For Mexico, the impact of the conflict in the Middle East regarding natural gas will not come through supply channels—which are structurally anchored to the United States—but rather through the pressure of a potential rise in the price of the fuel that powers more than half of our national electricity generation.
Data indicates that between 54% and 70% of the country’s electricity generation depends on this energy source. It is the cornerstone of the energy mix and, at the same time, its main vulnerability.
The conflict has put pressure on prices, which could directly impact the Mexican market. According to PETROIntelligence, Europe has seen a 107% increase in the price of gas at the Dutch Title Transfer Facility (TTF) since late February, while Asia faces a 68.5% increase.
In contrast, North America shows a more moderate rise, of around 9.5% on the Henry Hub index. However, this apparent stability is deceptive, as it reflects the United States’ production strength but also forecasts growing pressure from liquefied natural gas exports.
“The greatest danger lies not in a price hike, but in sustained high levels with episodes of recurring volatility,” says Alejandro Montufar, director of PETROIntelligence.
Mexico imports nearly 70% of the gas it consumes, with flows exceeding 6.6 billion cubic feet per day from the United States. Added to this is a structural weakness, where storage capacity barely covers 2.5 days of consumption. In this context, any disruption—whether due to weather, infrastructure, or international arbitration—quickly translates into pressure on the power system. In this regard, PETROIntelligence estimates that the price for the United States could rise to between $4 and $5 per MMBtu if external demand intensifies. Beyond the cost per unit, volatility stands out as the main threat. As Montufar points out, the market “is entering a phase where it loses operational flexibility,” which complicates strategic planning in the sector. This leads to recurring price hikes that complicate cost planning, particularly in energy-intensive sectors such as electricity generation.
Oscar Ocampo, an energy specialist at IMCO, links the issue to energy security. He warns that the long-term closure of the Strait of Hormuz and attacks on strategic infrastructure underline the importance of having resilient supply chains.
Julio Castillo Ybarra, director of LNG Mexico, highlights that there is aggressive competition for the molecule (gas) supplies, especially given rising costs in Asia, where prices for Japan have doubled.
“This could translate into higher gas costs for Mexico, given that U.S. terminals will seek to sell to the highest bidder despite having commitments with the Federal Electricity Commission (CFE), so the increase may be the expected outcome,” he says.
This leads to higher costs for combined-cycle power plants, which produce more than 61% of the electricity consumed in Mexico, he warns.
End of the conflict?
Regarding the future of the armed conflict, Julio Castillo mentions that there are two possible scenarios, outlined by Anne-Sophie Corbeau, an expert at the Center for Global Energy Policy (CGEP): End of the conflict in April: An agreement would be reached between the U.S. administration and Iran, and the stranded shipments would be sent to their destinations. Qatar and the United Arab Emirates would repair their damaged facilities within at least five years. In this scenario, the growth in LNG supply in 2026 would be limited.
Delayed ceasefire: A ceasefire would be reached in the fall of 2026, due to the intervention of other countries or the fall of the regime, allowing LNG plants to resume operations.
From Julio Castillo’s perspective, these scenarios involve a high degree of uncertainty regarding a return to previous LNG supply levels.
