Hormuz, and the growing risks facing global gas markets.

As tensions remain high and clarity remains low, one thing is certain: energy markets are entering a new phase of volatility.

#EnergyMarkets #LNG #Geopolitics #GulfCrisis #Ceasefire #GasMarkets #EnergyCrisis #EuropeEnergy #StraitOfHormuz #GlobalEnergy #EnergySecurity #Commodities #Podcast #EnergyTransition

Host
Richard Sverrisson – Editor-in-Chief, Montel News

Guests
Laurence Walker, Deputy Editor-in-Chief, Montel News
Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA
Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management

Editor
Oscar Birk & Alexandra Carlon 

Producer
Alexandra Carlon 

Transcript

Special Briefing From The Gulf

Richard Sverrisson – Editor-in-Chief, Montel News 0:07

Hello listeners and welcome to Plugged In, the Energy News podcast from Montel, where we bring the latest news, issues, and changes happening in the energy sector. Today's episode is a special edition, recorded against the backdrop of rapidly shifting events in the Gulf. With geopolitics evolving by the hour, it's important to note that this conversation was recorded this morning on Thursday, the 9th of April, and reflects the situation at that precise moment in time. We unpack the implications of a fragile ceasefire and what it could mean for global energy markets. From uncertainty around LNG flows and shipping routes to the critical role of Qatar's Raslafan facility. The stakes could not be higher. So, with that context in mind, a ceasefire that may or may not hold, LNG infrastructure still offline, and shipping routes far from secure. The question is, what does this mean for energy markets now and in the months ahead? Setting the scene for us today in this special episode on the Gulf Crisis is Lawrence Walker, Deputy Editor-in-Chief at Montel News. A warm welcome back to the podcast, Laurie. It's a very busy time.

Laurence Walker, Deputy Editor-in-Chief, Montel News 1:22

Thank you, Richard. Yes, it is indeed a busy time.

Richard Sverrisson – Editor-in-Chief, Montel News 1:26

We're focusing primarily on the ceasefire that's just over 24 hours old. How significant is it? Is it genuinely a turning point for energy markets or are we seeing an initial reaction that sort of running ahead of the action or the activity on the ground?

Tankers Wait For Guarantees

Laurence Walker, Deputy Editor-in-Chief, Montel News 1:45

I think it's certainly a very important development. It's something which I guess the market has been hoping for. What remains to be seen is quite what's included in the ceasefire and how negotiations go. So as we saw initially news of the Strait of Holmes potentially being opened as a result of this, you know, we've yet to see traffic going through it, or LNG traffic at least. And so and there there seems to be obviously some points of contention as well. There's uh you know, um whether, for example, attacks on Lebanon are included in the ceasefire or not. And so I think until some of these points get ironed out, we're not really going to know quite how um, you know, how much water this ceasefire will hold, and then and also how long it will, you know, will it will it last beyond the two weeks? And that's what we really need to see a substantial change to the market situation.

Richard Sverrisson – Editor-in-Chief, Montel News 2:35

And there seems to be a lot of noise or maybe some seems of misinformation even about vessels going through the straits in recent days. What are you seeing?

Laurence Walker, Deputy Editor-in-Chief, Montel News 2:45

Well, last last week we did see a ballast one without LNG on board, heading to Amman. It sort of clung to the Amani coast and and sort of snuck through. I haven't yet seen laden vessels officially going through. We have, I think, 14 vessels sat sort of within the the Persian Gulf, waiting, waiting to go. But I mean, looking at the screen here, beside me, we we can't see any really edging, edging much closer than they had been in the last day or two for now. So I think they're they're waiting. There's a lot of caution, there's a lot of waiting to see, you know, will it be safe to go through? Will they have to pay a toll? Will is the insurance there for them? What kind of guarantees there are because a ship a ship owner is not going to put his ship through until all of these answers have been given.

