Oil and gas major Petronet LNG's stock experienced significant decline, slumping as low as 4.40% on the NSE following concerns over potential supply disruptions. According to reports from NDTV Profit, the shares later pared some losses to trade 3.70% lower at ₹269.30 as of 3:12 p.m. The sharp decline reflects investor concerns about potential supply chain disruptions in the liquefied natural gas sector, with the stock experiencing sharp selling pressure after reports of QatarEnergy's force majeure extension. The broader market sentiment was also impacted, with Nifty 50 falling 0.59% to 23,853 and Sensex losing 0.57% to 76,783 as of 1:40 pm on July 22, as reported by NDTV Profit.
The market decline was triggered by reports that QatarEnergy is preparing to extend force majeure on liquefied natural gas shipments until mid-October. As reported by NDTV Profit, force majeure refers to a contractual condition that allows one or both parties to temporarily cancel or delay a contract when extraordinary events beyond their control keep them from fulfilling the contract. This potential disruption has raised concerns about the reliability of LNG supply chains and their impact on Petronet LNG's operations, with investors particularly worried about the company's role as India's largest LNG importer. The latest escalation has heightened concerns over global energy supplies, with the Red Sea's Bab el-Mandeb Strait emerging as another potential maritime chokepoint after Iran's closure of the Strait of Hormuz.
The oil market is experiencing significant volatility with Brent crude surging 3.8% on Thursday to nearly $98 per barrel, extending its gains since July 10 to around 30%. According to NDTV Profit, this surge comes amid fears that disruption to global oil supplies could spread beyond the Strait of Hormuz. The latest escalation came after the Iran-backed Houthis claimed responsibility for attacks on two commercial oil tankers in the Red Sea, opening a new front in the ongoing US-Iran conflict. Saudi Arabia confirmed that one refined-products tanker, Encelia, was attacked, while the British navy reported that a tanker was struck near the Saudi town of Al Shuqaiq. The attacks came as the US carried out a 12th straight day of airstrikes on Iranian military targets, while Iran responded by targeting US bases in Kuwait and Jordan. Brent crude climbed to its highest level in months on Thursday, advancing 4.9% to $98.61 a barrel, as mounting tensions in the Red Sea and an unresolved standoff around the Strait of Hormuz and now Bab-el Mandeb revived concerns over potential disruptions to global oil supplies.
The stock's performance reflects investor concerns about potential supply chain disruptions in the liquefied natural gas sector. According to NDTV Profit, the shares initially declined significantly before recovering partially, indicating that while the force majeure concerns remain, the market is showing some resilience. However, market participants are worried that if longer-term supply uncertainty continues to linger, there could be increased LNG procurement costs and volatility in energy markets. The company's capacity to find alternative LNG suppliers, control procurement costs, and ensure uninterrupted deliveries will be key parameters influencing market sentiment in the coming weeks. The broader market sell-off was also influenced by concerns over elevated artificial intelligence spending, with Alphabet shares declining 3% in after-hours trading after the Google parent raised its 2026 capital expenditure guidance to as much as $205 billion, reinforcing its aggressive AI investment plans.
