Iran Strikes Qatar’s Ras Laffan LNG Hub, Tightening Supply And Raising Costs For India

Iran’s strikes on Qatar’s Ras Laffan have done more than just disrupt a key energy hub. They have exposed how quickly global supply shocks can travel.

Early estimates by QatarEnergy suggest the damage could take 3 to 5 years to fully repair, tightening gas markets at a time when demand remains strong. For India, that raises a bigger question: How does a disruption in Qatar begin to show up in India’s gas supply, fuel costs, and everyday consumption?

What Happened At Ras Laffan, And How Large Is The Disruption?

Ras Laffan sits at the centre of the global LNG trade, handling close to 20% of the worldwide supply. It processes output from Qatar’s North Field and feeds major Asian buyers, including India.

Following the strikes, QatarEnergy indicated that around 17% of its LNG capacity has been hit, accounting for nearly 12–13 million tonnes per annum.

Markets reacted quickly. Gas prices in Europe rose by about 35%, and Asian LNG buyers are expecting fewer cargoes to be available. Oil prices also moved up, with Brent briefly crossing $119 per barrel as concerns over supply from the region increased.

What complicates matters is concentration. A large share of Qatar’s LNG flows to Asia. When supply from a producer of this scale drops, buyers are forced to compete for limited cargoes.

How Exposed Is India To This Disruption?

India’s vulnerability comes from a mix of high import dependence and limited short-term alternatives.

The Supply Shock

India imports about 50% of its natural gas needs, and Qatar accounts for around 40% of those LNG imports. On the oil side, over 60% of crude imports come from the Middle East.

Even a partial disruption in Qatar can tighten the broader market.

In the short term, the pressure shows up more in prices and availability than outright shortages. If Qatar’s supply remains constrained, Indian buyers may have to rely more on short-term LNG purchases, where prices tend to spike when multiple countries are chasing limited supply.

That begins to affect multiple sectors such as city gas supply, including CNG for vehicles and piped gas for households, fertiliser units, gas-based power plants and others.

But the impact is not just industrial anymore. It has started becoming visible at the consumer level.

In parts of north India, LPG deliveries have been delayed, leading to supply gaps in some areas. In Gurgaon, traders said demand for alternatives picked up sharply, with over 4 lakh induction cooktops sold in about 10 days. Discounts have largely disappeared, and many retailers have shifted to advance bookings as supplies tighten.

Restaurants are seeing the impact more directly. Many say they are struggling to secure regular LPG cylinders, forcing them to cut hours or scale back menus. Some have also started trimming costs, including staff expenses, as margins come under pressure.

The Logistics Shock

A large part of India’s energy imports moves through the Strait of Hormuz. Roughly 40–50% of crude imports and most LPG shipments pass through this route. Even without a complete disruption, higher tensions can delay shipments, raise freight and insurance costs, and tighten the supply.

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The Way Forward

India’s response now is centred on reducing its reliance on the Middle East. The government has already stepped in to ease the pressure, increasing domestic LPG output by about 36% in a fortnight, though officials have still flagged the supply situation as worrisome.

LNG sourcing has gradually expanded to include the US and Australia, and crude imports have become more flexible in recent years. But replacing Qatar at scale is quite a challenge. Its LNG contracts are long-term and relatively cost-efficient, and alternatives often come at a premium in tight markets.

In the near term, India is likely to prioritise supplies for fertiliser units, power generation and households. That could leave less gas available for some other users if supply remains tight. At the same time, higher import costs could keep prices elevated.

Sources:

Times of India

Indian Express

Reuters

NDTV