Cheniere Energy warned investors that shipping disruptions related to the Middle East conflict could further tighten global gas supplies and keep price swings elevated, a dynamic the U.S. liquefied natural gas producer said will continue to strain its earnings and cash flow after it posted a steep first-quarter loss.
The company recorded a net loss of $3.5 billion for the quarter, a reversal from a year-earlier profit of $353 million. Cheniere said the swing was driven in large part by a $4.8 billion unfavorable change in the value of derivative agreements that are linked to its long-term LNG contracts.
Derivatives serve as hedging instruments against energy price movements, but Cheniere noted that in periods of market turbulence these contracts can produce significant mark-to-market losses. The company identified widening spreads between global and U.S. natural gas benchmarks and heightened global gas price volatility as the primary forces behind the adverse derivative valuation.
Market volatility in global liquefied natural gas following the U.S.-Israeli war on Iran has affected energy companies broadly, Cheniere said, even as demand for U.S. LNG exports remains robust. In remarks earlier in March, Chief Executive Officer Jack Fusco had warned that shocks to the LNG market can damp demand growth because elevated prices can push some buyers out of the market, and he said the latest Middle East conflict reinforces the importance of diversified supply sources.
Despite the headline loss, Cheniere’s LNG revenue climbed nearly 8% to $5.72 billion for the quarter. The company pointed to stronger production forecasts and healthier market margins when announcing an upward revision to its 2026 adjusted core profit guidance. Cheniere now expects adjusted core profit in 2026 to fall between $7.25 billion and $7.75 billion, up from a previous range of $6.75 billion to $7.25 billion.
Operationally, Cheniere reported progress on its Corpus Christi expansion. The Stage 3 export project in Texas was 96.5% complete as of March 31, and first LNG from Train 6 was said to be expected imminently. Separately, Train 5, which is part of the seven-train development at the Corpus Christi LNG plant that is expected to add 10 million metric tons per year of export capacity, began operating at full capacity in late March.
Shares in Cheniere slumped 5.3% in premarket trading on the day management disclosed the quarterly results and the cautionary outlook regarding supply disruptions and market volatility. The company linked its substantial accounting loss to benchmark spreads and volatility in global gas markets rather than to a deterioration in underlying demand for U.S. LNG, which the company described as remaining strong.
Context and implications
Cheniere’s report highlights the dual pressures the firm is managing: near-term financial volatility driven by derivative revaluations and market spreads, and simultaneous operational growth from capacity additions. Management’s guidance lift for 2026 reflects expectations of higher production and improved market margins, even as the company warns about the potential for continued supply-side shocks tied to geopolitical shipping disruptions.