India's LNG Demand Resilient Despite High Prices, Margin Pressure Looms

India's liquefied natural gas (LNG) demand has remained resilient despite high spot prices, but rising gas costs could squeeze margins for downstream players. According to a report by Equirus, 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.

The country may see higher LNG prices from September, Equirus noted. With domestic gas production remaining flat, India remains highly exposed to elevated spot LNG prices. Globally, the LNG exports outside the Middle East were expected to rise by around 40 million tonnes year-on-year in 2026, driven by new and ramping-up projects, particularly in the US.

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. However, Middle Eastern flows are yet to normalise, which has further shifted the outlook towards a year-long disruption.