Natural gas companies in India have reduced supply to industries as energy shipments are anticipated to fall after Qatar halted production at its key facilities following drone attacks from Iran.
According to a report by Reuters, Petronet LNG Ltd has informed GAIL (India), the top gas marketing company, and other firms about lower supplies.
GAIL and Indian Oil Corporation informed customers about the gas supply cut late on Monday, the Reuters report said, citing sources. Supplies have been slashed by 10–30 percent, the report added.
The cuts have been set at minimum lifting quantities to shield suppliers from penalties under contractual terms.
Petronet is India’s largest natural gas importer, with Qatar as its top supplier. For Qatar, India is the second-largest buyer of its LNG.
IOC, GAIL and Petronet are planning to issue spot tenders to make up for the LNG shortfall, even as spot prices, freight and insurance costs have surged.
Crude and natural gas prices continued to rise on Tuesday, although the spike in crude was relatively moderate compared to the previous day. The situation may worsen as the US-Israel-Iran war shows no signs of de-escalation.
Brent crude rose 2.61 percent as of noon IST, with the April contract trading close to $80 per barrel. WTI crude was up 2.26 percent at $72.84 per barrel.
The increase was modest compared to the nearly 10 percent jump during Monday’s trade.
Natural gas prices also climbed 2.47 percent on Tuesday, building on a 3.5 percent rise in the previous session. Prices have increased more than 7 percent over the past five days, crossing $3 per MMBtu.
The shutdown of Qatar’s LNG facility is significant as it could remove nearly 20 percent of the world’s LNG export capacity from the market.
According to a report by Oilprice.com, more than 80 percent of Qatar’s natural gas output is shipped to Asian countries, including China, Japan, India and South Korea. Europe also remains a major buyer under long-term contracts.
