India Pays Record Prices for LNG Amid Ongoing Iran War Disruptions
India's energy sector is facing a crisis as state-backed companies are buying liquefied natural gas (LNG) at record prices due to supply disruptions caused by the ongoing Iran war. The government has been pushing to support fertilizer producers, which use natural gas, and as a result, energy companies in India have turned to the LNG spot market.
According to people familiar with the matter, Gail India Ltd., a state-run gas company, recently paid more than $23 per million British thermal units (mmbtu) for a cargo to be delivered in September. This is the highest price paid by an Indian energy company for LNG since 2022.
India typically buys LNG through long-term contracts from Qatar, but the country's massive export terminal was damaged in March, and ships are still blocked from passing through the Strait of Hormuz. As a result, India is having to compete with LNG buyers in Europe, where gas prices have soared to a five-month high.