Explained: How Qatar LNG Attacks Could Hit India’s Energy Security, Prices, and Industry

New Delhi: The recent missile strikes on Ras Laffan Industrial City in Qatar are not just a geopolitical flashpoint, they have direct and potentially long-term consequences for India’s energy security.

With nearly half of India’s LNG imports coming from Qatar, the disruption has triggered concerns over supply stability, price spikes, and industrial impact.

Why This Matters So Much for India

India is very dependent on imported natural gas to meet its energy requirements, especially liquefied natural gas, which has resulted in importing approximately 27.8 million metric tonnes of LNG in 2024 alone.Out of this, nearly 47%, or 11.3 MMT, came from Qatar.

This makes Qatar India’s single largest gas supplier. Now, the missile attacks have reduced Qatar’s LNG export capacity by around 17%, after damage to key facilities operated by QatarEnergy. More importantly, repairs could take 3 to 5 years.

What this means

India is exposed not just to a short-term disruption, but a prolonged supply constraint.

Immediate Impact: Supply Tightness and Price Pressure

When a major supplier like Qatar loses capacity, global LNG supply shrinks. Since LNG is traded globally, even countries not directly importing from Qatar feel the impact through rising prices.

For India, this creates a double challenge including, reduced availability of LNG cargoes and higher prices for spot purchases. Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings of ICRA, warn that this disruption could push global LNG prices higher over the long term.

He said, “The damage to the Ras Laffan facilities' capacities accounting for about 17% of Qatar's LNG exports and which may take up to 5 years to repair would impact the global LNG markets over the long term. As Qatar exports 19% of the globally traded LNG using the Ras Laffan facility, a significant reduction in production at this facility would have ramifications for the LNG markets over the long-term leading to higher prices of LNG.“

Why this hurts India more

India is a price-sensitive market. Higher LNG prices often lead to lower imports, forcing industries to cut usage or switch fuels.

Government Response: Diversification in Action

The Indian government has acknowledged the risk but says mitigation efforts are already underway. Sujata Sharma, Joint Secretary at the Ministry of Petroleum and Natural Gas, said, “The war is ongoing, and naturally, it is affecting us. All efforts are being made to diversify our sources. Qatar’s LNG production has been impacted, which will also affect India, as 47 per cent of our LNG imports previously came from Qatar. We are addressing this by sourcing cargos from other suppliers.

“While Qatar continues to hold a significant share in LNG supply, we also have major suppliers like the United States and Australia. In crude oil, our imports are already diversified, with 70 per cent coming from regions outside the Strait of Hormuz. Regarding LPG, 90% was previously imported from the Middle East, but we are actively diversifying here as well, with some LPG now coming from the United States.”

However, diversification has limits because Long-term LNG contracts with Qatar are cheaper and more stable. Spot cargoes from other countries are often more expensive. So while India can replace volumes, it may have to pay more.

Sector-Wise Impact in India

The effects of this disruption won’t be uniform, they will hit different sectors differently:

1. Fertiliser Sector: Natural gas is a key input for urea production. Any disruption or price rise could increase fertiliser subsidy burdens for the government.

2. Power Generation: Gas-based power plants, already underutilised due to high fuel costs, may find it even harder to operate economically.

3. City Gas Distribution (CGD): CNG (for vehicles) and PNG (for households) could become more expensive if input gas costs rise.

4. Industry: Many of the sectors that depend on gas to produce products (ceramics, steel, glass, etc.) will be under cost pressure, and thus lose out on a competitive advantage.

Can India switch to alternatives?

There are many viable options in the short term, with trade offs between them.Fuel options presented include furnace oil and Naphtha. Furnace oil is already widely used as an industrial fuel, with a high heat output, averaging more than 10,000 kcal/kg. Naphtha is used as a feedstock for petrochemical applications. Furnace oil, as defined by the Bureau of Indian Standards (BIS), is approved for use in all heavy industrial applications, therefore can be relied upon to be a consistent industrial fuel.

However, furnace oil and Naphtha produce greater amounts of pollution than natural gas when they are used as fuel; the use of these fuels will lead to increased levels of carbon emissions. However, switching between the listed fuels may not be a simple process for everyone. So alternatives are a stopgap, not a full solution.

LPG and Other Hidden Risks

The disruption is not limited to LNG. The attacks also affected associated outputs: LPG (13% of Qatar’s exports) Naphtha Condensates

This matters because India imports nearly 90 per cent of its LPG from the Middle East. Even a partial disruption could tighten LPG supply, increase subsidy burdens, affect household cooking fuel availability.

Long-Term Concern: Structural Vulnerability

The bigger issue is structural. India’s energy system still depends heavily on imports: LNG: High dependence on Qatar LPG: Dominated by Middle East Crude: Though diversified, still import-heavy. The incident highlights a key risk: geopolitical shocks can quickly disrupt supply chains.

IndianOil’s Role: Building Domestic Strength

In order to address the current uncertainty, Indian Oil Corporation has been focused on growing its petrochemical capacity so that it can add greater value to the hydrocarbons it already has.

The company plans Rs 30,000 crore in investments across Naphtha cracker complexes, polymer and polypropylene plants, Paraxylene and PTA production.

If there is uncertainty about future imports, India should maximise others that are already available domestically. In addition to maximising its use of available domestic hydrocarbons, IndianOil is expanding internationally through the export of petrochemical products to 76 countries.

The Qatar disruption is a stark reminder of the fact that energy security also requires resilience rather than merely securing an uninterrupted supply. The missile attacks on Qatar’s LNG export hub are not some distant geopolitical event; they have a direct impact on India’s energy profile.

In the near term, India can manage through diversification and changing fuels. However, in the longer term, the disruption reveals a deeper vulnerability in India's energy supply through dependency on geopolitically volatile regions for energy impots.