The closure of the Strait of Hormuz impacted 46 per cent of India’s LNG imports from Qatar,
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The West Asia conflict has adversely affected the LNG market across Asia, leaving South Asian countries grappling with severe shortages. India alone is facing an estimated LNG shortfall of around 1.5 million tonnes (mt) per month.
Wood Mackenzie, in its latest commentary, pointed out that Asia accounted for nearly 90 per cent of Qatari and the UAE LNG shipments transiting the Strait of Hormuz (SoH) in 2025. Within Asia, South Asia is among the most affected.
The South Asian picture is materially harder, the firm said adding that India, Pakistan and Bangladesh are navigating supply disruption in markets that remain structurally sensitive to price, and spot prices are now at levels that are translating directly into demand curtailment, industrial fuel switching and, in the most acute cases, fertiliser plant shutdowns and power sector load shedding.
“India faces potential supply curtailments of up to 1.5 mt per month, the largest exposure in the South Asia region by quantity. Gas allocation has been diverted to essential sectors,” the energy sector consultancy said.
Urea output is being squeezed by Qatari LNG curtailments. Energy-intensive industries are cutting run rates and switching to propane, fuel oil and naphtha at pace. The fuel-switching dynamic carries its own geopolitical complexity: India imports 80–85 per cent of its liquefied petroleum gas (LPG) via the SoH, meaning switching fuels trades one supply concentration risk with another, it added.
As the closure of the SoH impacted 46 per cent of India’s LNG imports from Qatar, the world’s fourth largest LNG importer diversified its cargoes with the US filling in the major gap followed by Oman, Nigeria and Angola.
On LNG sourcing, Equirus Securities in a recent note said “As Europe legally phases out Russian LNG from 2027, discounted Russian cargoes seeking alternative destinations could add further diversification lever for India.”
Asian demand
Wood Mackenzie anticipates that Asian LNG demand is heading for a second consecutive year of decline.
“Wood Mackenzie forecasts Asia Pacific demand at 257 mt in 2026, down from 268 mt in 2025 and a peak of 278 mt in 2024, as the Middle East conflict tightens global supply and pushes spot prices to levels that are forcing buyers across the region to cut volumes, switch fuels and accelerate supply diversification,” it added.
A tighter global LNG market is doing what it always does. It separates buyers with contracted cover and fuel-switching options from those without,” said Maoping Hu, principal analyst for gas and LNG at Wood Mackenzie.
“Japan and China are better insulated. South Asia is absorbing a genuine shock. But even the more resilient markets are making decisions now on nuclear, on coal, on long-term contracting diversification that will shape their LNG demand trajectories well into the next decade,” he added.
Wood Mackenzie expects Asia Pacific LNG demand recovering to 279 mt in 2027 and reaching 297 mt by 2028, as geopolitical risk subsides, new regas infrastructure comes online and structural demand growth resumes across South-East and South Asia.
That recovery path implies a net gain of 40 mt over two years, a significant volume that will require both new supply and a normalisation in spot pricing to materialise.
The pace and shape of that recovery will depend on several variables that remain genuinely uncertain: the duration and severity of Middle East supply disruption, the trajectory of spot prices and competition from oil products.
At a regional level, this includes the rate at which Chinese and South Asian gas demand will rebound when prices fall, nuclear restart timelines in Japan and South Korea, and the speed at which South-East Asian power gas demand will progress, Wood Mackenzie said.
Published on July 14, 2026
