No one knows, of course, how the attack on Iran will play out in either the medium or long term.
The energy and financial markets were closed for the weekend, so they’ve given us relatively subdued feedback on the events. It will be “interesting” to see on Monday how the markets price in the risks to global oil and natural gas supplies. The war is taking place against a backdrop of low and falling oil and natural gas prices on abundant supplies.
As I look ar the early market price reactions, though, one “fact” pops out at me. If you’re looking to profit from a speculation on the worst case scenario–by which I mean the shutdown of the Strait of Hormuz to global shipments of oil and natural gas, natural gas looks to be the most lucrative bet on this scenario.
Official targets for oil prices haven’t yer been updated, but right now it looks like the worst case scenario for Brent crude is a pop to $100 barrel.
The latest published Brent quote just before the Iran attack headlines was $72.87 per barrel. Over the weekend, traders put Brent at about $80 a barrel,” roughly a 10% jump on the Iran war news, to be reflected when futures reopen.
A jump to $100 would be another 20% from that expected Monday open.
The move to $100 on a worse case scenario–actually even the move to $80 on Monday–is unlikely to be smooth. Since the start of the year, oil traders have been betting heavily that conflict would break out. The biggest pile up of speculative bullish bets in two years means that any rally at the open could be met with significant profit taking.
The speculative positions aside, why the relatively muted response to a worst case scenario tHat includes the closure of the Strait of Hormuz to oil tankers.
The physical oil market does have some buffers to cushion the disruption. Key Gulf exporters including Saudi Arabia sharply increased their oil loadings in the weeks leading up to the attacks, and the kingdom has storage assets in other parts of the world outside the Persian Gulf and a pipeline to the Red Sea that will allow it to divert some of its exports. Global floating inventories of oil have ballooned over the past year, pointing to an oversupplied market, although much of the excess has been black-market Russian and Iranian oil. OPEC+ announced a modest increase in supplies from key members for April, and many countries, including the U.S. and China–the world’s two largest consumers–have strategic reserves of oil to tap if the need arises.
Natural gas prices look to be much more sensitive to the worst case scenario.
Why?
Natural gas price forecasts were already on an upward march in 2026. In January Goldman Sachs lifted its 2026 forecast for European natural gas by 24% mainly due to colder‑than‑expected weather and tighter balances.
And then there’s the Qatar problem.
In 2024, Qatar exported roughly 77 million metric tons of LNG (liquified natural gas) equal to 18.8% of global LNG exports, according to the International Gas Union’s latest World LNG Report. That makes Qatar the third‑largest LNG exporter after the U.S. and Australia. Those three countries account for about 60% of world LNG exports.
Just in case you want to know where that energy goes, here are the top five global consumers of LNG:
China – about 78–79 million metric tons of LNG imports in 2024, roughly 19% of global LNG demand.
Japan – about 67–68 million tons.
South Korea – just over 47 million tons.
India – about 26 million tons.
Taiwan – about 22 million tons.
And there is essentially no alternative way to get Qatar’s LNG to the global energy markets except through the Strait of Hormuz. Analysts estimate that around 94% of Qatar’s LNG exports pass through the Strait of Hormuz. Qatar has no alternative LNG export infrastructure that fully bypasses Hormuz; cargoes load at Ras Laffan and then must exit the Persian Gulf through the Strait before heading via the Indian Ocean to Asia or via Suez/Cape to Europe.
ICIS, a global energy price-tracking service, and other analysts estimate that a three‑month serious disruption to Qatari LNG via the Strait of Hormuz could push front‑month European natural gas futures to a rough tripling from Monday’s likely price level.
There is, of course, no guarantee of this worse case scenario, but with the United States and Israel pushing Iran toward a “no good alternatives” scenario, I find it hard to disscount the possibility that Iran will try to close the Strait of Hormuz.
And if that happens, the big profits from this unlikely event will go to traders long natural gas–particularly long European natural gas–and not to traders long oil. (Who will still do very nicely, thank you.)
Unfortunately…
there is no good, clean way for U.S. investors to buy futures on the European natural gas benchmark index (TTF). TTF is the Title Transfer Facility, the main virtual trading hub and price benchmark for natural gas in Europe, based in the Netherlands. It is essentially the benchmark for European natural gas prices.
Because TTF is a regional, infrastructure‑constrained benchmark, and there is no U.S. TTF‑tracking fund, any U.S. ETF exposure is at best a proxy. If you really want high beta to TTF in an Iran‑war scenario, the only clean instruments are ICE Dutch TTF futures or the WisdomTree European Natural Gas ETC. Both are non‑U.S. products and U.S. brokerage firms will not sell these instruments to U.S. investors.
Which leaves you with the alternative of investing in U.S. natural gas futures and hoping that the price of the Henry Hub futures is closely correlated during this crisis with the TTF prices.
I think that’s likely. In stressed global gas markets (Ukraine 2022), Henry Hub and TTF can move in the same direction because U.S. LNG export demand links them. The danger to correlation is in markets responding to domestic weather, storage, and pipeline constraints.
The U.S. ETF to buy is the United States Natural Gas Fund (UNG).The fund was down 27.07% in 2025, and down 6.07% for 2026 as of the pre-Iran attack close on February 27.
I own shares of UNG in my Jubak Picks Portfolio where the position is down 51.35% since June 17, 2022. On Monday March 2, I’m adding United States Natural Gas Fund (UNG) to my Volatility Portfolio on my JubakAM.com subscription site.
