India has reduced natural gas supplies to several industries after Qatar stopped its liquefied natural gas production, according to industry sources, reported Reuters. The move comes as companies prepare for tighter supplies from the Middle East amid rising tensions in the region.
The supply cuts were communicated late on Monday, as concerns grew over disruptions to oil and gas shipments through the Strait of Hormuz.
Qatar on Monday as Iran continued strikes in the Gulf in response to Israeli and US attacks. The situation has disrupted energy shipments and pushed up global fuel prices and shipping costs.
India, the world’s fourth-largest LNG buyer, depends heavily on imports from the Middle East. Any disruption in that region directly affects domestic supply.
According to sources, Petronet LNG Ltd informed GAIL (India), the country’s leading gas marketing company, along with other firms, about lower supplies.
GAIL and Indian Oil Corp later notified their customers about the reduction in gas allocation. The supply cuts are said to range between 10-30%. The reductions have been fixed at minimum lifting quantities. This is meant to protect suppliers from facing penalties under existing contracts.
To manage the shortfall, companies including IOC, GAIL and Petronet LNG are planning to issue spot tenders to buy additional LNG cargoes. However, this may come at a higher cost.
Spot LNG prices, along with freight and insurance charges, have already risen due to the tensions in the Gulf and disruptions in shipping routes.
For now, industries are adjusting to reduced gas supplies as energy markets remain on edge.