Escalating conflict in the Middle East has choked LNG supplies to India, forcing a 1.5 million ton decline in demand as spot prices surge and bypass routes remain unavailable.
Natural gas prices are experiencing significant volatility due to the Iran war, which has effectively trapped LNG supplies from key producers like Qatar and the UAE within the Persian Gulf. This supply disruption has led to a spike in spot prices, resulting in a 1.5 million ton decline in demand across South Asia and forcing a downward revision of previous growth expectations.
Demand has declined by 1.5 million tons so far this year, reversing previous expectations of a 7% growth rate.
The conflict has trapped supply from Qatar and the UAE in the Persian Gulf, preventing shipments from bypassing the Strait.
India's natural gas demand has contracted by 1.5 million tons this year as regional conflict disrupts critical supply routes from the Middle East. Wood Mackenzie reports that soaring spot prices have effectively destroyed demand, reversing previous growth projections for the South Asian market.
The decline is driven by supply disruptions from Qatar and the UAE caused by the Iran war, which has restricted LNG shipments and triggered a sharp rise in spot prices.