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India Summer Nights Hit by Iran War Gas Cuts

Bloomberg Markets •
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India faces sweltering summer nights as Middle East conflict disrupts natural gas supplies, threatening electricity generation for cooling homes. The nation's gas-fired fleet, though small, plays a crucial role meeting evening demand when solar power isn't available. With temperatures expected to rise above normal, the power grid faces increased pressure during peak consumption hours.

Middle East tensions following US and Israeli attacks on Iran have cut off liquefied natural gas flows, driving up prices for India's major LNG imports. Disruptions have already affected industries including fertilizer makers and oil refiners. Tata Power projects power demand could reach 270 gigawatts this summer, surpassing the 2024 record of 250 gigawatts, as temperatures begin rising in March rather than April.

India's grid operator previously required 13 gigawatts of gas power to meet evening demand, but curtailed LNG supplies could reduce this to just 3.25 gigawatts. The highest overnight demand peak recorded was 237 gigawatts, leaving utilities with little respite as temperatures soar. While alternative suppliers like the US could fill the gap, higher costs may force importers to cut industrial supply rather than absorb expensive gas.