The attacks on energy vessels in the Strait of Hormuz, including a Qatar-owned liquefied natural gas tanker, have renewed concerns over the security of the strategic waterway as shipping activity had begun to recover following a ceasefire, RBC Capital Markets strategists said in a note Thursday.
RBC analysts said since the start of the ceasefire on April 8, 27 LNG tankers have exited the Persian Gulf while 31 have entered.
Though transit volumes remain below pre-conflict levels, the analysts said the resumption of flows had provided some confidence that shipping activity was gradually normalizing after the signing of a memorandum of understanding.
However, the latest military strikes have disrupted that optimism, raising concerns that renewed hostilities could again threaten LNG exports from the Gulf region.
RBC said Qatar has paused efforts to ramp up LNG production after the threat level in the region was elevated to "severe".
The LNG cargo stored on the damaged vessel remains intact, but the incident highlights the vulnerability of the region's energy infrastructure and shipping routes.
Most LNG tankers that exited the Gulf during the short recovery period were heading towards Asia, meaning any renewed disruption to Gulf exports could have an outsized impact on Asian LNG markets.
"Despite nearly all exiting LNG tankers during this brief window being headed to Asia, an outsized upward pressure on Asian prices could persist should Strait risk rise and production in the Gulf remain offline," RBC analysts said.
The analysts said they have remained cautious about optimism over the MoU, and the cycle of violence that has reemerged supports that caution.
Meanwhile, extreme heat across the US pushed electricity demand to near-record levels in early July, forcing grid operators to rely on demand response measures and a growing renewable energy fleet to maintain reliability.
The New York Independent System Operator and PJM Interconnection issued energy watch alerts as temperatures surged.
PJM received emergency authorization from the US Department of Energy to direct data centers to switch to backup generation if needed, although the measure was ultimately not activated.
Power grid operator, instead, relied on demand-response programmes, compensating large industrial consumers to reduce electricity usage during peak periods.
RBC said peak demand reached 162 gigawatts at around 6 p.m. on July 2, marking the second-highest level ever recorded by PJM.
The bank said that renewable energy provided additional support during the heatwave. Between June 26 and July 7, wind and solar generation produced about 7 terawatt-hours more electricity compared with the same period a year earlier.