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| Gas problems |
Meta Description: The Iranian attack on Qatar’s Ras Laffan has halted 40% of India’s LNG supply. We analyse the global fallout, the impact on Indian industries, and what the future holds for energy security.
In the early hours of Thursday, a major escalation in the already volatile Middle East conflict sent shockwaves through the global economy. Iran launched strikes on Qatar’s Ras Laffan Industrial City, the world’s largest liquefied natural gas (LNG) hub . For the average person in London or New York, this might have registered as just another headline about geopolitical tension. But for India, it was an economic tremor centered directly beneath one of its most vital supply lines.
The attack, which caused extensive damage to facilities jointly operated by QatarEnergy and Shell, has forced a halt in production and triggered a declaration of force majeure by Qatari authorities . This isn't merely a disruption; it is a fundamental shock to a system that India—the world’s most populous nation and fastest-growing major economy—relies on to keep the lights on and the factories running.
Here’s a deep dive into why this gas hub is so critical, how the attack impacts India’s daily life, and what the road ahead looks like.
The Crown Jewel: Why Ras Laffan Matters
To understand the panic in New Delhi, you must first understand the scale of Ras Laffan. Situated about 50 miles from Doha, this industrial city is not just another processing plant; it accounts for roughly 20% of the entire global LNG supply .
The complex sits atop the North Field, the northern extension of the world's largest gas field, which Qatar shares with Iran (known as South Pars on the Iranian side) . The recent Israeli strikes on Iran’s South Pars prompted Tehran to retaliate by hitting the Qatari side of the infrastructure—a dangerous game of tit-for-tat that has now taken civilian energy infrastructure hostage .
Initial reports from Wood Mackenzie, a leading energy consultancy, suggest that the damage is far worse than initially hoped. While early estimates hoped for a two-month disruption, analysts now warn that timelines are "likely to be exceeded," potentially reshaping global supply growth through 2027 and 2028 .
The India Factor: A 40% Dependency
For India, this is not a distant problem. It is a immediate crisis. Data from Kpler, a commodity market analyst, paints a stark picture of dependency:
In January 2026, India imported 2.58 million tonnes of LNG. Qatar supplied 1.06 million tonnes—a staggering 40.9% .
In February, just before the shutdown, Qatar’s share remained consistently high at 41.2% .
Across 2025, nearly half (45.6%) of India’s LNG intake was anchored to Qatari supply .
This translates to about 8.5 million tonnes per annum under long-term contracts via Petronet LNG, plus additional spot purchases . When Qatar declared force majeure—a legal clause that frees a company from liability due to unforeseen circumstances—it formally suspended these obligations .
The Immediate Fallout: Rationing and Rising Costs
The void left by Qatari gas is impossible to fill overnight. Unlike oil, which can be redirected via pipelines or different tanker routes, LNG is highly infrastructure-specific. Furthermore, 93% of all LNG traffic through the Strait of Hormuz originates in Qatar . With shipping through the strait at a standstill due to the threat of attacks, the supply chain is choked at both ends.
The Indian government has already been forced to act. According to reports, authorities have instructed industries to brace for cuts ranging from 10% to 40% . A rationing system is now in place :
Priority 1 (100% supply): Household gas, transport fuel (CNG), and LPG production. The government is protecting the common citizen from immediate disruption.
Priority 2 (80% supply): Industrial and manufacturing units. This is where the economic pain begins.
Priority 3 (70% supply): Fertiliser plants. This is perhaps the most dangerous cut.
The Domino Effect on Daily Life
1. Food Inflation:
The cut in fertiliser production is a ticking time bomb for food inflation. India relies heavily on natural gas to produce urea and other fertilisers. If farmers cannot get adequate supply for the upcoming Kharif season, crop yields could suffer, pushing food prices higher just as the summer heat peaks.
2. Power and Transport:
While CNG stations are currently protected, the reduction in industrial supply creates a market squeeze. Gas marketers are having to turn to the spot market to replace lost Qatari volumes, but spot prices have already surged. In Europe, gas prices jumped by as much as 52% following the attack—the largest spike since the Ukraine war began . These higher costs will eventually trickle down to consumers.
3. Strategic Industries:
The attack also knocked out the Pearl GTL facility, the world's largest gas-to-liquids plant, which converts gas into cleaner-burning fuels and lubricants . Furthermore, Qatar is responsible for about a third of global helium production, which is now entirely offline . This affects everything from medical MRI machines to semiconductor manufacturing.
The Geopolitical Tightrope
India finds itself in a diplomatically precarious position. New Delhi has historically maintained balanced ties with both Israel and Iran, while relying on the Gulf monarchies for energy and remittances.
External Affairs Minister Spokesperson Randhir Jaiswal acknowledged the severity, stating that "with the latest attacks, our LNG supply is going to be impacted" and that attacks on energy infrastructure "need to cease" .
Prime Minister Narendra Modi has been on the phones, speaking with the leaders of France, Jordan, Oman, and Malaysia, emphasizing the need for "unhindered transit of goods and energy, including through the Strait of Hormuz" . This is India stepping up to protect its core economic interests, but the reality is that India has limited leverage to stop the missiles.
What Happens Next?
The global LNG market operates with very little spare capacity. The US and Australia, the other major producers, cannot simply flip a switch to replace 20% of global supply .
Prolonged High Prices: We are likely entering an era of sustained high energy prices. The marginal price of gas will remain elevated until Qatari production resumes or alternative long-term contracts are signed.
Diversification is Key: India is now scrambling. Reports suggest New Delhi is looking to increase spot cargoes from the US and secure more long-term agreements from the UAE, Oman, and even African suppliers like Algeria .
Domestic Production Push: This crisis underscores the urgency of ramping up India's own domestic hydrocarbon production and accelerating the transition to renewable energy. Every megawatt of solar or wind power generated is a megawatt of gas import saved.
The attack on Ras Laffan is a brutal reminder that energy security is national security. For India, the path forward involves not just firefighting the current shortage, but fundamentally re-engineering its energy strategy to weather the next storm.
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