Over the past week, spot prices at the Waha gas trading hub in the Permian Basin fell as low as -$9.75 per million British thermal units, with expectations that it could hit -$10 when pipeline capacity tightens as operators perform seasonal maintenance later this year, traders told Bloomberg. 

That’s because drilling in the prolific Permian Basin yields both oil and natural gas. But while an extensive network of pipelines exists to bring crude to market, there’s less infrastructure to transport natural gas, creating bottlenecks and localized surpluses.

As a result, negative gas prices aren’t that unusual in West Texas, and have been that way more often than not so far this year. But last week saw the lowest weekly average Waha spot price on record.

Since negative prices mean producers have to pay to someone to take the supply off their hands, excess natural gas is often burned off, and so-called flaring events this season are at five-year highs.

Despite the upside-down price environment for West Texas drillers, they aren’t expected to pull back production because oil is lucrative enough to offset losses from gas.

And the recent spike in crude since the U.S.-Israel war on Iran started makes oil even more profitable. West Texas Intermediate has shot up 47% to nearly $100 a barrel in the last three weeks.

By contrast, other parts of the world have seen natural gas prices surge due to disruptions from the Iran war. Tehran has retaliated by largely closing off the Strait of Hormuz, through which 20% of the world’s oil and liquified natural gas flow.

Iran also attacked Qatar’s Ras Laffan Industrial City, damaging two LNG production trains that will impact about 17% of the country’s LNG exports—and repairs may take up to five years.

While most LNG from the Middle East goes to Asia, the supply shock will ripple through global markets as Asia and Europe compete for the remaining gas.

European benchmark gas futures jumped as much as 35% on Thursday to about 70 euros per megawatt hour, or more than $20 per million BTUs, double their prewar levels.

While that’s far short of the record 345 euros per megawatt hour seen in 2022 after Russia invaded Ukraine, the latest price spike comes at a sensitive time for Europe. After heating demand drew down gas inventories during winter, countries must now restock supplies this summer.

In Asia, the situation is so dire that countries have already started looking ways to ration energy, such as implementing four-day workweeks and working from home.

A prolonged closure of the Strait of Hormuz could send LNG spot prices in Asia above $30 per million BTUs in the summer from $26 this spring, analysts told Bloomberg. And if it remains shut in six months, the price could even top $40.

Some countries in Asia are even turning to coal to generate electricity, returning to their 2022 playbook. The Thai government, for example, has already ordered coal-fired power plants to operate at full capacity. Utilities in Bangladesh have also boosted their coal consumption.

South Korea and Taiwan, which produce much of the world’s semiconductors, have signaled they are preparing to rely more on coal.

“Asia is in full price competition, with any country that can switch from gas to coal doing so,” Henning Gloystein, a managing director for energy at Eurasia Group, told the New York Times.