India buys its most expensive LNG in years as war upends market

Energy companies in India have been paying some of the highest prices they’ve paid in years for liquefied natural gas on the spot market as the Iran war continues to disrupt supplies of the fuel.

Gail India Ltd., a state-run gas company, recently paid more than $23 per million British thermal units for a cargo to be delivered in September, according to people familiar with the matter. India’s Gujarat State Petroleum Corp. paid in the mid-$23 range per mmbtu for a September cargo, the people said.

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Those are the most expensive LNG cargoes imported into the India since 2022, according to the people who asked not be name because the deals aren’t public.

State-backed energy companies in India are turning to the LNG spot market and bidding up prices as the government is pushing to support fertilizer producers, which use natural gas.

India has typically bought LNG through long-term contracts from Qatar, the world’s second largest supplier of the fuel. But Qatar’s massive export terminal was damaged by Iranian attacks in March, and ships are still largely blocked from passing through the Strait of Hormuz.

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India is also having to compete with LNG buyers in Europe, where gas prices have soared to a five-month high.

A third Indian buyer, Bharat Petroleum Corp., also agreed to buy an LNG cargo from the spot market this week, the people said. Bloomberg couldn’t confirm the price.