Force Majeure in International Energy Contracts
Force majeure ("superior force") is a contractual clause that excuses a party from fulfilling its contractual obligations due to extraordinary events or circumstances beyond its control — such as wars, natural disasters, or government actions. In LNG supply agreements, force majeure declarations by suppliers can legally suspend delivery obligations without constituting a breach of contract.
- Force majeure clauses are standard in long-term LNG and oil supply agreements
- For buyers like Petronet, a force majeure declaration means alternative spot market procurement is required — typically at higher cost
- Spot LNG price in March 2026: ~$25/MMBTU vs ~$12–13/MMBTU for term contracts
- Contract disputes over force majeure validity can go to international arbitration (typically under ICC or LCIA rules)
- India's domestic gas prices are regulated partly via the Administered Pricing Mechanism (APM) — import price spikes feed through to downstream consumers and industries
● Tracked since March 03, 2026 · last seen May 05, 2026 · updates as the daily brief publishes
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