West Asia Conflict Triggers LNG Price Surge, Demand Plunge
A conflict in West Asia has led to a significant supply crunch for liquefied natural gas (LNG), causing prices to surge and demand to plummet in India and China.
According to Shell, the world's largest LNG trader, about 36 million tons of LNG have been lost from the region so far this year due to the conflict. This has driven up Asia's spot prices to nearly $30 per million British thermal units (MMBtu), compared to a pre-war range of around $10 per MMBtu.
GAIL Chairman Deepak Gupta said that the high prices are impacting demand in India, as many industries are price-sensitive and have switched to alternative fuels. However, he also noted that India's gas consumption has rebounded to almost 90-95% with increased trading capabilities.
PetroChina International (PCI) CEO Luo Yizhou expressed similar sentiments, stating that the company is working to secure supply and expecting demand from gas-fired power plants to rebound once LNG prices return to a 'normal' range of $7-9 per MMBtu. He also mentioned strong growth in electricity consumption despite falling LNG imports.