South Asia LNG Demand to Fall 6 Mt in 2026, Wood Mackenzie Says
Wood Mackenzie forecasts South Asian liquefied natural gas consumption will drop by 6 million tonnes this year, reversing earlier growth projections due to Middle East conflict.
South Asia LNG Demand Reverses Outlook
Liquefied natural gas (LNG) demand across South Asia is now expected to decline by approximately 6 million tonnes (Mt) in 2026, according to analysis from Wood Mackenzie. This marks a significant reversal from an initial projection for 2.7 Mt, or 7%, growth for the region this year.
The commercial intelligence firm has also materially downgraded its outlook for LNG consumption beyond 2026. This shift is attributed to supply vulnerabilities exposed by the Middle East conflict, which disrupted critical LNG flows.
Pakistan and Bangladesh Face Severe Supply Shocks
Pakistan has been the most severely affected market. In 2025, 99% of its LNG imports originated from Qatar. The closure of the Strait of Hormuz recently reduced LNG bound for Pakistan by up to 0.4 Mt per month from March to November 2026. This led to over 2.5 Mt of gas demand destruction, with Pakistan curtailing demand and switching fuels.
Wood Mackenzie has revised Pakistan’s LNG demand forecast for 2027 down to 3.7 Mt from 6.6 Mt in 2025. Bangladesh, which imported over 70% of its LNG from Qatar in 2025, also faced significant challenges.
High Spot Prices and Fiscal Strain
Bangladesh was forced to procure spot cargoes at high prices, paying between US$23–28/mmbtu for March delivery and consistently over US$18/mmbtu on average from March to June 2026. These gas shortages caused prolonged power outages and increased reliance on coal.
India fared comparatively better, implementing a tiered demand-management strategy that protected city gas distribution while cutting supply to industrial sectors. India’s tender prices ranged from US$16.8–18.8/mmbtu between March and June 2026, rising to US$26.4/mmbtu by September, yet tendering demand remained robust.
Diversification Essential for Future Growth
Governments across South Asia have implemented emergency measures such as gas rationing and power cuts, but Wood Mackenzie cautions these actions only postpone costs. Johnson Quadros, Head of Gas and LNG research at Wood Mackenzie, stated that the Middle East conflict starkly exposed structural vulnerabilities in South Asian LNG markets.
He emphasised that affordable LNG is crucial for the 60% demand growth expected through 2040, with South and Southeast Asian economies central to this trajectory. Buyers who do not prioritise supply diversification, flexible pricing, infrastructure resilience, and trading capabilities risk similar vulnerabilities in a larger, more interconnected market.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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