Key facts
- India's natural gas demand has declined by 1.5 million tons this year.
- The Iran war has choked LNG supplies from the Middle East and hiked spot prices.
- South Asian LNG demand is now projected to fall by about 6 million tons.
- Bangladesh's demand dropped by 3 million tons.
- Pakistan's demand also fell by 1.5 million tons.
- India's LNG tender award prices rose to $26.4/MMBtu by September.
India's natural gas demand has decreased by 1.5 million tons this year, a consequence of the conflict in the Middle East that has disrupted LNG supplies and driven up spot prices, according to energy consultants Wood Mackenzie. Analysts had initially projected a 7% increase in South Asian LNG demand for the year, but now anticipate a significant drop of approximately 6 million tons. The war has trapped crucial LNG shipments from Qatar and the United Arab Emirates in the Persian Gulf, preventing them from bypassing the Strait of Hormuz. This supply crunch has led to a surge in LNG spot prices, impacting demand across the region. Bangladesh has seen its gas demand fall by 3 million tons, while Pakistan and India have each experienced a reduction of about 1.5 million tons. Pakistan and Bangladesh have been more severely affected due to less diversified LNG procurement strategies. Pakistan, in particular, faces a winter LNG import bill exceeding $1 billion, with spot market prices soaring and the government planning to purchase 10 cargoes at double the price of its Qatari term supply, according to local media. India has navigated the crisis more effectively due to a broader supplier base, including the United States, Nigeria, and Oman, in addition to Qatar and the UAE. Despite a rise in India's LNG tender award prices to $26.4 per million British thermal units (MMBtu) by September, up from $16.8–18.8/MMBtu between March and June 2026, demand for these tenders remained robust, Wood Mackenzie noted.