China and India LNG Demand Poised to Recover as Prices Ease

LNG demand in China and India is expected to rebound once the Middle East conflict subsides and international gas prices move lower, according to industry executives cited by Reuters.

The conflict has significantly disrupted LNG exports from Qatar and the UAE through the Strait of Hormuz, driving Asian spot LNG prices sharply higher to nearly $30/MMBtu, compared with around $10/MMBtu before the war.

High Prices Pressure India’s LNG Consumption

GAIL Chairman Deepak Gupta said the sharp increase in LNG prices has weighed heavily on India’s price-sensitive demand. Some industrial users have responded by shifting to alternative fuels.

To compensate for disrupted Qatari and Emirati supplies, GAIL and PetroChina have also been looking for replacement LNG cargoes. Shell estimates that approximately 36 million tons of Middle Eastern LNG supply has been lost so far this year.

Demand Impact Expected to Be Temporary

Executives from GAIL, PetroChina and ExxonMobil expect the current demand weakness to be temporary.

PetroChina expects Chinese gas-fired power generation demand to improve once LNG prices return to a more normal range of $7–9/MMBtu. GAIL Chairman Deepak Gupta also expects around 150–200 million tons of new global LNG supply to come online over the next four to five years, which could help bring prices down.

Meanwhile, ExxonMobil remains positive on the longer-term outlook, continuing to expect strong global LNG demand growth through 2050.

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