The ongoing conflict in West Asia has significantly disrupted the liquefied natural gas (LNG) market across Asia, creating supply challenges for several South Asian countries. As a result, India is facing an estimated LNG shortfall of nearly 1.5 million tons (mt) per month, raising concerns about energy availability and industrial fuel supplies.
India Faces Major LNG Supply Gap
According to industry estimates, the disruption in regional LNG trade could reduce supplies to India by around 1.5 mt every month. Such a shortfall may affect sectors that depend heavily on natural gas, including power generation, fertilisers, petrochemicals and industrial manufacturing. Consequently, energy companies may need to seek alternative LNG sources or increase spot market purchases to meet domestic demand.
Asia Relies Heavily on Gulf LNG Shipments
In its latest market commentary, Wood Mackenzie highlighted the strategic importance of LNG shipments moving through the Strait of Hormuz. The report noted that Asia received nearly 90% of LNG cargoes exported from Qatar and the United Arab Emirates through the Strait of Hormuz in 2025, the route remains one of the world’s most critical energy corridors and any disruption to shipping activity can immediately affect LNG availability across Asian markets.
South Asia Among the Hardest-Hit Regions
Within Asia, South Asian countries are experiencing some of the most severe impacts. Nations that rely heavily on imported LNG face heightened risks from delayed cargoes, higher freight costs and increased competition for alternative supplies. Moreover, tighter LNG availability could push regional buyers toward the spot market, potentially driving up procurement costs.
Why the Strait of Hormuz Matters
The Strait of Hormuz serves as a vital gateway for energy exports from Gulf producers. A substantial portion of global LNG trade passes through this narrow shipping corridor before reaching Asian consumers. Therefore, geopolitical tensions in the region can quickly influence LNG prices, shipping schedules, supply security and industrial fuel availability.
Outlook for India’s Energy Market
India’s growing dependence on imported LNG makes the country particularly sensitive to disruptions in Gulf supply routes. If the current geopolitical tensions continue, importers may face higher costs and tighter supply conditions over the coming months. As reported by thehindubusinessline.com, at the same time, policymakers and energy companies are likely to focus on diversifying LNG sourcing, strengthening storage infrastructure and securing long-term supply agreements to reduce exposure to regional disruptions.