Why Ras Laffan Changes Everything

Richard Sverrisson – Editor-in-Chief, Montel News 3:36

And certainly the opening of the straits there doesn't seem to be very expensive or very costly for those ship owners and the insurance. And the other aspect as well, Laurie, is that you know one thing is opening the the Strait of Hormuz, but this actually, as you have reported on Montel News, saying that it means very little without an actually Qatari restart of production, LNG production. So can you sort of explain why Ras Laffan is the critical piece of this puzzle and it's not something that's likely to come back anytime soon?

Laurence Walker, Deputy Editor-in-Chief, Montel News 4:08

Yes, well let's not forget Ras Laffan is a massive export production and export facility it you know it provides getting on for 20% of global energy supply. It's offline at the moment, it's just not working. So um they stopped production soon after the war began. It will take a while you know, weeks to return production and start exporting again. The this two-week window doesn't really provide that that length of time. So I think they will probably want to see guarantees of there being more or a longer ceasefire or or you know hopefully even more signals of an end to to the conflict than this, because if it's if everything kicks off again after two weeks and they've you know just you know got themselves up and running, it's it's gonna be all all for nothing, as it were. So I think yeah, it needs to be longer, it needs to be very very clear how how gas is gonna get out of the region through the strait before we can really sort of see those big volumes coming out again. And that's gonna take probably time.

Richard Sverrisson – Editor-in-Chief, Montel News 5:11

And that requires a level of certainty and predictability. That's just not there at the moment.

Laurence Walker, Deputy Editor-in-Chief, Montel News 5:17

Exactly. I think while there's a lot of uncertainty, there's you know, no one really knows quite what's gonna be included. And while there's a chance of a sort of stream missile or something or other hitting a hitting a tanker, there's gonna be a lot of caution.

Richard Sverrisson – Editor-in-Chief, Montel News 5:32

Laurie, thanks very much for your input there.

Analysts Call The Truce Shaky

Laurence Walker, Deputy Editor-in-Chief, Montel News 5:36

Thank you, Richard.

Richard Sverrisson – Editor-in-Chief, Montel News 5:37

I'm very happy to be joined in this special episode on events in the Gulf with a very fast-moving situation by Ana Maria Jaller- Makarevicz, who's lead energy analyst at the Institute for Energy Economics and Financial Analysis. A warm welcome to you, Ana Maria.

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 5:51

Thank you very much for inviting me.

Richard Sverrisson – Editor-in-Chief, Montel News 5:53

And also joining us is Arne Lohmann Rasmussen, who's chief analyst at global risk management. A warm welcome to you too, Arne.

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 6:01

Thank you.

Richard Sverrisson – Editor-in-Chief, Montel News 6:03

So we we are recording on on Thursday morning. It's been barely 24 hours since this ceasefire was announced. It's looking quite flimsy, especially with Iran's reaction to the Israeli bombing of southern Lebanon and Hezbollah forces in southern Lebanon. Ana Maria, what's your take on this ceasefire? How how fragile is it?

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 6:26

I think it's very fragile. This is showing us that the LNG market is still very much at risk with the supply being disrupted. Even if the ceasefire is rich, we still are going to have some gas that is not going to be able to be transported. So there's already some disruptions on the Qatari LNG facilities. Even they have reported that some of them could take five to six years to be repaired. So even if it happens today, we are not going to go back to the situation two months before. So we are right now experiencing another reality where we have a lack of LNG in the world. And these negotiations are not a guarantee that the flow will be the same.

Richard Sverrisson – Editor-in-Chief, Montel News 7:18

I think we'll come back to some of those points later, especially on LNG production and exports from the Gulf. But Arne, what what do you make of the the current situation? How how how flimsy is this shaky ceasefire?

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 7:30

Uh, it is, as you said, very very shaky, and it's hard to see them to reach any agreement. They don't even agree on what was actually the sort of starting point of the negotiations, for example, this uh 10-point plan. So I'm really concerned that this will end up in that the war will start again in two weeks' time or even before. We saw that during the first negotiations, just before the war started, they were actually relatively close to an agreement, and then suddenly the war broke out.

