Petronet LNG stock hits 10% lower circuit as Middle East tensions trigger force majeure warning

Shares of Petronet LNG came under sharp selling pressure in trade on March 4, hitting the 10% lower circuit at ₹277.80, down ₹30.85 from the previous close, after the company informed exchanges about potential supply disruptions linked to escalating geopolitical tensions in the Middle East.

In an exchange filing dated March 3, the company said that due to the recent and ongoing conflict involving Iran and Israel, vessels are currently unable to safely transit through the Strait of Hormuz to reach Ras Laffan, the loading port of QatarEnergy.

Petronet LNG said that considering the prevailing security situation and the maritime risks, it has issued a force majeure notice to QatarEnergy for its LNG tankers Disha, Raahi, and Aseem. QatarEnergy, which is the company’s LNG supplier, has also issued a notice indicating a potential force majeure event due to the hostilities in the region.

Following this development, Petronet LNG has issued corresponding force majeure notices to its offtakers, including GAIL, IOL, BPCL under the relevant gas sale and purchase agreements.

The company added that acts of war are excluded under the business interruption insurance covers taken by Petronet LNG, and therefore the potential financial impact of the ongoing force majeure event cannot be estimated at this stage. It said it continues to closely monitor developments and will inform exchanges of any material updates.

Brokerage Citi has also flagged risks to India’s gas value chain amid the situation. According to the brokerage, Qatar has supplied around 40–50% of India’s LNG imports in recent years, making the country highly dependent on supplies from the region.

Citi noted that replacing these volumes could be difficult in the near term, particularly as global LNG prices have already surged, which may impact gas availability and pricing across the domestic market.

The brokerage highlighted that Petronet LNG could face elevated volume risks, as Qatar LNG accounts for roughly 50% of its volumes. A prolonged disruption in supplies could therefore impact the company’s throughput and trading volumes.

The sharp decline in the stock reflects investor concerns over the potential supply disruption and its implications for India’s LNG-dependent gas ecosystem, particularly if tensions in the Middle East continue to affect shipping routes through the Strait of Hormuz.