India is in no hurry to sign long-term LNG delivery deals as the country’s price-sensitive buyers stall talks and wait for the coming supply glut to pressure sellers into agreeing to lower prices.
Some LNG buyers in India, which is much more price-sensitive than China, have been stalling negotiations for over a year, sources with knowledge of the matter tell Bloomberg.
India has a goal to boost the share of natural gas in its energy mix to about 15% by 2030, which would be nearly double the current gas share in energy consumption. The goal was set years ago, but India hasn’t made meaningful progress toward it, also due to the high LNG prices in recent years that have discouraged both buying on the spot market and signing long-term deals.
But later this year, the LNG market is expected to tilt into oversupply and in a buyer’s market, in which India – and other price-sensitive buyers in Asia – could have the upper hand in negotiations with long-term LNG sellers.
New LNG export projects coming online and ramp-ups of recently commissioned facilities are expected to drive a 10% jump in global LNG supply this year, as the market shifts from tightness to abundance, analysts told Reuters last week.
The supply growth, mostly from the top two exporters, the United States and Qatar, is set to depress Asian spot LNG prices and Europe’s benchmark gas prices at the Dutch Title Transfer Facility (TTF).
While lower prices would weigh on the profit margins of the U.S. exporters, they would incentivize additional demand, especially in Asia, where buyers have become more price sensitive to LNG imports, according to the analysts.
Global supply growth is set to accelerate in 2026 to more than 7%, its fastest pace since 2019, the International Energy Agency (IEA) said in its Gas Market Report Q1 2026 on Friday.
“The unfolding LNG wave is set to have a central role in shaping global gas markets in the coming years, likely putting downward pressure on prices and improving liquidity as regional gas markets become increasingly interconnected,” said Keisuke Sadamori, IEA Director of Energy Markets and Security.
By Tsvetana Paraskova for Oilprice.com
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