Richard Sverrisson – Editor-in-Chief, Montel News 8:01

So, do you expect it to last two weeks this cease fire?

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 8:04

That's impossible to say. Let's see what happens on Friday. But one thing that's actually gives me a bit of comfort that did that this may succeed is that it's quite obvious that Trump is trying to get out of this some way or the other. Of course, he's trying to frame it as a big victory, but the truth is of course that he wants to get out of this.

Richard Sverrisson – Editor-in-Chief, Montel News 8:28

Absolutely. He's trying to find an escape route here, I think, or an exit, absolutely. And both sides are framing it as a victory, aren't they? Ana Maria, what do you think? How long could this ceasefire last? Do you think it could last another 24 hours or is it gonna go the full two weeks, do you think?

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 8:41

I don't think it will really last two weeks because we already saw yesterday that some of the conditions were not met, and that's the problem with the situation there, that nothing is predictable. Everything can change in a matter of hours. And as an energy user, for example, in Europe, we are affected by that constantly because the more we are importing the LNG, the more we depend on all these geopolitical issues that are outside our own control. So I don't see it happening soon. I would I would like it to happen soon. I would like that that the flows could go, that the war could end, you know, because it's also some humanitarian situation here too, in lots of countries around the world.

Richard Sverrisson – Editor-in-Chief, Montel News 9:32

Absolutely. We mustn't forget that, you know, the humanitarian issue here. And but Arne, if the role of Israel is quite crucial here as well, isn't it? I mean, do you see them stopping their actions in southern Lebanon against Hezbollah? Because that seems to be a sticking point for the Turanians.

Expensive Crossings And Turned Tankers

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 9:47

They at least showed yesterday that they do not accept the the ceasefire. I think we can conclude that they may be under a lot of pressure now from the US. I hope they are able to exert that pressure. So that could be a part of the solution that they actually stop the bombings. But I'm not big very optimistic on on that account. So of course that is one of the sticking points. But I think the whole discussion of what 10-point plant are they actually looking at. It seems like there's more plants out there, there's no coordination, it just makes things very, very uncertain. And yes, this might break down. And and but we also have to look at the realities on the ground. What's the reality that the Strait of Hormuz is not opened? The reality is that there's a lot of US forces in the area. The reality is that Iran is not defeated, they're still able to fire missiles, drones towards their neighbors, and the reality is that the Ras Laffan, the LNG facility is not operating as of as we speak.

Richard Sverrisson – Editor-in-Chief, Montel News 10:52

How many ships remain in the Gulf, Ana Maria? Have you done any research on what you know how have that have any passed through the straits so far? I'm talking LNG tankers in particular.

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 11:03

Yeah, I think if I'm not wrong, Greek LNG terminal passed yesterday, or the day before yesterday on these days. That's the one that I know. I know that there are some Qatari LNG, two of them, that tried to cross and they went back. So, yes, there are still some of them that that are waiting there, waiting to be crossed. And what this is creating is also that those the prices of that LNG is gonna if it crosses and if they have to pay the toll, it's going to be a very expensive LNG.

Security Limits And Shipping Gridlock

Richard Sverrisson – Editor-in-Chief, Montel News 11:35

Exactly. So I think that's another area that I think I'll return to in a second. But when do you expect shipping to resume if at all? I mean, is it's is the two-week window? Will we see LNG tankers moving out of the Gulf, or will they remain because of the problems that Anna Maria has highlighted there, the expense and and the insecurity, etc.?

