GAIL May Cut Gas Supply To Some Customers, LNG Imports Disrupted As West Asia Conflict Blocks Shipments Through Strait Of Hormuz

New Delhi: State-run GAIL (India) Ltd has warned that it may reduce natural gas supplies to some customers after a major disruption in liquefied natural gas (LNG) imports. Around 30 per cent of India’s imported LNG shipments have been blocked due to rising military tensions in West Asia.

The disruption follows joint US and Israeli strikes on Iranian government, military and nuclear facilities. In response, Iran’s Islamic Revolutionary Guard Corps warned ships against travelling through the Strait of Hormuz, a key sea route used for transporting oil and gas from Gulf countries to global markets.

Strait Of Hormuz Disruption Affects LNG Cargoes

The Strait of Hormuz is one of the world’s most important energy routes. Much of the LNG supplied to India from Qatar and the UAE passes through this narrow sea lane.

Due to security risks, many shipping companies and insurance providers have either suspended tanker movements or sharply increased war-risk insurance costs. This has disrupted the movement of LNG cargoes.

In a stock exchange filing, GAIL said that its LNG supplier had issued a force majeure notice due to navigation restrictions in the Strait of Hormuz while transporting gas between Qatar and India. Because of these restrictions, GAIL’s LNG allocation under the contract has been reduced to zero from March 4, 2026.

Possible Gas Cuts For Some Users

Following the disruption, GAIL said it is now reviewing the situation and assessing whether gas supply cuts may be needed for some customers.

According to a senior oil ministry official, around 60 million standard cubic metres per day (mmscmd) of gas supply has been halted due to the blockage of LNG shipments.

India currently consumes about 195 mmscmd of natural gas, which is used for electricity generation, fertiliser production, CNG for vehicles, cooking gas for households and as fuel for industries.

If the disruption continues, authorities may re-prioritise gas supplies and reduce allocations for some sectors.

Government To Prioritise Critical Sectors

The government is trying to arrange alternative LNG supplies to reduce the impact of the disruption. However, critical sectors will be given priority.

Officials said fertiliser plants will receive priority supply, especially as the upcoming sowing season approaches. Gas supply for cooking fuel and power generation may also be protected.

Higher Prices And Alternative Fuel Use Possible

Market experts say the disruption has already started tightening LNG supply in Asia and may push replacement cargo prices higher.

India imports a large share of its LNG through the Strait of Hormuz. Data shows more than half of the country’s LNG imports pass through the route, making it highly vulnerable to supply shocks.

If the disruption continues, Indian buyers may have to purchase higher-priced LNG from the spot market or look for cargoes from the United States, West Africa, Australia or Russia, although longer distances could increase shipping costs and delivery time.

Industries that are sensitive to rising gas prices may also switch to alternative fuels such as fuel oil, naphtha or petroleum coke to manage costs.