Iran War Hits India’s Gas Supply As GAIL Reports LNG Cut From Qatar

GAIL (India) Ltd has reported that liquefied natural gas (LNG) supplies linked to its long-term contracts with Petronet LNG Ltd and QatarEnergy have dropped to zero. This follows after shocks that have been created by the current war in Iran.

According to the company’s exchange filing, Petronet LNG Ltd. invoked a force majeure on 3 March 2026 after LNG shipments faced restrictions in the Strait of Hormuz. This stalled the Qatar Ras Laffan liquefaction plant.

QatarEnergy, Petronet’s upstream supplier, also flagged a potential force majeure due to escalating hostilities in the region. As a result, LNG allocation to GAIL under the contract has been reduced to zero starting 4 March 2026.

Could This Affect Gas Supply In India?

GAIL said it is assessing the potential need to curtail supplies to downstream customers depending on how the situation evolves. However, LNG shipments from other suppliers remain unaffected for now.

The firm is a very important participant in the Indian gas network. It operates around 11,400 km of natural gas pipelines. It also controls nearly 75% of the country’s natural gas transmission market, linking supply sources with industrial consumers and other end users.

Why Are LNG Prices Rising?

The disruption has also pushed global gas markets higher. Asian spot LNG prices recently eased slightly to around $23.80 per million British thermal units. But they remain more than double compared with levels seen just a week earlier.

Energy markets have been on edge since the escalation of hostilities in the Middle East. Iran has targeted infrastructure in the region. It has also warned of potential shipping disruptions through the Strait of Hormuz, a vital corridor for global energy trade.

The shutdown of Qatar’s Ras Laffan facility, which is the world’s largest LNG export plant, has further tightened supply expectations.

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What Does This Mean For Investors?

For markets, the development underscores how quickly geopolitical tensions can disrupt energy supply chains. In the event of continued LNG disruptions, sectors that rely on gas, such as fertilisers, city gas distribution and power generation, may experience cost pressure.

At the same time, elevated global gas prices may support upstream energy producers and LNG trading margins. For investors, the key monitorables will be the duration of supply disruptions and whether alternative sources can stabilise domestic gas availability.

Sources:

NDTV Profit

Economic Times