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 11:55

Yeah, it's definitely the security situation is the thing for especially the Western companies, and that nobody can send vessels through the strait if they don't have security guarantees from US, Iran and you have like an official statement from the IMO, for example, the International Maritime Organization, that the strait is now safe. You'll probably have some Asian countries, maybe Iran themselves, maybe some Russian tankers going through. I think the one of the issues for the LNG is that it's mostly Western companies that actually operate LNG vessels. Another thing that I think is a bit underestimated here is actually that very few vessels will dare to go into the Persian Gulf. You can argue why should you go into the Persian Gulf, but you need to have vessels going in to pick up LNG because you're not gonna go in the next two weeks because you maybe end up being caught inside the Persian Gulf if this breaks down and then you are in an even worse place. And then there's the whole congestion issue. You cannot just get these all these ships out, it's not just LNG ships, the sangars, the bulk carriers, everything, container ships out in one day before the war. Around, I think I want 130 ships a day cross the the strait. And if you have to go across this Iranian island along the Iranian coastline, we are probably talking maybe 10-15 vessels a day. This is a logistical nightmare. And then we also have to remember I think the the last ANG ship will arrive in Europe, or maybe it arrived yesterday, and then it will take another month before the next one arrives, at least because it takes a month before they arrive in Rotterdam area. That's basically the time it takes to go from the Persian Gulf to here. So we are we are missing out at least a month and probably more than that. I don't think we will see a normalization of the shipping situation during these two weeks. That's logistically impossible, and also from a security issue, not possible. We have to have a firm peace deal before that will happen.

Richard Sverrisson – Editor-in-Chief, Montel News 13:55

Yeah, because the risks are just too great. No ship owner or insurers are willing to send vessels back in or out.

Europe’s Low Storage Problem

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 14:02

And of course, you can find some exceptions, some smaller countries, some smaller shipowners and so on, but on a broad scale, no. Ana, Ana Maria, what's your view here?

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 14:12

Yes, I agree. I think we are going to start feeling the effect this month onwards. I think in March we were not confronted with the reality of the energy crisis in Europe, because we were still receiving those cargoes that had left Qatar. In February, we still were receiving those cargoes that were coming from the US. But we already saw in March some cargoes that were diverted from Europe to Asia. Yeah, we saw some US cargoes, we saw some Nigerian even cargoes. So, and then if we are still going to have no Qatari LNG from this month onwards is when we are going to start feeling the effect of the crisis in the continent. Also, we know that we have our storage is very low, has been the lowest in the last three, four years. So we have to refill storage. Yeah. So that also will demand more LNG imports at that moment. Our the capacity to import more gas pipeline is already full. You know, there's not much buffer there where you could buy import more gas pipeline. We know we are coming up to the ban on Russian gas. So that's a situation that we have to be aware this year, that we really need to start implementing policies on replacing that gas demand because we are going to be confronted with a very very very strong crisis if we don't start acting right now.

Richard Sverrisson – Editor-in-Chief, Montel News 15:47

Absolutely, Ana Maria. What for you, Ana, what does reopening of the Strait of Hormuz actually look like in practice?

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 15:54

In practice, I don't think it's going to be reopened 100% as it was before. Of what we have seen so far is the situation. I have read some articles also that the situation is going to be completely different to the one we had before March, in February, January, where there were lots of vessels going both ways, you know, with no restriction at all. Now we don't know exactly what this toll, if it's going to be implemented, will mean. Also, maybe we will going to see, I read also some articles that we are going to see more, maybe pipelines being built to bypass the crossing of the Strait of Hormuz. So maybe in the medium longer term, the situation will be different too. They are going to the there's an effort to diminish the importance of this choke point.

Asia Outbids Europe For LNG

Richard Sverrisson – Editor-in-Chief, Montel News 16:44

Absolutely, Ana Maria. Well, what's your point? Well, how do you see this out, Arne?

