Iran to stop LNG supply if oil crosses $80/barrel

Iran’s National Iranian Gas Export Corporation (NIGEC) has said it will reserve the right to withdraw supply of 2.5 million tonnes of LNG to IOC, GAIL and BPCL, if global crude oil prices cross $80 per barrel. This is the first time that Iran has put such a stiff condition while negotiating LNG supply to Indian oil companies. LNG prices are linked to the global oil price movement in long-term contracts.

Such a clause would be difficult for India to accept as these long-term contracts fuel large projects in vital sectors like power and fertilisers, and it may not be possible to provide back-up at short notice, if supplies are suddenly withdrawn.

The Economic Times