India is pausing the signing of long-term liquefied natural gas (LNG) supply contracts, opting for a wait-and-see strategy in the face of an impending global oversupply. The country’s highly price-sensitive buyers are betting on a drop in market values to negotiate more favorable terms.
A change in the global market and LNG agreements
With a target of doubling the share of gas in its energy mix to 15% by 2030, India faces the challenge of balancing its energy needs with import costs. In recent years, high LNG prices have discouraged both spot purchases and the signing of long-term contracts.
The situation could change soon. Analysts and entities such as the International Energy Agency (IEA) foresee a 10% increase in global LNG supply by the end of this year, driven by the entry into operation of new export projects, mainly in the United States and Qatar.
This transformation in the gas landscape could favor India and other Asian importers, which are seeking more affordable terms. By shifting from a seller’s to a buyer’s market, price-sensitive nations could access better contract terms, including lower tariffs and greater flexibility.
The expected decline in spot prices in Asia, coupled with pressure on European benchmarks such as TTF, could incentivize higher demand, particularly in emerging regions where gas remains a key transition option.
According to the IEA, the acceleration in global production could continue in 2026, with growth exceeding 7%, marking the fastest pace since 2019. This scenario will not only put downward pressure on LNG prices, but will also foster greater liquidity in regional markets thanks to the growing interconnection between them.
India, aware of this structural change, is positioning itself strategically to capitalize on a moment of increased competition among exporters. The pause in the signing of contracts does not reflect a negotiating weakness, but rather an accurate reading of the balance of forces that could redefine global LNG trade. global LNG trade trade in the coming years.
Source and photo: OilPrice