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 16:48

I think Anna Maria pointed to a very important thing that these LNG vessels that turned around, turning to Asia, is a reflection of that at the moment, and I think that will be the case for the rest of the year, there's a big competition between Asia and Europe for LNG. And what basically happened during March, and why did these investors turn around? Because Asia was bidding up the price. So the so-called net bank, and net bank from US, because US is not a big supplier of LNG. It is more attractive to send LNG to Asia than it is to send it to Europe. The netback, the netback is what is left after you pay the US gas, you pay the gasification and the shipping cost, then it has a better pickup, a better netback sending vessels to uh to Asia. And we will see this building more, in my view, during during this year. It will not be as bad, I think, as in 2022. Remember when TTF prices were 275 euros per per megawatt hour, but it will continue. And as Ana Maria said, Europe, we have to refill our inventories. They are at a very low level, even below the 2022 level. So that is a bit of a dilemma. We need to refill, but we also have to avoid bidding up prices too much. But that is what's going on in the moment. This is a kind of bidding more, and we have been losing out on that. But it doesn't mean there are still LNG ships coming to Europe, and the net bag is more equal at the moment, but it changes by the day.

Are Gas Markets Mispricing Risk

Richard Sverrisson – Editor-in-Chief, Montel News 18:26

But market prices so far aren't really pricing in this risk of of a supply squeeze this summer or later this year Arne. So we've seen the price around 50 between highs of 70, but very far from what we saw in 2022. Do you think markets are underestimating the risks here?

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 18:44

Yeah, I think they're underestimating, but I also think we have to be careful saying that this is not as bad as 2022. No, it's not as bad as 2022, but it's a bit like saying that, oh, a recession is not bad because it's not as bad as the depression in the 1930s. The 2022 was an exceptional situation, but gas at 50 or 60 or 45 euros a megawatt hour is still a nightmare for the industrial sector in Europe that are dependent on gas. Remember, the gas price has barely moved, or if anything, actually a bit lower in the US during this. So, from a competition point of view, this is certainly the last thing that uh especially the German energy-intensive gas consumers need. So, so yes, it doesn't bring them much comfort to saying, oh, but it's not as bad as 2022. It is quite bad, also at 45 or at 50 and 60. And I think that is a concern that is going on. We can also say about how how is the how is the forward curve looking in if we look at TTF or THC, the German gas, it's very flat for for this year. That's very different from what you see, for example, in the oil or gas oil futures, where you have the so-called backwardation that the forward prices are lower because you believe that over time the situation will solve. So the higher price is high today. Brent is around $100 today, that's a June contract. The dated brand is 120 plus, but December you can buy brand at $80. So that's called backwardation, right? But in gas, we just see prices move up and down for 2026 in a parallel shift. And it underlies exactly what Ana Maria is saying: that what we are doing at the moment, we are pushing in front of us a bigger and bigger problem. That we need to refill these inventories that unfortunately are very low level after a damn cold winter. And that's why if we have an issue today in the spot, it affects the winter prices next winter because it moves things up and down, because that's where the issue will arrive. And then another thing which is a consequence of the war is of course that the destruction of the uh two LNG trains in in Qatar means that the whole outlook for the LG market, in my view, have changed for the next couple of years. We were looking into a situation where the market will be abundant with LNG, a lot of US LNG coming to the market that will still be coming to the market, but it cannot make up for the missing LNG from Qatar. So we're looking into a much tighter market, not just next winter, but also in 2027, maybe also in 2028. So if there's a market that has really been turned upside down by the war, it is the LNG market. And when the LNG market is turned upside down, the TTF market, the European gas market in general, is also turned upside down. So that's probably where you see the biggest impact of the war on a medium to long term basis.

Could TTF Reach Three Digits

Richard Sverrisson – Editor-in-Chief, Montel News 21:48

Not just short term, but the short term issue is also quite critical here as well, Arne. Would you say that prices could go as high as hundreds this year, hundred euros per megawatt hour on the TTF? Is that something that's realistic?

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 22:01

Yeah, yeah, yeah. I think that we shouldn't certainly not rule that up. I think we were at 70. So certainly that is a possibility, especially if we get to the autumn and we still are missing LNG from Asia, big competition from the rest of from the Persian Gulf, big competition from Asia, and we haven't been able to sort of fill up to a reasonable level for the inventories. Yes, then the 100 headle comes into play. I'm pretty sure we will not see the prices we saw in 2022.

