LNG Demand Hit by US-Iran Conflict, Prices May Yet Rebound

The ongoing US-Iran conflict has led to a significant disruption in liquefied natural gas (LNG) supplies from Qatar and the UAE, causing prices to surge to nearly $30 per million British thermal units (MMBtu), up from a pre-war range of around $10 per MMBtu. This has had a major impact on demand in India, with GAIL Chairman Deepak Gupta stating that 'a lot of sectors... are price sensitive' and many industries switching to alternative fuels if gas is not viable.

GAIL and PetroChina have deployed their trading teams to source alternative cargoes to replace the missing Qatari and Emirati supplies. Consumers in India are seeking price stability, with affordability being a major challenge, according to Petronet LNG's CEO Akshay Kumar Singh.

While solar buildouts have helped Pakistan cope with power cuts in recent years, there is still gas demand from other sectors as well as households, according to Pakistan LNG's CEO Masood Nabi. Executives expect consumption to rebound once prices fall, with ExxonMobil being 'extremely bullish' on long-term LNG growth prospects.

Exxon expects substantial LNG demand growth in China over the long term, with extensive import infrastructure built along the country's east coast. The company remains confident in the diversification of its LNG portfolio and continues to look at new opportunities with a focus on cost of supply.