Indian energy companies pay highest LNG spot prices in years as Iran war disrupts supplies
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Indian energy companies are paying some of their highest prices in years for liquefied natural gas on the spot market as the Iran war disrupts global supplies.
Gail India Ltd., the state-run gas company, recently paid more than $23 per million British thermal units (mmbtu) for a cargo scheduled for delivery in September, according to people familiar with the deal.
Gujarat State Petroleum Corp. also paid in the mid-$23 range for a September cargo.
The prices are among the most expensive LNG cargoes imported into India since 2022, the people said.
Indian state-backed energy companies are increasingly turning to the spot market as the government seeks to support fertiliser producers, which rely heavily on natural gas.
India has traditionally sourced much of its LNG through long-term contracts with Qatar, the world’s second-largest LNG supplier. However, Qatar’s major export terminal was damaged by Iranian attacks in March, while shipping through the Strait of Hormuz remains heavily disrupted.
Indian buyers are also competing with European LNG purchasers as gas prices in Europe have climbed to a five-month high.
Bharat Petroleum Corp. has also agreed to purchase an LNG cargo from the spot market this week, according to people familiar with the matter. The price of that cargo could not be confirmed.
The higher spot prices add to pressure on Indian energy companies as they seek to secure supplies amid disruptions to one of the world’s key routes for energy shipments.