U.S. Becomes India's Top Gas Supplier Amid Iran War
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
lngnatural-gasindia-energy
Fazen Markets Editorial Desk
Collective editorial team · methodology
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A CNBC report on 11 June 2026 confirmed the United States has become India’s largest supplier of Liquefied Natural Gas. The shift is a direct result of regional supply disruptions from the Iran conflict, which has curtailed India’s access to traditional Gulf shipments. The U.S. supplied over 40% of India's gas imports in the first quarter of 2026, up from just 15% two years prior. The landmark shift underscores a rapid and significant reorientation of global energy trade routes.
India’s natural gas demand has grown at an average annual rate of 6% since 2020, driven by industrial fuel switching and growing urban distribution networks. The country was historically reliant on spot and short-term contracts from Qatar, the UAE, and other Gulf Cooperation Council members.
The current geopolitical catalyst is decisive. The intensification of open conflict between Israel and Iran into a regional war has rendered the Strait of Hormuz a high-risk transit corridor for shippers. Insurance premiums for vessels using the route have spiked, and many operators have declared force majeure on deliveries.
This disruption created an immediate supply gap for India, which imports nearly 50% of its gas consumption. The U.S. was uniquely positioned to fill this gap. Washington’s multi-year diplomatic and commercial push to sell more American energy found its moment, coinciding with the startup of new U.S. LNG export trains that increased available capacity by 12% year-on-year.
U.S. LNG deliveries to India averaged 2.1 billion cubic feet per day (bcfd) in Q1 2026, according to ship-tracking data. This represents a 180% year-on-year increase. The surge has given the U.S. a 42% share of India’s import market, displacing Qatar's 28% share. India's total gas imports for the quarter were 5.0 bcfd.
A comparison of quarterly LNG supply sources to India illustrates the magnitude of the shift:
| Quarter | U.S. Share (%) | Qatar Share (%) | Other Gulf (%) |
|---|---|---|---|
| Q1 2024 | 15 | 38 | significantly higher |
| Q1 2025 | 24 | 35 | significantly higher |
| Q1 2026 | 42 | 28 | significantly lower |
U.S. LNG benchmark prices, represented by the Henry Hub futures contract, traded at $3.25 per million British thermal units (MMBtu) on 10 June. This compared favorably to the Title Transfer Facility price in Europe of $7.80/MMBtu and the Japan Korea Marker for Asian spot LNG at $9.50/MMBtu. The price differential, alongside security of supply, made U.S. cargoes the clear choice for Indian buyers.
The primary beneficiaries are U.S. LNG exporters with significant uncontracted volumes and flexible destination clauses. Cheniere Energy (LNG) is the largest pure-play, while Venture Global LNG is a key private player. Integrated majors like ExxonMobil (XOM) and Chevron (CVX) also capture significant value from their LNG portfolios. Analysts at Fazen Markets estimate this new, stable demand could add $2-4 per share to Cheniere’s 2026 earnings estimates, contingent on sustained volumes.
The losers are traditional Gulf suppliers. QatarEnergy’s dominant market position faces erosion, though its low-cost production base provides a buffer. UAE’s ADNOC and Saudi Arabia’s Aramco face reduced spot market opportunities and may see their long-term contract negotiations with India face tougher pricing pressure.
A key limitation to this bullish thesis is U.S. export capacity. The current U.S. operational LNG export capacity is 13.9 bcfd, with an additional 3.5 bcfd under construction. If the Gulf disruption persists beyond 12-18 months, capacity constraints could tighten the global market and push U.S. prices higher, eroding the current competitive advantage.
Positioning data shows commodity trading advisers and macro hedge funds have built sizable long positions in Henry Hub futures. Physical traders report strong buying interest for U.S. LNG cargoes from Asian utilities beyond India, anticipating a prolonged rerouting of trade flows.
Market participants should monitor three immediate catalysts. The U.S. Department of Energy’s next LNG export license approvals are due in late July 2026. Any delays for projects like Commonwealth LNG or Port Arthur Phase II would signal regulatory headwinds.
India’s quarterly trade data, released in late July, will confirm whether the Q1 trend is accelerating or stabilizing. The Henry Hub futures curve, particularly the Winter 2026/27 strip currently at $3.85/MMBtu, will be a barometer of expected demand strength.
Key technical levels include the $3.00/MMBtu support for Henry Hub, which represents the marginal cost of production for many U.S. shale basins. A sustained break above the $3.50 resistance level would signal the market is pricing in more permanent demand growth from Asia.
The immediate impact on U.S. domestic prices has been muted due to strong shale production, keeping Henry Hub anchored near $3.25. The primary effect is on the differential, or basis, between Henry Hub and international benchmarks. A sustained 2 bcfd of incremental demand to India structurally tightens the global LNG balance, supporting higher international prices. This increases the profitability margin for U.S. exporters who buy gas at Henry Hub and sell on international indices.
The 2011 Fukushima disaster provides a key comparable. Japan’s sudden shutdown of nuclear power plants created an urgent demand for 3.2 bcfd of additional LNG imports. This demand was largely met by Qatar on a spot basis, causing a dramatic short-term price spike and accelerating long-term contract signings. The current India-U.S. shift is more structural, driven by geopolitics rather than a single accident, suggesting the new trade route may have greater longevity.
Europe has relied heavily on U.S. LNG since the reduction of Russian pipeline gas in 2022, with the U.S. supplying over 40% of EU imports in 2025. A permanent diversion of significant U.S. volumes to Asia increases competition for Atlantic Basin cargoes. This could force European buyers to pay higher premiums to attract LNG, potentially reigniting inflationary pressures on the continent's industrial sector and complicating the ECB's policy path.
Geopolitical conflict has forged a durable new energy corridor, locking in U.S. LNG as India's primary supply source for the foreseeable future.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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