Natural Gas Turns Volatile as U.S. LNG Export Disruptions Shake Global Markets

Natural gas in 2025 is no longer a quiet, weather driven commodity. A series of disruptions at the Freeport LNG export terminal in Texas has transformed it into one of the most infrastructure sensitive trades in the energy market.

Freeport LNG: the single point of failure

Freeport LNG, normally able to ship around 2 Bcf/d, has spent much of 2025 operating below expectations due to recurring outages:

• A major winter shutdown followed a power feed failure, with the terminal staying offline longer than initially projected.

• In late July, another power issue cut flows to half their normal level, pushing U.S. gas futures higher as traders repriced export demand.

• Across the year, lightning strikes, hurricanes, and grid problems repeatedly disrupted operations, reducing export volumes and amplifying price swings.

When a facility of this size goes down, the impact is immediate. Gas that would be exported stays in the U.S. system pressuring Henry Hub while overseas buyers lose access to flexible U.S. cargoes.

Why outages move the market so sharply

The U.S. is now the world’s top LNG exporter, meaning American outages instantly affect Europe and Asia. Reliability of Gulf Coast terminals has become as important as storage numbers or production trends.

At the same time:

• Henry Hub spot prices remain in the mid-$3 to ~$4 range, and 12-month futures around $4.18/MMBtu.

• The EIA expects U.S. prices to average roughly $4/MMBtu in 2026 as LNG exports tighten domestic balances.

• Analysts warn, however, that a wave of new global LNG supply in 2026 could pressure international spot prices.

Volatility spikes on both sides: outages push U.S. futures lower or higher depending on storage conditions, while strong export flows can drive rapid gains like the 6% jump when U.S. LNG feedgas rebounded after spring maintenance.

What this means for traders and risk managers

Infrastructure has become the key variable:

• Directional calls on natural gas now require a view on LNG terminal stability, not just weather or production.

• Volatility strategies options, spreads, event driven trades often outperform simple long or short exposure.

• Regulatory scrutiny of LNG facilities adds another layer of uncertainty, highlighted by reports of environmental violations at some terminals.

U.S. LNG has turned natural gas into a globalized commodity but also created new chokepoints. The market’s fate increasingly depends on whether Gulf Coast terminals can run smoothly. In 2025, that reliability has been anything but guaranteed.