Qatar Disruptions Send LNG Prices Soaring, India Faces Higher Costs

India is likely to face higher liquefied natural gas (LNG) costs this winter due to Qatar supply disruptions and increased competition for alternative cargoes with Europe, according to Jera Co. chairman and global CEO Yukio Kani.

The Strait of Hormuz has seen a surge in LNG flows from Qatar and the UAE since September, but shipments remain 80% below February levels, highlighting the extent of the disruption. Qatar has extended force majeure on LNG shipments to long-term customers in Asia until November and to Europe until December.

This development is concerning for India, which relies heavily on imported LNG for sectors such as fertilizers, city gas, industry, and power generation. A sustained reduction in Middle Eastern supplies could push buyers towards more expensive spot cargoes.

LNG spot prices have already doubled compared to last year's levels, with Jera Co.'s Yukio Kani warning that market participants are worried about this coming winter. The pressure on Indian importers is likely to intensify as Europe prepares for a potentially challenging heating season and may draw LNG away from Asia or drive up prices.

With Qatar LNG supplies constrained, the US and other exporters will become increasingly important to global buyers, but replacing Middle Eastern cargoes is not straightforward due to shipping availability, voyage distances, and competition between buyers.