Petronet LNG, Mahanagar Gas shares slide up to 9% as global LNG prices surge on Middle East supply disruption

Read Time:2 Minute, 25 Second

The weakness in gas stocks came as Asian spot LNG prices jumped to about $25.40 per million Btus — the highest level since 2023. The stocks of Petronet LNG, Mahanagar Gas, GAIL India and Indraprastha Gas fell 4-9% each.

Petronet LNG and Mahanagar Gas shares fell up to 9 percent
LNG prices surged after Middle East supply disruptions
India started rationing gas as supply risks intensified

Shares of India’s LNG-linked companies fell sharply on Tuesday, with Petronet LNG dropping about 9 percent and Mahanagar Gas nearly 8 percent, as global liquefied natural gas prices surged to their highest level since 2023 following supply disruptions in the Middle East.

Among the major decliners, Petronet LNG shares dropped over 9 percent to Rs 280.85, while Mahanagar Gas fell nearly 8 percent to Rs 1,110.9. GAIL (India) stock declined around 6 percent to Rs 155.18 and Indraprastha Gas slipped over 4 percent to Rs 159.73 during the session.

The weakness in gas stocks came as Asian spot LNG prices jumped to about $25.40 per million British thermal units — the highest level since 2023. The conflict in the Middle East has disrupted shipping through the Strait of Hormuz and forced a shutdown at Qatar’s major export facilities.

Also read | L&T shares tumble over 7%, hit five-week low as Middle East exposure weighs

Qatar accounts for roughly a fifth of global LNG supply, much of which is shipped to Asian buyers including India, China, South Korea and Taiwan, leaving import-dependent markets scrambling for alternatives as supply risks intensify.

China and India are set to take the biggest hit from Qatar’s shutdown because of their exposure, and these countries may switch to alternatives such as coal instead of procuring expensive spot cargoes at a premium, said Evan Tan, an LNG analyst at ICIS, as cited in a Bloomberg report. In the long run, the fallout may push companies to “rethink their portfolio diversification strategies”, he said.

Reports indicated several Asian countries have begun activating contingency plans, including tapping the spot market or diversifying supply sources, while India has started rationing natural gas amid the tight supply situation.

The disruption has also pushed LNG shipping costs sharply higher, with daily freight rates rising more than 40 percent as tanker traffic through the Strait of Hormuz faces constraints.

The broader market was also under pressure, with the Sensex down about 1,360 points and the Nifty falling nearly 446 points in mid-morning trade, while the Nifty Oil & Gas index declined around 2.3 percent.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Courtsey To : Moneycontrol