Richard Sverrisson – Editor-in-Chief, Montel News 22:31

But there's still there's room for upward direction, put it that way.

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 22:35

I'm afraid yes, I'm afraid.

Richard Sverrisson – Editor-in-Chief, Montel News 22:36

Anna Maria, what what's your take on that? Where where could where could what kind of direction could prices move in?

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 22:41

Yeah, I think it depends on the escalation of the crisis, and that's a big issue. We can see that when we compare it with the 22 crisis, the prices of the 22 crisis, the prices went up in August. So a few months later, because the the escalation was there, you know. Another situation, in 2022, we were depending almost 45 percent from one supplier, and that was the biggest risk. Now we have reduced gas demand by almost 17, 18 percent. So that has helped quite a lot to to diminish the effect of this crisis, and also because we let's say we are importing from other sources. But the gas that is lost into the market is more than the gas that was lost in 2022. So that is what is important. We are not seeing the effect directly because this is a global LNG market that goes to all the suppliers. But as a whole, as the deficit of gas into the market is more than what we lost in 2022. So if this war escalates, it could become a very, very critical energy situation for all of us.

Richard Sverrisson – Editor-in-Chief, Montel News 24:06

And Ana Maria, sorry to interrupt, but do you think it will escalate then? That this is two weeks, this the ceasefire won't last two weeks, and that's we're back to full war?

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 24:13

I cannot, I honestly I don't want to give my word on that because we have seen that as I said, something happened in the morning, in the afternoon, something is different. We are noticing that now there's a power there. There's a fight for power, for the control of the street of hormuz, the control of the that's controlling the right now the street of hormuz, you are controlling the oil and gas market globally. So there's a little bit of problem here. So I don't know. I am not politically very wise, but I can just see is that the situation keeps changing, and that is what is what it gives more risk to the market because there's not there's very volatile right now.

Escalation Scenarios Beyond Hormuz

Richard Sverrisson – Editor-in-Chief, Montel News 25:03

Very little certainty, very little predictability, it's just very, very fast moving, very dynamic, and and ever changing and unpredictable. As many things with President Trump. But Arne, you were gonna come in here and comment.

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 25:17

I think as Maria said it herself that the LNG market is a global market ex-Northern America. So we shouldn't be looking too much into that. Oh, maybe Europe doesn't import that much LNG from the Persian Gulf because it doesn't matter, because the LNG market is a global market outside North America. What I'm afraid of the escalation is that Iran has shown that they are ready to attack these trains at Qatar at the South Pass field, and it's just across the Persian Gulf. And if they want to escalate, what can they do? They can close the Bab Elman Dip straight into the Red Sea, they can attack energy facilities in the Persian Gulf, and the and the Qatarian energy facilities are a part of that, and they can actually incur a lot of pain to the global economy doing that. It's a bit sad, but actually, those who will win from that is actually the US because they are energy producers, it's actually Israel because they're also a gas producer, but I don't think they think about that.

Qatar Restart Timelines And Supply Gap

Richard Sverrisson – Editor-in-Chief, Montel News 26:21

So, in terms of the Qatari uh energy production and export what's a realistic timeline for production to restart and what are the key hurdles do you think that could slow that process down?

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 26:33

First of all, as Ana Maria said, the two trains, there are 14 trains at the Ras Laffan facility. Qatari Energy said themselves that it was it would take three to five years to restart them, and I don't think we have any reason to believe that they are underestimating the impact or more on the or over is overstating the impact thing. So I think that's a fair assessment. So that is out. It also means that that expanding production is probably out of the uh the question. The facility is completely closed down now. I hear everything from two to six months time to restart it. I don't know, Ana Marie, if you have a better number there, but but it seems to be in that area, and but they need to have a a security, a stable situation, security that they will not face new sites. And apparently they don't see that yet. So we are potentially talking summer, even autumn, before LNG is starting to come out of the Persian Gulf in any meaningful way, and and in a worst case scenario, Europe and the global economy will have to live without the Qatarian LNG over the summer, going into the autumn through the whole refilling season in Europe. That's a bit of a concern to me because then the bidding war for LNG will continue.

