India’s natural gas demand has declined by 1.5 million tons so far this year as the Iran war choked LNG supplies from the Middle East, hiked spot prices, and destroyed some demand across South Asia, energy consultants Wood Mackenzie said in a report.
Before the war, WoodMac’s analysts had expected LNG demand across South Asia to rise by 7% this year compared to 2025, or by 2.7 million tons.
But after the war trapped most LNG supply from Qatar and the United Arab Emirates (UAE) in the Persian Gulf without any route to bypass the Strait of Hormuz, analysts at Wood Mackenzie now see demand crashing by about 6 million tons in South Asia.
The spike in LNG spot prices, due to the lack of the Middle East’s LNG supply, reduced gas demand in Bangladesh by 3 million tons, and by about 1.5 million tons in both India and Pakistan, according to WoodMac.
Pakistan and Bangladesh felt the LNG supply crisis more acutely than India, as they had not diversified their LNG procurement much.
Pakistan, for example, will have to pay in excess of $1 billion to secure LNG supply for the winter months, as spot prices soar amid massive disruptions to Qatari term supply.
The price tag will be fueled by the spot LNG prices in Asia surging to three-year highs and the plans of the Pakistani government to import 10 LNG cargoes from the spot market, at double the price at which LNG is being imported from Qatar, local daily Tribune reported on Tuesday.
India, for its part, has fared relatively better amid a more diversified supplier base including the United States, Nigeria, and Oman – apart from Qatar and the UAE.
India’s tender award prices jumped to $26.4 per million British thermal units (MMBtu) by September, up from $16.8–18.8/ MMBtu between March and June 2026, “yet tendering demand remained robust throughout,” WoodMac noted.
By Charles Kennedy for Oilprice.com
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