China and India LNG demand expected to recover as prices ease
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Aerial shot of a gas terminal featuring LNG storage tanks and tanker ships in turquoise waters. File photo, |
BANGKOK — September 15, 2026
Liquefied natural gas demand in China and India is expected to recover after the Middle East conflict eases and global LNG prices fall, industry executives said. Both countries have reduced imports as high prices make gas less competitive, leading some power producers and industries to turn to coal and oil.
The conflict has disrupted LNG exports from Qatar and the United Arab Emirates, with much of their supply unable to move through the Strait of Hormuz. The disruption has tightened global supplies and pushed Asian spot LNG prices to nearly $30 per million British thermal units, compared with about $10 before the conflict.
Shell estimates that around 36 million metric tons of LNG supply from the Middle East has been lost so far this year. Asian buyers are also competing with European customers for limited supplies as countries prepare for the northern hemisphere winter.
Deepak Gupta, chairman of India's GAIL, said high prices were already affecting demand in India, particularly among industries that are sensitive to fuel costs. Some companies can switch to other fuels when natural gas becomes too expensive.
GAIL and PetroChina, China's largest LNG importer, have sent trading teams to find alternative supplies to replace LNG from Qatar and the UAE. The companies have been seeking cargoes from other producing regions as the conflict continues to disrupt traditional supply routes.
Gupta said India initially had to restrict some gas consumption but later restored supplies to about 90% to 95% of normal levels as GAIL expanded its ability to purchase LNG from alternative sources.
Both companies expect the current reduction in demand to be temporary. They believe consumption will increase once the Middle East supply situation improves and LNG prices return to more manageable levels.
Gupta said additional LNG production expected to enter the global market over the next four to five years could also help reduce prices. He estimated that between 150 million and 200 million tons of new LNG capacity could become available during that period.
He also expects India's power sector and other industries to increase their use of natural gas over time, partly because gas produces fewer emissions than some other fossil fuels.
In China, Luo Yizhou, chief executive of PetroChina International, said gas-fired power generation could see stronger LNG demand once prices return to what he considers a normal range of about $7 to $9 per MMBtu. He pointed to continued growth in electricity consumption despite the recent decline in LNG imports.
Luo said high prices had temporarily suppressed Chinese demand rather than permanently reducing the country's need for LNG. He expects consumption to recover as market conditions become more stable.
The outlook for China and India therefore depends heavily on how quickly Middle Eastern LNG supplies can return to international markets and how far prices fall. Until then, buyers are likely to continue seeking alternative cargoes while power producers and industrial users adjust their fuel choices.
