Qatar Gas Collapse Wipes Out $24 Billion in Sales as India Pays Premium Price

The global gas market has seen a significant price divergence, with Asian buyers paying nearly three times more than American buyers for the same fuel. The 72-point gap between prices in Asia and the US is largely due to supply disruptions caused by the Iran war, which has led to a collapse in Qatar's gas exports.

Qatar supplied over 40% of India's LNG imports before the war, but its exports have since plummeted by 96%. The country has lost $24 billion in gas sales and is expected to see its economy shrink by 8.6% this year, according to the IMF. India, which relies heavily on imported LNG, has had to find alternative suppliers to make up for Qatar's reduced output.

Analysts point out that gas infrastructure is not as fungible as oil tankers, making it difficult to reroute supplies in times of crisis. As a result, the global gas market is segmented into three regionally isolated pricing zones: North America, Europe, and Asia. India has been forced to pay the premium price for its imported LNG due to its reliance on Qatar's supplies.

Petronet, India's largest LNG importer, has managed to secure alternative suppliers, including Oman, Nigeria, and Congo, but the cost of importing gas from these countries has not fallen as sharply as expected. The company still holds a contract for 7.5 million tonnes of Qatari LNG per year, which it is likely to continue paying at a premium price.