Global natural gas shortage worsens as India
The hunt for natural gas is spreading to Asia’s developing economies, with India and Indonesia adding to the global demand pressure. Indian Oil Corp. and Gujarat State Petroleum Corp. have recently bought spot cargoes of liquefied natural gas after being absent from the market for months.
- Indonesia -- a major exporter -- has asked its gas producers to prioritize local customers, while Thailand and Bangladesh are also seeking prompt LNG shipments via tenders released in the last few days.
- The rising interest from South and Southeast Asia adds to elevated demand from Europe, which pushed prices to record highs last month.
- Consumption of the electricity feedstock and heating fuel, which typically sees a bump in the run-up to the northern winter, has risen as major economies recover from the depths of the pandemic.
- South and Southeast Asian buyers have been unusually active in the spot market for cargoes for January to March delivery, despite surging prices.
- This dynamic is playing out most starkly in Pakistan, where a gas shortage is curbing its crucial textiles exports, according to an industry trade organization, and posing economic and political risks for Prime Minister Imran Khan.
- One factor keeping prices from surging even higher is ample stockpiles in China, which overtook Japan as the world’s biggest LNG importer in 2021.
- Asia’s largest economy has spent the last year restocking its natural gas inventories.