Demand for LNG in India, China and Pakistan is expected to recover as supply disruptions in the Middle East ease and prices decline, reversing recent contraction trends amid geopolitical shocks.
LNG demand in India, China and Pakistan is expected to recover as the Middle East supply shock eases and prices retreat from recent highs, according to industry executives speaking at Gastech and reports by market analysts. The rebound would mark a reversal of the sharp pullback that followed disruption to flows through the Strait of Hormuz, which has constrained exports from key suppliers including Qatar and the United Arab Emirates.
The International Energy Agency said the Middle East crisis has disrupted international gas markets and delayed the next wave of global LNG supply. Its analysis said the closure of the Strait of Hormuz removed nearly 20% of global LNG supply from the market, pushing prices higher and forcing buyers in Asia and Europe to curb consumption, switch fuels or delay purchases.
That price shock has already been felt in India, where gas use has fallen in several price-sensitive industries. GAIL chairman Deepak Gupta said many sectors can quickly move away from gas when costs rise, while Petronet LNG chief executive Akshay Kumar Singh said demand remains, but customers want more stable prices. GAIL has said it was forced to ration gas use early in the disruption, although it has since restored supplies to about 90% to 95% of normal by sourcing cargoes from other markets.
Pakistan is also seen as a potential source of renewed demand if prices normalise and more cargoes become available. Masood Nabi, chief executive of Pakistan LNG, said new supply could lift consumption. Although solar power has helped ease Pakistan’s electricity shortages in recent years, households and other users still rely heavily on gas.
China, meanwhile, could see a stronger recovery once LNG returns to more typical price levels. PetroChina International chief executive Luo Yizhou said demand from gas-fired power plants could improve when prices fall back into a range of roughly $7 to $9 per million British thermal units. ExxonMobil has also said it expects long-term LNG demand growth in China to remain solid, supported by rising electricity consumption.
Analysts at Shell estimate that about 36 million tonnes of Middle East LNG supply have been affected this year. S&P Global has warned that the market may take time to rebalance, with new liquefaction capacity eventually adding fresh supply and potentially softening prices. For now, industry executives say the current slump in LNG demand across parts of Asia looks temporary rather than structural.
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