India’s LNG Imports Cross $23 Per MMBtu Amid Iran War Disruptions

Indian energy companies are paying some of their highest prices in years for liquefied natural gas (LNG) on the spot market as disruptions linked to the Iran war tighten global supplies. State-run GAIL India Ltd. recently paid more than $23 per million British thermal units (mmBtu) for an LNG cargo scheduled for delivery in September, according to people familiar with the transaction.

Gujarat State Petroleum Corp. also paid in the mid-$23-per-mmBtu range for a September cargo, the people said. The purchases are reportedly among the most expensive LNG cargoes imported by India since 2022. The transactions were not publicly disclosed, and the people familiar with them spoke on condition of anonymity.

Indian state-backed energy companies are increasingly turning to the spot market as supply disruptions put pressure on LNG availability and prices. The government is also seeking to ensure adequate gas supplies for fertiliser producers, which rely heavily on natural gas for manufacturing. The increased spot-market demand is adding to competition for available cargoes.

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India has traditionally relied significantly on long-term LNG supply agreements, including contracts with Qatar, one of the world's largest LNG exporters. However, disruptions to Qatar's export infrastructure and continued restrictions on shipping through the Strait of Hormuz have complicated supplies. The developments have forced buyers to seek alternative cargoes in an increasingly competitive market.

Indian companies are also competing with buyers in Europe, where natural gas prices have climbed sharply amid concerns over supply disruptions. Higher European demand can make LNG cargoes more expensive for Asian buyers as suppliers seek the most attractive markets. The resulting competition has added further pressure on India's spot procurement costs.

Bharat Petroleum Corp., another major Indian energy company, also agreed to purchase an LNG cargo from the spot market during the week, according to the people familiar with the matter. The price of that transaction could not be confirmed. The higher procurement costs could increase pressure on Indian gas buyers and industries that depend on LNG if supply disruptions and elevated global prices persist.

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