Even as a massive LNG supply glut promises lower prices, emerging Asian markets lack the physical capacity to absorb it. A severe shortage of regasification terminals, storage, and gas-fired power plants creates a hard ceiling on demand growth, meaning cheap gas alone is not enough to clear the market.

While oil gets the headlines, disruptions to liquefied natural gas (LNG) supply are a more direct threat. LNG is a key energy source for data centers, so price spikes or shortages could derail the massive capital expenditures driving the AI buildout.

Even a brief closure of the Strait of Hormuz has immediate, lasting effects. Shutting in millions of barrels of oil and LNG damages production facilities, which can take over 60 days to bring back online, ensuring a recession even if the conflict ends quickly.

Unlike a shale well which can come online in quarters, a new LNG export facility takes four years to build. This long lead time means the market cannot quickly respond to supply disruptions, and today's investment decisions create gluts or shortages years down the line.

A rapid rebound in Venezuelan oil production is improbable, even with massive investment. The effort is constrained by fundamental infrastructure failures, like a deeply unreliable national power grid, which is essential for running upgraders and refineries. This makes a quick recovery lasting years, not months.

Re-establishing normal energy flows is not like flipping a switch. It can take months to recover even if a conflict ends quickly. Furthermore, if infrastructure like LNG plants or oil wells is damaged, the supply reduction and economic pain can last for years.

Unlike oil, restarting liquefied natural gas (LNG) production is a slow, complex process. The need to cool liquefaction trains from high ambient temperatures to -160°C requires significant time, delaying the return of supply to the market long after a crisis is resolved.

Terraform Industries CEO Casey Handmer challenges the notion that rebuilding critical infrastructure like fuel refineries must take years. He argues that by adopting a focused, high-urgency approach to permitting and construction—a "muscle the West has largely lost" since WWII—such projects could be completed in months, ensuring energy sovereignty.

Unlike restarting conventional oil production, restarting a liquefied natural gas (LNG) facility is a complex and risky process. The extreme temperature changes, from -260°F to ambient and back, cause metal components to expand and contract, which can lead to equipment failure. This makes the supply chain for LNG much more fragile and slow to recover from disruptions.