THE COMPASS Uncertainties cloud prospects of gas sector

The oil and gas sector is suffering from geopolitical turmoil.

- DEVANGSHU DATTA

While crude prices are low, rupee weakness is offsetting the benefits to an extent and refining margins have normalised as more global capacity has come on-stream, limiting earnings upside.Henry Hub (HH) gas prices are up sharply by over 50 per cent year-on-year (Yo-Y) in the third quarter of financial year 2026 (Q3FY26). HH has moderated recently to $3.2 per barrel (after rising to $4.5 per barrel in Nov-Dec’25) on good supply and weak heating demand in the US. By the end of Sep’27, the European Commission plans to fully phase out EU's imports of all Russian gas and LNG, with Russian LNG imports to end by Dec 26,

The Venezuela situation and political turmoil in Iran could add elements of unpredictability to the situation along with threats of US tariffs.

Low crude oil price allows oil marketing companies (OMCs) to report better marketing margins and LPG under-recovery has declined sharply from over ₹100 per cylinder to ₹30-50 per cylinder in Q3FY26. But, there are fears of adverse excise hikes.