Petronet LNG Shares Crash Nearly 12% After Qatar Halts Gas Production Amid Middle East Crisis

Shares of Petronet LNG Ltd came under heavy selling pressure on Wednesday after reports that Qatar, India’s largest supplier of imported liquefied natural gas (LNG), had declared force majeure following a halt in production linked to the escalating crisis in the Middle East.

The development triggered sharp declines in the stock and weighed on the broader city gas distribution sector as investors reacted to potential supply disruptions and rising uncertainty around global energy flows.

Sharp Fall In Petronet LNG Shares

On the BSE, shares of Petronet LNG fell as much as 11.69 per cent to Rs 273. On the National Stock Exchange NSE, the stock declined 11.95 per cent to Rs 271.75 during the session, reported TOI.

Later in the afternoon, around 1:30 PM, the stock was trading at Rs 282.45 on the BSE, down Rs 26.70 or 8.64 per cent. On the NSE, the share price stood at Rs 282.30, lower by Rs 26.35 or 8.54 per cent.

The steep drop followed reports that Qatar had halted LNG production after continued strikes in the Gulf region. The development raised concerns about potential disruptions to India’s natural gas supply chain, given the country’s significant reliance on Qatari LNG.

Qatar’s Role In India’s LNG Supply

Qatar is India’s largest supplier of imported natural gas and plays a crucial role in meeting domestic energy demand.

India imports around 27 million tonnes of LNG annually, and Qatar accounts for roughly 40 per cent of those supplies. The gas is used across several critical sectors, including power generation, fertiliser production, piped cooking gas and compressed natural gas (CNG) distribution.

Any disruption in Qatar’s production, therefore, has direct implications for industries that rely heavily on a steady gas supply.

Media reports indicated that the halt in production has already forced cuts in gas supplies to industrial consumers of up to 40 per cent.

Disruption Linked To Escalating Regional Tensions

According to reports, Petronet LNG informed gas marketers that Qatar had stopped LNG production following continued Iranian strikes in Gulf countries in retaliation for attacks by Israel and the United States.

The escalating confrontation in the region has disrupted energy shipments passing through the Strait of Hormuz, one of the world’s most critical maritime corridors for oil and natural gas trade.

Shipments of both crude oil and LNG through the strait have slowed sharply as security risks rise. The tensions have also driven up global energy prices and significantly increased war-risk insurance premiums and shipping costs.

Iran controls the Strait of Hormuz, and the route is vital for India’s energy imports. Roughly half of India’s crude oil imports and more than half of its LNG supplies move through this narrow passage, including cargoes from Qatar and the United Arab Emirates.

Ripple Effect Across Gas Companies

The news also triggered declines in shares of other companies linked to the gas distribution sector.

On the BSE, Mahanagar Gas Ltd fell 8.50 per cent, while Indraprastha Gas Ltd declined around 5 per cent and Gujarat Gas Ltd slipped 4 per cent.

The broader reaction in gas stocks reflects investor concerns that supply disruptions could affect volumes, margins and operational planning across the sector.

Supply Adjustments By Gas Marketers

Petronet LNG has reportedly notified its key offtakers, GAIL (India) Ltd and Indian Oil Corporation (IOC), about the disruption in supplies.

Gas marketers have responded by adjusting distribution priorities. While retail CNG supplies have been maintained, industrial consumption has been curtailed to manage available volumes.

According to sources, supply reductions for industrial users currently range between 10 per cent and 40 per cent.

This approach allows companies to ensure continuity for essential segments such as transport and household consumption while rationing supplies for industrial buyers.

Global LNG Market Could Tighten

The disruption in Qatar’s output has also raised concerns about the global LNG market.

Qatar is the world’s second-largest LNG exporter, and any prolonged outage could increase competition for available cargoes in international markets.

Bloomberg vessel-tracking data shows that Qatar accounted for nearly half of India’s LNG imports last year, highlighting the extent of India’s reliance on the Gulf producer.

Under a long-term supply agreement, Petronet LNG purchases 8.5 million tonnes per annum (mtpa) of LNG from Qatar. In addition to this contracted volume, the company also buys additional cargoes from the spot market to meet demand.

Apart from Petronet, companies such as Indian Oil Corporation and other Indian firms also hold LNG import agreements with the United Arab Emirates.