QatarEnergy’s 77 million tonne per annum (mtpa) export facility at Ras Laffan is among the world’s largest | Photo Credit: REUTERS/LIZ LEE

The decision to stop liquefied natural gas (LNG) production by QatarEnergy — which accounts for roughly one-fifth of global trade — could lead to a decline in demand for the commodity by price sensitive Indian buyers.

The world’s fourth-largest LNG importer bought 35.72 billion standard cubic meters (BSCM) of the super chilled commodity in FY25 for $14.9 billion, of which 40-42 per cent was from Qatar.

On Monday, QatarEnergy said, “Due to military attacks on QatarEnergy’s operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City in the State of Qatar, QatarEnergy has ceased production of LNG and associated products. QatarEnergy values its relationships with all of its stakeholders and will continue to communicate the latest available information.”

QatarEnergy’s 77 million tonne per annum (mtpa) export facility at Ras Laffan is among the world’s largest. The news has already rattled markets with European benchmark gas futures surging to multi-year highs.

Asia heavy

The development also assumes importance as the majority of QatarEnergy’s clients are Asian economies, including India. Global LNG supplies are already facing pressure due to closure of the Strait of Hormuz and the expected retaliation by Iran in response to the killing of its supreme leader Ayatollah Ali Khamenei in a joint US-Israel offensive on Saturday.

Sehul Bhatt, Director at Crisil Intelligence, said that developments in West Asia could increase pricing and procurement risks for crude oil and LNG, posing substantial challenges for India, which have more than 85 per cent and 50 per cent import dependency, respectively, in these items.

Sustained disruptions would keep crude prices elevated and tighten LNG availability underscoring the need for strategic planning to protect India’s energy security, he added.

Trade-off

India generally reduces its consumption of the super chilled commodity if the prices are on the higher side. A price range of $6-8 per million British thermal units (mBtu) is considered a safe bet.

As global LNG supply expands, India is already positioning itself as a benchmark-driven swing buyer — selectively accessing spot and short-term cargoes when international price markers align with domestic alternatives.

In January 2026, Kenneth Foo, Global Director for LNG price reporting at S&P Global Energy, said, “As global LNG supply growth accelerates, India is increasingly a benchmark-driven swing buyer, stepping into the spot or short-term markets during dislocations between (West India Marker) WIM vs Henry Hub vs Brent linked-pricing.”

India imported just under 26 mtpa of LNG in 2025. An additional 3.5–4 mtpa of long-term contracted volumes is set to start delivering from 2026. Higher term supply leaves limited scope for spot LNG in 2026, especially if prices remain uncompetitive versus propane, naphtha and fuel oil, he pointed out.

Published on March 2, 2026