India Faces Higher LNG Prices as Global Disruption Looms

New Delhi: India's Liquefied Natural Gas (LNG) demand remains firm despite high spot prices, but rising gas costs may squeeze margins for downstream players. According to a report by Equirus, the country is likely to see higher LNG prices from September.

The report states that India's LNG imports accounted for 59% of total gas consumption in July 2026, the highest share since July 2021, when it stood at 65%. The share has also risen by 15 percentage points from 44% in April 2026. With domestic gas production remaining flat, 'India remains highly exposed to elevated spot LNG prices,' Equirus noted.

The report also highlights that globally, LNG exports outside the Middle East are expected to rise by around 40 million tonnes year-on-year in 2026. However, under Shell's early-third-quarter resolution scenario, a decline of around 45 million tonnes in Middle Eastern exports would more than offset this growth, resulting in a net contraction of about 5 million tonnes in global LNG exports.

The report predicts that a prolonged disruption in Middle Eastern flows could lead to a year-long disruption, overwhelming new LNG supply waves. As a result, Middle Eastern exports may decline by more than 65 million tonnes, compared with only around 40 million tonnes of incremental supply from the rest of the world.