GAIL, Petronet LNG, other gas stocks in focus amid rising expectations of prolonged Iran-Israel war

The shares of gas companies such as GAIL, Petronet LNG among others tanked as much as 6% on Monday as the war between Iran and Israel-US further escalated over the weekend, triggering concerns over the prolonged closure of the Strait of Hormuz and the resulting supply vacuum for liquefied natural gas (LNG).

While the US administration led by President Donald Trump claims the Strait remains open and has offered to insure vessels transiting the narrow waterway, the market doesn’t seem convinced that Iran won't attack any ship attempting passage.

Iraq and Kuwait have begun cutting oil output, adding to earlier liquefied natural gas reductions from Qatar, as the war blocks shipments from the Middle East. India imports more than 60% of its domestic LPG needs, and around 85-90% of these imports pass through the Strait of Hormuz. India consumed 31.3 million tonnes of LPG in 2024-2025, of which only 12.8 million tonnes were produced domestically.


Iran today named Mojtaba Khamenei to succeed his father Ali Khamenei as the country’s supreme leader, signalling that Tehran remains in charge amid the conflict. Israel has threatened to kill Khamenei’s successor, while US President Donald Trump said the war may only end when Iran’s military and rulers have been wiped out.

The Strait of Hormuz remains effectively shut for regular traffic after several tankers were bombed in the area. More than 20% of the world’s oil supply passes through the Strait of Hormuz, which connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.

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Earlier last week, the Indian government invoked its emergency powers and directed oil refiners to ensure there is no shortage of LPG for domestic customers due to supply constraints arising from rising geopolitical tensions in West Asia.

With no sign of a diplomatic resolution to the war, investors will likely remain cautious about gas stocks. Petronet LNG shares declined more than 9% last week after the company issued force majeure notices to QatarEnergy and others because vessels were unable to safely transit through the Strait of Hormuz.

MGL shares declined nearly 14% last week, while IGL fell over 5%. Adani Total Gas shares plunged more than 6%, and GAIL fell over 7%.

“Markets remained cautious amid the ongoing US-Israel conflict with Iran, with participants closely monitoring developments in the region. Concerns intensified after shipping activity through the Strait of Hormuz saw a near halt as the conflict continued, raising fears of disruptions to global oil supplies,” said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services.

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