There is a place in the United States where gas prices are steady and trending downward: Erath, Louisiana.
But what’s cheap isn’t gasoline — it’s natural gas. Erath is home to about 2,000 people and the Henry Hub pipeline, where the U.S. market price of natural gas is set.
And U.S. natural gas has reacted very differently than oil to disruptions caused by the Iran war, holding steady around $3 per million British thermal units because of the country’s vast supply.
In other regions of the world, natural gas prices have skyrocketed as Iran retaliates by bottling up energy supplies in the Persian Gulf and attacking production sites. Liquefied natural gas prices in Asia have risen more than 90 percent since the bombing started.
When Iran bombed the Ras Laffan gas plant in Qatar earlier this month, a European benchmark price for LNG surged 13 percent. In the United States, the price at Henry Hub dropped 2 cents.
“So, we’re on an energy island here in the U.S.,” said Karen Harbert, CEO of the American Gas Association, “and that’s good for the economy and good for customers.”
That isolation has kept natural gas prices from joining gasoline as a headache for President Donald Trump and congressional Republicans in their effort to maintain control of Congress in November’s midterm elections. It’s also kept electricity prices — which have climbed in recent years — from becoming more of an issue.
The White House did not immediately respond to a request for comment.
Natural gas is piped directly into homes to heat air and water, showing up directly in customer bills. It is also the primary engine of U.S. electricity generation, accounting for 40 percent of total generation in 2025.
While U.S. customers are shielded, the gyrations in the price and supply are likely to have knock-on effects that fundamentally change markets for domestic gas companies.
But it’s not clear how. The rippling price shocks could open up new markets for the export of liquefied natural gas, boosting prospects for new projects on the U.S. Gulf Coast and the Pacific Coast of North America. But the steep increase in price and volatility could also drive countries away from imported natural and toward coal or renewables.
The reason the price is so low and stable in the United States is fracking — specifically, the combination of hydraulic fracturing and directional drilling that revived domestic oil and gas production after nearly 40 years of decline. The shale drilling boom it created opened up vast oil and gas reserves and turned the United States into the world’s largest producer of oil and gas.
“The robust natural gas resources in the United States have helped insulate the US from tensions in the Gulf as evidenced by sub $3 Henry Hub prices,” Dena Wiggins, CEO of the Natural Gas Supply Association, said in an emailed statement.
Oil and gas are inextricably mixed in many ways. They are often produced together. And about 20 percent of the world’s supply of both oil and LNG is loaded for export behind the Strait of Hormuz, which Iran has effectively closed.
But oil is sold on a global market. Prices rise and fall globally. Gas markets are local, and a country’s natural gas price depends heavily on whether it has domestic supplies or must import gas.
Europe and Asia import their gas, much of it from Qatar and the Middle East region. The U.S. produces far more gas than it needs, and it exports billions of cubic feet every day across the globe.
The domestic price of natural gas in the United States is affected more by local weather than by international events. In late January a winter storm and record low temperatures sent the Henry Hub price set in Erath soaring.
On Jan. 23, it topped $30 per MMBtu, according to federal data. But that was followed by milder weather in February.
The export facilities, where gas is shrunk 600-fold for transport by supercooling it to minus 260 degrees Fahrenheit, were running at or near top capacity before the United States and Israel launched their attacks on Iran. So the amount of supply available for domestic use has essentially stayed the same, said Kenneth Medlock, an energy economist at Rice University’s Baker Institute for Public Policy.
“The gas price domestically is largely shielded from what’s happening,” Medlock said. “So what you’re seeing happen in Asia and in Europe is not going to happen here.”
That’s a contrast with oil and refined fuels such as gasoline and jet fuel, said Tyson Slocum, director of Public Citizen’s energy program. Export volumes of those products can vary based on market conditions and other factors.
“We haven’t seen natural gas prices rise because LNG exports can’t rise,” Slocum said in an interview.
‘Partly luck’
The country is exporting 3 billion cubic feet a day more than last year on a year-over-year basis, said Ira Joseph, an analyst who tracks gas and power markets at Columbia University’s Center on Global Energy Policy.
But residential and commercial demand has gone down by a similar amount, Joseph said in an interview.
Counterintuitively, Medlock said, the price shocks driving up the price of crude oil could make U.S. natural gas even cheaper by increasing supply.
If companies in West Texas start producing more oil, it will bring up even more “associated gas.” There’s already so much that gas in that region trades below zero, meaning producers have to pay to get rid of it.
“There’s all these interesting dynamics that play out. You know, in the upstream space, in the U.S.,” Medlock said.
The Trump administration has been urging oil companies to drill more and produce more. But oil executives have been reluctant to spend money to mobilize rigs, fearful that oil and gasoline prices could swiftly drop to prewar levels if hostilities quickly cease. As of Sunday, AAA said the average U.S. price for a gallon of regular gasoline hovered just below $4, a rise of nearly $1 in a month.
And the low price of gas has meant the price shocks rippling out from the Middle East haven’t affected U.S. electricity prices, said Severin Borenstein, director of the Energy Institute at the University of California, Berkeley.
That’s “partly luck,” Borenstein said in an email exchange, because relatively mild temperatures in the Northeast have meant that utilities there have not had to turn to peak generation, which often runs on diesel because of natural gas supply constraints.
Before the bombs started falling, there had been concerns that the natural gas export industry was heading for a glut. But that concern has disappeared.
“There’s clearly a deficit, obviously, right now,” said Columbia’s Joseph.
Instead, some analysts see a greater global demand for U.S. LNG, giving investors confidence to put money in new export terminals along the Gulf Coast and perhaps the West Coast.
The Trump administration has been pitching the United States as a more reliable supplier for Europe and Asia for both oil and gas.
“You’ve got a straight shot from Alaska over to Asia,” Jarrod Agen, executive director of the White House’s National Energy Dominance Council, said last week at the POLITICO Pub at CERAWeek by S&P Global. “You’ve got oil and gas production out of the Gulf of America. You’ve got Venezuela that can also ramp up production.”
That could be a boost for proposed projects along the Gulf of Mexico and even the long-dreamed-of Alaska LNG project, which is supported by the Trump administration. Charlie Riedl, executive director of the Center for LNG, said the industry is already seeing increased interest in U.S. exports.
“Events in the Gulf have highlighted the importance of long-term contracts for both buyers and sellers,” Riedl said in an emailed statement. “There is continued interest in long-term contracts for US gas which can provide stability.”
But the supply shock from the war could hinder efforts to ramp up exports by snarling construction of new projects, Reuters quoted Freeport LNG CEO Michael Smith as saying last week at the CERAWeek energy conference.
And there are longer-term concerns on top of supply chain glitches. While the war could push countries into the arms of the U.S. LNG industry, it could also make them wary of importing energy altogether. Looking at the surge in the price of natural gas, some countries might turn hard away from gas toward coal and renewables.
“Burning gas in the power sector, unless you’re in the U.S. or in a country with domestic gas resources, is a very expensive proposition,” Joseph said. “Longer term, for LNG demand around the world, this is not a good story.”
