The Trump administration has dismantled a regulation limiting greenhouse gas emissions from U.S. power plants, marking another step to promote the nation’s fossil fuel industry. However, ongoing conflict in the Middle East has raised challenges for the administration’s broader “energy dominance” agenda, particularly regarding liquefied natural gas (LNG) exports.
After resuming the presidency last year, Donald Trump swiftly reversed a pause on new LNG export terminal approvals imposed by his predecessor, Joe Biden. This move aimed to accelerate the growth of U.S. LNG sales internationally. Yet, the recent war involving Iran has disrupted global gas markets, complicating long-term growth prospects for U.S. LNG exporters.
The conflict, which intensified in February, led to blockages in the Strait of Hormuz—a crucial maritime route for LNG shipments from Qatar. Qatar previously accounted for around 20% of global LNG supplies; its reduced exports triggered a supply shortage and resulted in price spikes. The benchmark Japan-Korea Marker price for LNG, which began the year under $10 per million British thermal units (MMBtu), surged to above $25 per MMBtu in recent weeks. This price escalation has delivered a short-term windfall for U.S. LNG exporters, who boosted shipments to nearly full capacity. According to the U.S. Energy Information Administration, approved terminal expansions from before Biden’s pause contributed to a 23% rise in U.S. LNG exports in the first half of the year.
Despite these gains, the steep price increases have prompted some key developing markets in Asia—central to anticipated long-term LNG demand—to reduce their use of gas-fired power. In India, gas-fired electricity generation declined by 25% in the second quarter. Countries including India and Vietnam have temporarily increased coal-fired generation, the most carbon-intensive fossil fuel, while accelerating policies promoting renewable energy sources.
Thailand recently unveiled an initiative to install 5 gigawatts of rooftop solar capacity across one million households, aiming to lessen the country's dependence on gas power. Analysts note that government energy strategy documents now suggest a diminished long-term role for gas-fired electricity. In Vietnam, Vingroup canceled a $6.8 billion gas-fired power plant project, opting instead for solar and wind developments supported by battery storage. This trend is facilitated by sharply declining costs for large-scale battery technology, which provide grid flexibility traditionally seen as a key advantage of gas plants.
Pakistan is also expanding its renewable capacity plans, with power minister Awais Leghari setting a target of 90% clean energy generation by 2035 and highlighting battery storage as crucial in reducing dependence on imported gas.
Within the United States, renewable energy sources dominate new power generation capacity. However, the rise in data center construction, driven by increasing artificial intelligence workloads, has sparked demand for on-site gas power plants, as developers seek to avoid prolonged grid connection delays. This domestic demand surge has contributed to manufacturing bottlenecks and rising prices for gas turbines, further complicating international sales prospects.
These supply chain constraints partly influenced Southeast Asian countries’ strategic reconsiderations of gas power investments, according to Christopher Doleman, Asia gas specialist at the Institute for Energy Economics and Financial Analysis.
Despite these regional shifts, the International Gas Union forecasts that global gas demand will rebound after a projected decline this year, with president Andrea Stegher affirming gas’s enduring role in meeting rising energy needs.
Still, voices in developing Asian economies express increasing skepticism about natural gas’s long-term viability. Following Thailand’s recent solar initiative, energy minister Akanat Promphan underscored the importance of the energy transition to reduce vulnerability to geopolitical disruptions. “Otherwise we’ll be subjected to what’s happening in the Middle East forever,” he said, reflecting broader concerns about reliance on fossil fuels amid ongoing regional instability.