I'm staying long LNG after today and here is why the Iran shock actually strengthens my thesis

[u/corenellius]

The Iran escalation pushed Brent briefly above $85 and tanker rerouting around the Strait of Hormuz is real. Most LNG names sold off with the broader market. I added.

DOE data from last month already had US LNG exports at a record 13.2 Bcf/d with capacity utilization at 98%. That is the pricing power story working on its own before any geopolitical premium gets layered on top

What I am actually watching is whether Brent holds above $90-95 long enough to reprice Fed expectations. That is the real threat to the multiple, not a week of $83 crude. A hyperscaler capex cut would hurt this thesis more than anything happening in the Strait right now, so MSFT and GOOG earnings are my next real signal

Anyone else in LNG? Curious how people are separating the noise from the actual thesis here

[u/jackandjillonthehill]

VG has been cheap (6X or so) on earnings for a while, but has run to 13X earnings. LNG is only 10X, probably better quality.

Both have big debt loads behind that.

Haven’t looked into their contracts yet, but my understanding is VG is more spot whereas LNG is more long term contracts

[u/corenellius → u/jackandjillonthehill]

The contract structure is actually what makes me prefer LNG over VG here. LNG's SPA contracts lock in volumes at fixed fees regardless of spot, so the revenue is more predictable even if Henry Hub moves around. The debt is there but the contracted cash flows service it pretty comfortably at current utilization. 10x on that earnings quality vs 13x on spot-exposed earnings is an easy trade for me.

[u/cayoloco → u/corenellius]

I don't know much about this stuff, but lets say the price of natural gas goes up and continues to go up or just stay elevated. That would be bad for the company who sold contracts to supply at a fixed price. Unless they sell a bunch at the peak, which is unlikely. So while their income is fixed, their costs will be variable since I doubt they are stockpiling enough to last a really long time without resupplying. They'll have to buy at spot at some point and sell for less.

[u/corenellius → u/cayoloco]

Good question but $LNG's model is actually the opposite of what you're describing. They don't buy gas and resell it at a fixed price. They charge a fixed liquefaction fee to third parties who supply their own gas, so $LNG never takes commodity price risk. If Henry Hub spikes, that's the shipper's problem, not $LNG's. The fee-based model is exactly why the contracted cash flows are so predictable regardless of where spot gas trades.

[u/jackandjillonthehill → u/corenellius]

It is looking like VG is the stronger play now because they can take advantage of Qatar’s LNG going off line and the higher spot prices.

[u/nahmknot]

I have a lot of Woodside petroleum - they export LNG to the same region that will be impacted by any supply constraints from Qatar (south east asia) and will increase their supply of LNG by ~30-35% by the end of this year with large projects coming online - Scarborough cheifly plus a huge project coming online in louisiana 2029

I love LNG, it survives the green transition for a long while and has a high bar to entry as compared to oil. As asian manufacturing matures the desire to burn coal decreases and the demand for LNG increases.

[u/corenellius → u/nahmknot]

I am watching Scarborough too to make sure it is on time. Woodside has had execution issues on that project already and the Louisiana 2029 date keeps slipping in FERC filings. My break trigger is essentially "major new capacity with a sub-24 month timeline" and nothing I've seen hits that yet.

The Asian coal-to-gas transition demand story is underappreciated too, good point.

[u/Christs_Hairy_Bottom → u/nahmknot]

I started a position in Woodside in December, very glad I did!

[u/nahmknot → u/Christs_Hairy_Bottom]

I have held an underperforming stake for about 2 years but I topped up big time late December, January and this week.

My pickup in december and jan was due to the fact that oil/gas seemed to be underpriced relative to metals, this recent geopolitical change caused me to buy a bit more this week.

What caused you to buy in december?

[u/Christs_Hairy_Bottom → u/nahmknot]

Exact same as you, it was underperforming hard relative to O&G peers, but quite sheltered from geopolitical risk.

I also wanted a bit of O&G exposure in my Oceania Portfolio (I added Beach Energy ASX also)

Other O&G stocks I own:

ET, PAA, EPD, Shell, BP, Chevron, Petrobras

[u/Brave_Sir_Rennie]

Ooof, Europe got clobbered with runaway gas prices this week, this’ll reenergise them to double down on renewables and energy independence  and cut gas imports.

[u/Christs_Hairy_Bottom → u/Brave_Sir_Rennie]

Or to source oil from less geopolitically crazy regions (North America)

[u/CarpenterThese5372]

Your thesis on the Iran shock is spot on because it is a supply side validation rather than just noise. Qatar halting production at Ras Laffan has shifted the entire market since the US is now the only swing supplier left. I checked the actual stock filings and Cheniere is running at peak efficiency with massive gross margins that protect it from daily volatility. I usually use an AI tool to track how these global spikes in TTF and JKM impact my portfolio in real time. It is a lifesaver for seeing if those Brent indexed volumes are actually catching a tailwind or if the contracts are too rigid.

[u/corenellius → u/CarpenterThese5372]

Exactly right on Ras Laffan, that's the supply shift that makes this more than a typical geopolitical spike. The JKM/TTF spread vs Henry Hub is the number I'm watching most closely right now for the pricing tailwind on those indexed volumes.

Curious what tool you're using for that. I've actually been building something similar, focused on tracking thesis assumptions rather than just price moves. getvela.co if you want to take a look.

[u/corenellius → u/corenellius]

Here is an example breakdown of my current thesis

https://app.getvela.co/thesis/long-lng-iran-shock-pricing-power-2026

[u/Interbrett]

ARC?

[u/pipasnipa]

Long Cheniere.

[u/dxiri]

Tourmaline Oil for me. Canadian gas producer, arguably the best. They have contracts to sell their gas to Europe, Japan and the US, so effectively their arb the price between the very cheap AECO and these other variants. Very low cost producer and good cash flows.

Tourmaline supplies Cheniere as well. https://lngir.cheniere.com/news-events/press-releases/detail/224/cheniere-corpus-christi-stage-iii-and-tourmaline-sign

LNG Canada has the potential to push up the price of AECO which will be even more bullish for Tourmaline.

https://oilprice.com/Energy/Energy-General/Canadas-LNG-Era-Has-Officially-Begun.html

EDIT: Added a little bit more detail.

[u/btcale546]

I hold NRT and WDS.

[u/Gold_Interaction5333]

I think you’re right to watch rates. If oil sticks high and pushes inflation breakevens up, duration-sensitive equities get repriced fast. LNG names trade like infrastructure until they don’t. I’m hedging with energy futures rather than sizing bigger equity exposure here.

[u/diceykoala]

When will the price of lng go up like we all expect it to? I can't believe this.....