South Asia’s liquefied natural gas demand will fall by about 6 million tons this year, energy consultants Wood Mackenzie said, a swing of nearly 9 million tons from the growth of 2.7 million tons, or 7 percent, the firm had expected before the Iran war trapped most Qatari and Emirati supply inside the Persian Gulf. The reduction is split across the region: about 3 million tons in Bangladesh and about 1.5 million tons each in India and Pakistan.
The mechanism is price. Asian spot LNG has surged to three year highs as the Middle East supply shortfall persists, and price sensitive South Asian buyers have cut purchases rather than chase cargoes against European competition. Pakistan and Bangladesh felt the crisis more acutely than India because neither had diversified its procurement much before the war.
India’s relative resilience has a structure behind it. Its supplier base spans the United States, Nigeria and Oman as well as Qatar and the UAE, and its tiered demand management protected household city gas while industry absorbed the cuts. Even so, Indian demand is down about 1.5 million tons on the year, and its tender prices reached $26.4 per million British thermal units by September.
For the global balance, the finding matters because it identifies the clearing price of the current crisis. The LNG market is not short of demand at any price; it is short of demand at $26. Until Hormuz flows recover or spot prices fall back toward term contract levels, South Asian industrial gas use, including fertiliser production, will keep absorbing the adjustment.