Energy Security And Faster Transition

Richard Sverrisson – Editor-in-Chief, Montel News 28:00

Well, absolutely. And a final question, really, because we're running a bit out of time, unfortunately, for this special episode. But Ana Maria, what what do you think the wider impact is going to be on the sort of global energy system? Do you think there's gonna be bigger push in certain markets, such as the European energy market, to accelerate the energy transition and move away from fossil fuels and the dependency on gas, for example, or will it slow it down and people look for alternative suppliers?

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 28:30

Well, I think it's going to accelerate the transition. I think, well, I tell you even personally, right now I'm stalling a installing a heat pump here at home. I think, this crisis is telling us is that we are very much dependent on every global outcome, every global crisis is affecting our energy market. We are not energy independent. So the only way that we become more energy independent is because we can produce our own energy. And with renewables, with wind farms, yes, you have to buy a one-off investment, but you don't have to buy every month the fuel for the wind farm, or you know, so you reduce the risk. You did reduce the risk of importing a fuel. So what we need to do is how can we reduce that risk? How can we be more isolated from all these crises? Because we had a crisis in January, we are now having another crisis. Even if the Street of Hormuz is reopened and everything is solved, in six months' time we could have another crisis. So that is what is showing us the situation right now. That we are constantly dependent on outside crises that are affecting our own energy, are putting the prices up as an end user. We are paying quite a lot of for the gas and electricity. So we need to think how can that be reduced, and mainly how can we increase our own energy security and energy independence.

Richard Sverrisson – Editor-in-Chief, Montel News 30:06

Absolutely, final word from you Arne. How do you think this fresh crises gonna change sort of global energy system here? That's not what industrials want, that's not what utilities want, it's not what households want, is it?

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 30:27

No, yeah, first of all, I think I think we have moved from where we were dependent, if seen from a European perspective or global perspective, dependent on Russia. That was not a good idea. It turned out maybe it was not a good idea to be dependent on the Middle East. There was not this stable supplier. I think that's actually the biggest concern of countries like the Emirates and the Saudis, that they are no longer seen as as reliable suppliers. And we are now moving to be dependent on the US, and you can think about that what you want, but I'm a bit concerned about that. And then I fully agree with Ana Maria that this will support the green transition, both from a sort of green perspective, but also because the transition is geopolitics. I think we'll also see more focus in in uh Europe and Asia for that matter on producing own fossil fuels. It's a part of the solution, whether we like it or or not to do that. And then it's correct that that demand is also part of the solution. The the sad thing is unfortunately that a lot of the drops we have seen in gas demand, for example, in Europe since 2022, it's actually from the industrial side. Something is transition, but it's also closing down of energy heavy production, especially in Germany. I think if you look at industrial production in energy intensive, energy-intensive industrial production in Germany, it's down, I think it's 23% since the beginning of 2023. So it's so it's one more than one-fifth has been wiped out. And it's not like that production doesn't exist anymore, it just exists in other places of the uh of the world. And of course, that doesn't do any good for the climate. So that's the issue here. We should have demand destruction, but we should have demand destruction that in the right way that we actually change into, for example, electricity. That is also happening, definitely. But unfortunately, that's also happening that industrial production is basically moving out.

Richard Sverrisson – Editor-in-Chief, Montel News 32:28

Well, Ana Maria and Arne, thank you very much for joining the Plugged In Podcast. I feel we could talk for hours, but we have to draw this to a close today. So thank you very much indeed.

Arne Anders Lohmann Rasmussen, Chief Analyst, Global Risk Management 32:38

Thank you.

Ana Maria Jaller-Makarewicz, Lead Energy Analyst (Europe), IEEFA 32:39

Thank you. That's been an honor.

Richard Sverrisson – Editor-in-Chief, Montel News 32:41

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