India LNG Imports Hit Six-Year High Amid Hormuz Closure

India's liquefied natural gas imports reached 2.6 million tons in August, the highest monthly volume since October 2020. Deliveries rose 40 percent year-on-year as the Government of India and domestic distributors sought to replace shipments disrupted by the war in Iran and the effective closure of the Strait of Hormuz.

This surge in buying occurred despite spot prices more than doubling from pre-war levels. Some shipments reached costs as high as $24 per million British thermal units, a price paid for a September shipment by the Gujarat State Petroleum Corporation. The demand is driven primarily by city-gas distributors and government-subsidized fertilizer producers facing limited domestic supplies.

The United States replaced Qatar as the top LNG supplier to India during August, providing more than one-third of all deliveries. This shift in procurement is currently reducing the volume of LNG available to Europe as that region attempts to refill its own inventories.