Asian Buyers Face $7 Billion Spot LNG Bill Amid Strait of Hormuz Disruptions

Disruptions to LNG shipments through the Strait of Hormuz have caused costs for major Asian buyers, including India, to surge sharply. The crisis has exposed a structural weakness in the way developing economies plan their power systems and industrial energy supply.

India, Pakistan, Bangladesh, Thailand, and Vietnam combined spent $7.4 billion on spot LNG since the US-Iran war began, more than twice the approximately $3.1 billion paid for a comparable volume under long-term contracts during the same period last year, according to a Bloomberg News analysis of purchase tenders reported by Economic Times.

The immediate cause is a supply shock. LNG shipments through the Strait of Hormuz were disrupted after fighting began in late February, affecting contracted supplies from Qatar, which accounted for about a fifth of global LNG shipments before the conflict.

With those cargoes largely unavailable, buyers had to replace them through spot purchases, where prices respond quickly to scarcity, shipping disruption, and geopolitical risk. For India, the impact is not limited to the balance sheets of gas companies; natural gas is used for power generation and industrial activity, and higher procurement costs can affect the price and reliability of electricity supplied to factories, commercial establishments, and urban consumers.

The report described India as buying some of its most expensive LNG in years. It also noted that GAIL Gas has turned to blended pricing to keep industrial gas affordable amid rising LNG rates. The episode demonstrates the difference between having access to LNG infrastructure and having secure, affordable energy.