ATGL Share Price Up 19% as US-Iran War Raises Gas Supply Concerns

The share price of Adani Total Gas Limited (ATGL) skyrocketed this week amid the ongoing conflict between US and Iran. 

ATGL is engaged in City Gas Distribution (CGD) business and supplies natural gas for domestic, commercial, industrial and vehicle use. 

On Wednesday, the stock’s price soared to ₹562.30 up by over 19% from the previous closing price of ₹472.45. ATGL also saw gains of nearly 16% over the past five trading days.

US-Iran War Impact on India’s Energy Market

The company’s stock surged as the war between Iran and the Israel-US alliance started to impact the energy market in India. The nation is the world’s third largest oil consumer and remains heavily dependent on imported supplies to meet domestic demand.

The conflict disrupted shipments in the Strait of Hormuz, one of the most critical energy shipping routes in the world, as Iranian forces blocked the narrow waterway and threatened to burn passing vessels. Around 30% of India’s natural gas requirements pass through this route.

Priority Allocations for Key Sectors

As the war-linked supply disruptions push up gas prices globally, India moved to safeguard the availability of domestic gas by invoking emergency powers. 

The government directed that key sectors will be given priority supply allocations such as piped natural gas (PNG) for households and compressed natural gas (CNG) for transport. 

Shortage of Supplies and Higher Prices for Industrial Clients

The government’s decision to prioritize critical sectors in gas allocations raised concerns of supply shortage for industrial uses. Adani Total Gas already increased the prices of supplies for industrial clients citing that the conflict in the Middle East lowered the availability of gas. 

“Due to recent geo-political developments impacting LNG supply routes, ATGL has received upstream gas curtailment, leading to operational constraints,” the natural gas distribution company said, according to The Economic Times.