West Asia tensions: GAIL says LNG supply cut to zero after Petronet invokes force majeure

State-run gas utility GAIL (India) Limited on March 5 said that liquefied natural gas (LNG) supplies under its long-term contract with Petronet LNG Limited have been reduced to zero after the supplier declared force majeure due to shipping disruptions in the Strait of Hormuz and possible operational issues at Qatar’s Ras Laffan liquefaction facilities.  

Follow live coverage on Wet Asia conflict here

In a disclosure to stock exchanges, GAIL said Petronet LNG issued the force majeure notice on March 3 under their Gas Sale and Purchase Agreement after LNG vessels faced navigation constraints while transiting between India and Qatar.  

The company said the restrictions stem from maritime navigation disruptions in the Strait of Hormuz and a reported shutdown of liquefaction facilities at Ras Laffan Industrial City, one of the world’s largest LNG export hubs.  

“Consequently, due to supply restrictions imposed by PLL, the allocation of LNG quantities to GAIL under the said contract has been reduced to zero with effect from March 4, 2026,” the company said in its filing.  

GAIL added that QatarEnergy — the upstream LNG supplier to Petronet LNG — has also warned of a potential force majeure event because of the escalating hostilities in the region.  

The disruption follows a sharp escalation in tensions after airstrikes by the United States and Israel on Iran, which has led to attacks on vessels in the Gulf region and severe disruption to energy shipments.  

Iran has reportedly launched drone and missile strikes targeting ships passing through the Strait of Hormuz — the world’s most critical oil and gas shipping corridor between Iran and Oman. The vital chokepoint, through which roughly 20% of global crude oil and petroleum products are transported, has seen tanker traffic nearly grind to a halt after multiple vessels were hit in recent days.  

The escalating conflict has also affected LNG flows from Qatar, one of India’s largest gas suppliers, raising concerns about supply security for energy-import dependent nations.  

GAIL said it is currently evaluating whether supply curtailments may be required for its downstream customers. “GAIL is currently assessing the situation with respect to any supply curtailment that may need to be imposed on its downstream customers,” the company said.  

However, the state-run gas utility clarified that LNG supplies from other sources and suppliers remain unaffected for now.

The company said it is closely monitoring developments but added that the financial and operational impact of the force majeure situation cannot yet be quantified.