China, India LNG imports to rebound post-war, executives say

China and India expect their liquefied natural gas imports to recover from multi-year lows once the Middle East supply crisis caused by the U.S.-Iran war subsides and prices retreat, senior energy executives said at the Gastech conference in Bangkok on Monday.reuters

The conflict has blocked Qatar and the United Arab Emirates from exporting most of their LNG through the Strait of Hormuz, which previously carried about a fifth of global LNG supplies. Shell ↘ 0.33%, the world's largest LNG trader, estimates roughly 36 million tons of Middle Eastern LNG supply has been lost so far this year, according to Cederic Cremers, the company's President for Integrated Gas.reuters

Price Surge Forces Fuel Switching

Asian spot LNG prices have surged to nearly $30 per million British thermal units from a pre-war range of around $10 per MMBtu, as buyers in the region compete with Europe for limited cargoes ahead of winter. The price spike has hit India particularly hard, where many industrial users can switch to cheaper alternatives.moneycontrol+1

"The prices have hit through the roof … and that is definitely impacting the demand insofar as India is concerned because there are a lot of sectors which are price sensitive," GAIL Chairman Deepak Gupta said.reuters

Both GAIL and PetroChina, China's top LNG importer, have deployed trading teams to secure replacement cargoes since the war broke out. PetroChina International CEO Luo Yizhou recalled that his team was already at work on February 28, a Sunday during the Lunar New Year holiday, when the U.S. and Israel launched attacks on Iran. "We were probably one day ahead of the market because most of the other companies start to work on Monday," Luo said.reuters

Recovery Expected With New Supply

Gupta said India initially had to curtail gas consumption but later restored supplies to roughly 90% to 95% of normal levels as GAIL expanded its sourcing from other markets. He pointed to an estimated 150 million to 200 million tons of new LNG capacity expected to come online over the next four to five years, which could ease prices.egyptoil-gas+1

In China, Luo said demand from gas-fired power plants would rebound once prices return to a "normal" range of $7 to $9 per MMBtu, attributing the drop in imports to temporary suppression rather than a structural decline.reuters

"I don't think it will kill the demand in China," Luo said.reuters