GAIL (India) Ltd and Indian Oil Corporation have reduced natural gas supplies to industrial consumers after Qatar halted liquefied natural gas (LNG) production amid escalating conflict in West Asia, Financial Express reported, citing agency inputs.
India, the world’s fourth-largest LNG importer, depends heavily on the Middle East for its gas supplies. Petronet LNG, the country’s largest LNG importer, has informed GAIL and other buyers about reduced cargo availability, the report said.
Qatar suspended LNG production on Monday as Iran continued strikes across the Gulf region in response to Israeli and US military action. The escalation has also disrupted oil and gas shipments through the Strait of Hormuz, pushing up global energy prices, freight and insurance costs.
India is the largest LNG customer of Abu Dhabi National Oil Company and the second-largest buyer of Qatari LNG.
Supply reduction
According to the report, GAIL and Indian Oil informed customers late Monday about supply curbs ranging between 10 per cent and 30 per cent.
The reductions have been structured around minimum lifting quantities to shield suppliers from contractual penalties, the report stated.
To bridge the supply gap, companies including Indian Oil, GAIL and Petronet LNG are expected to float spot tenders. However, spot LNG prices, along with freight and insurance costs, have risen sharply.
Strait of Hormuz pressure
Iran has announced the closure of the Strait of Hormuz, adding to concerns over India’s energy security. The route is critical for India, with about 50 per cent of its crude oil imports and 85 per cent of its LPG supplies transiting through the narrow waterway.
“The Strait of Hormuz is closed. Our heroes in the Islamic Revolutionary Guard Corps Navy and the Army will set fire to any ships that wish to pass through this strait,” Iranian Brigadier General Ebrahim Jabari said on state television, according to the report.
The disruption has heightened risks for both oil and gas flows into India, raising concerns over supply security if tensions persist.
