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India’s LNG demand drops in 2025 as buyers await supply wave, price drop
India’s annual liquefied natural gas demand is set to contract in 2025 for the first time in years, as buyers hold out for a surge in production that is expected to push down prices.
The world’s fourth-biggest LNG importer bought about 16 million tonnes of the super-chilled gas in the eight months through August, down 10 per cent from a year earlier, according to ship-tracking data compiled by Bloomberg.
Purchases slowed as elevated spot prices made LNG less competitive against alternative fuels, while monsoon rains brought cooler weather and reduced power demand. The pullback offers some relief to a global gas market that’s remained tight since Russia’s 2022 invasion of Ukraine forced Europe to pivot to LNG, boosting competition with Asia.
India’s imports are expected to rebound as soon as next year, helped by a looming supply glut that should drag prices lower. Projects coming online from the US to Qatar starting in 2026 are set to add volumes that will outstrip demand growth through the rest of the decade.
“We expect the dip in 2025 is a temporary price-driven phenomenon,” said Kaushal Ramesh, vice president for gas & LNG research at Rystad Energy. “The years ahead will see more contracts ramp up and also lower spot prices.”
Demand for gas from industries, refineries and the fertilizer sector in the South Asian nation has plunged this year, according to oil ministry data, mainly due to high prices. Asian spot LNG has traded at more than $11 per million British thermal units this year — above the level at which price-sensitive Indian companies typically step in to buy.
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