New Delhi, Sep 7: India’s oil and gas industry is coming under pressure as higher LNG and crude oil prices raise operating costs for companies and businesses that depend on imported energy. The situation has become more challenging because global energy supplies remain vulnerable to disruptions in the Middle East.
According to the report, LNG imports made up around 59 per cent of India’s total gas consumption in July 2026, the highest level since July 2021. The share has increased from 44 per cent in April, while domestic gas production has remained largely flat. This has left India more exposed to changes in international LNG prices.
The recent rise in energy prices is largely linked to continuing tensions around the Strait of Hormuz, a key route for global oil and gas shipments. Reduced shipping activity through the waterway has raised concerns about supplies reaching major Asian markets, including India. Asian spot LNG prices have climbed sharply as a result.
For Indian companies, the impact is being felt through higher input costs. Businesses that use natural gas for manufacturing, power generation, fertilisers and other industrial activities may face higher expenses if LNG prices remain elevated.
The pressure is particularly important because LNG demand in India has remained strong even when international prices have risen. Companies cannot always switch to other fuels quickly, which means higher gas costs can directly affect their margins.
Crude oil prices are adding to the pressure. Brent crude rose to around $97.50 a barrel on September 7 as fresh US-Iran tensions increased concerns over oil supplies and shipping through the Strait of Hormuz. The waterway normally carries a significant portion of the world’s oil trade.
Higher crude and LNG prices could also increase India’s energy import bill. For businesses, expensive fuel can raise transportation, manufacturing and production costs, while companies may have to decide whether to absorb the increase or pass some of it on to customers.
The pressure may continue if geopolitical tensions remain unresolved and shipping routes face further disruption. At the same time, India’s growing LNG requirement means the country will need to balance rising demand with the cost of imported gas.
The situation also highlights the need to increase domestic gas production, diversify energy supplies and expand alternative sources of energy. For the oil and gas industry, the immediate challenge is to manage rising costs while keeping supplies stable and protecting business margins.