Middle East Conflict Squeezes South Asian Gas Markets

India has recorded a 1.5-million-ton drop in natural gas demand this year, a consequence of the volatility gripping the energy sector. Wood Mackenzie consultants report that regional demand across South Asia is now expected to crash by 6 million tons, a stark reversal from initial projections that anticipated a 7% growth. While India maintains a degree of insulation through a diversified supplier base—including the United States, Nigeria, and Oman—its neighbors face a more precarious reality.

Bangladesh and Pakistan have been hit significantly harder due to their limited procurement alternatives. Pakistan faces a bill exceeding $1 billion to secure winter supplies, with the government forced to purchase spot cargoes at double the rates typically paid for Qatari term imports. In India, the financial strain is visible in tender award prices, which surged to $26.4 per million British thermal units (MMBtu) in September, up from the $16.8–18.8 range seen earlier in the year.