India’s GAIL LNG supply cut may affect industrial gas consumers after Petronet LNG Limited declared force majeure due to tanker constraints linked to rising tensions in the Middle East.
State-run GAIL (India) Limited said LNG allocation from Petronet has been reduced to zero starting March 4. The company is now reviewing possible supply reductions to customers.
Why the GAIL LNG Supply Cut Happened
The GAIL LNG supply cut followed a force majeure notice issued by Petronet LNG to its supplier QatarEnergy.
Petronet said LNG vessels could not reach the loading terminal at Ras Laffan Industrial City. Shipping disruptions occurred due to escalating conflict in the Middle East.
Petronet also notified Indian buyers, including Indian Oil Corporation, about the supply disruption.
Middle East Conflict Disrupts LNG Shipments
The conflict involving the United States, Israel, and Iran has disrupted energy shipments across the Gulf region.
Shipping through the Strait of Hormuz has slowed sharply. Some vessels in the area were reportedly attacked, forcing operators to suspend transit.
The Strait of Hormuz is one of the world’s most important routes for oil and LNG shipments.
Impact of the GAIL LNG Supply Cut on India
The GAIL LNG supply cut has already started affecting industrial customers. GAIL and Indian Oil have reduced gas supply to some industrial users.
However, GAIL said LNG supplies from other suppliers remain unaffected for now.
This may help the company maintain partial gas supply to domestic consumers.
India’s Dependence on LNG Imports
India relies heavily on LNG imports to meet its gas demand.
According to government data, the country imported 27 million metric tons of LNG in FY2024-25. Imported LNG accounts for nearly half of India’s natural gas consumption.
Most of these supplies come from Qatar under long-term contracts.
Outlook for India’s Gas Supply
The duration of the LNG supply cut will depend on how quickly shipping routes reopen.
If disruptions continue, India may need to increase spot LNG purchases. This could raise gas prices for industrial consumers.
Energy companies and traders are closely monitoring developments in the Gulf region.
