Indian law firms are experiencing a significant surge in queries from companies seeking clarity on force majeure clauses as the Iran-Israel conflict escalates. According to Live Mint, clients are mainly seeking clarity on whether developments in West Asia fall within the scope of force majeure clauses in their contracts, particularly where agreements refer to events such as war, blockades or disruptions to shipping routes. Charanya Lakshmikumaran, executive partner at Laxmikumaran & Sridharan (LKS), noted that the energy sector is reaching out the most, especially companies importing LNG and crude who now face stranded cargoes and unreliable shipping schedules. The shipping and logistics sector is also dealing with mounting delays, higher war-risk premiums and rerouted vessels, while Indian manufacturers, EPC contractors and large import-dependent businesses have begun seeking advice due to rising supply-chain uncertainty. Latest developments show Bosch Home Comfort India has declared force majeure citing disruptions in gas supply caused by the ongoing war in the Middle East, joining a series of similar announcements across the gas supply chain.
Gas stocks experienced a dramatic turnaround as the Iran-Israel conflict escalated, with Petronet LNG shares rising more than 10% after the company announced that the Strait of Hormuz has reopened for regular traffic following the latest wave of Israeli strikes. According to reports from The Economic Times, MGL shares gained nearly 15% while IGL rose over 6%. Adani Total Gas shares surged more than 8% and GAIL jumped over 9%. However, recent market developments show mixed signals, with Moneycontrol reporting that gas-related companies, including Petronet LNG, GAIL (India) and Gujarat State Petronet, fell up to 6% in Monday's trade after QatarEnergy halted production at a key LNG facility. Gujarat Gas shares declined 5.72% while GAIL (India) fell 5.11%, with Moneycontrol noting that Gujarat Gas has declared force majeure and will restrict gas supplies to industries from Thursday. Bosch Home Comfort shares closed at ₹1,331.25 on the BSE, up ₹30 or 2.31% ahead of its force majeure announcement.
India's top gas importer Petronet LNG Ltd issued a force majeure notice on 5 March under its gas sale and purchase agreement, citing constraints faced by certain LNG vessels during transit between India and Qatar. As reported by Live Mint, its vessels were unable to reach the Ras Laffan loading port due to the war. This development highlights the immediate impact of the conflict on India's energy supply chains, with the company facing operational constraints that prevent normal LNG imports from Qatar's largest facility. The force majeure notice represents one of the first concrete examples of companies invoking such clauses in response to the West Asia crisis.
The QatarEnergy declared force majeure to its affected buyers last week after suspending production of LNG and associated products at a key facility. As reported by Moneycontrol, Qatar's Ras Laffan LNG plant, the world's largest LNG facility, appears to have remained largely intact after its unprecedented closure last week. However, any restart and resumption of deliveries could take weeks or even months, according to the country's energy minister to the Financial Times. This development has particularly impacted Gujarat Gas, which supplies gas to domestic and industrial consumers, which has declared force majeure and will restrict gas supplies to industries from Thursday. The facility closure adds to existing supply disruptions from the broader Middle East conflict, with Bahrain's state oil company also declaring force majeure after an attack on the country's only refinery. The situation has intensified with GAIL (India) saying it is assessing curbing gas supplies to customers following the disruption.
The Strait of Hormuz remains effectively shut for regular traffic after several tankers were bombed in the area, as reported by The Economic Times. More than 20% of the world's oil supply passes through this crucial waterway, which connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. Iraq and Kuwait have begun cutting oil output, adding to earlier liquefied natural gas reductions from Qatar as the war blocks shipments from the Middle East. According to CRISIL, most shipping vessels have halted passage through the strait since March 1, 2026, citing heightened risks. India imports about 85% of its crude oil requirement and roughly half of its LNG needs, with around 40-50% of crude oil and 50-60% of LNG shipments passing through the Strait of Hormuz. The latest developments show that while the Strait has reopened, investor sentiment remains cautious about potential future disruptions.
Amid disruptions to imported gas supplies caused by the widening West Asia conflict, the government has revised the priority order for allocating domestically produced natural gas. LPG production, alongside CNG and piped cooking gas, has been placed at the top priority, with requirements of these sectors being fully met first before gas is supplied to other sectors. The fertiliser sector has been placed at the second place, with at least 70% of their past six months' demand being met, while gas supply to tea industries, manufacturing and other industrial consumers will be maintained at 80% of their past six-month average gas consumption subject to operational availability. All city gas distribution (CGD) entities that supply gas to industrial and commercial consumers have been placed at No. 4 on the priority list. Domestic gas production, which meets about half of the country's consumption of 191 million standard cubic meters per day, will be diverted to the priority sectors by curtailing supplies to petrochemical plants, power units and high-priced gas consumers. Natural gas pumped out of the ground or below the seabed is used to generate electricity, produce fertiliser, be turned into CNG to fire automobiles and be piped to households' kitchens for cooking, making it essential for multiple sectors during the current crisis.
