Shares of the producer and exporter of liquefied natural gas (LNG) Global company (NYSE: VG) fell 16.6% in the week through Friday morning. The move comes as hot money has been flowing out of stocks following comments from the US administration suggesting a relatively quick resolution to the Gulf conflict.
The Strait of Hormuz, along the coast of Iran, remains closed to almost all commercial traffic in response to the attacks on Iran, and given that 20% of the world’s LNG flowed through the Strait before the war, investors are understandably interested in pricing a premium for US LNG producers. As Venture Global.
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FFor reference, the company operates two export facilities in Louisiana and plans to bring a third online in 2027. Additionally, the company plans to sign more LNG export deals and is seeking faster permits to add LNG production capacity, according to S&P Global Market Intelligence.
All of which he has done a stock to buy while the Strait remains closed. As such, if market sentiment shifts toward the view that a quick resolution to the conflict is likely, investors will begin selling the stock.
But feeling is one thing and reality is another. The conflict continues, the Strait remains almost completely closed, and it is far from clear what kind of infrastructural damage will be done to LNG assets in the region when, and if, the dust settles. In other words, the sale may prove premature, especially if energy prices remain high for longer, or even if there is a change in the perception of the risk of signing long-term LNG contracts in the Gulf instead of the US, which would favor Venture Global in the long term.
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