Economics trumps politics: India’s US oil, LNG imports slump sharply
Shipments of crude oil from the US to India dropped by an average of 40 per cent in August and September—coinciding with US President Donald Trump ratcheting up pressure on India—from July levels. Senior industry officials told Business Standard that when it comes to oil and gas, “economics trumps politics”. Imports of LNG from the US declined by 41 per cent last month from a year earlier and by 23 per cent month-on-month. Deliveries of US crude oil in August and September averaged 220,000 barrels per day compared to 364,000 bpd in July, according to data from maritime intelligence agency Kpler. Imports in September were 30,000 bpd lower year-on-year and 23,000 bpd lower month-on-month. US supplies are contracted 45–60 days in advance, which means July is typically contracted in May/June and August/September arrivals are ordered in July/August. Trump announced plans for secondary tariffs on India in July. LNG shipments from the US to India shrank to 0.27 million tonnes last month from 0.46 million tonnes a year earlier and 0.35 million tonnes in August, the data showed. Nine months into 2025, US purchases at 2 million tonnes this year are well below the 5 million tonnes imported in 2024. State-run distributor GAIL, the biggest purchaser of US LNG, which had signed term contracts for a little less than 6 million tonnes a year a decade ago, has found it more profitable to swap its US cargoes than bring them to India, an industry official said.
India’s oil market splits as state refiners cut Russian crude & private players ramp up buys
India’s oil market is split, with state-run refiners retreating from Russian crude amid US pressure and narrowing discounts while private refiners are stepping up sourcing State-run refiners cut Russian crude purchases in September, signalling caution. Their imports averaged 605,000 barrels per day (bpd) — 32% below their April-August average, 22% lower than in August, and 45% below June levels, according to Kpler, a global real-time data and analytics provider. Private refiners lifted 979,000 bpd of Russian oil, 4% above their April-August average, 8% higher than in August, and nearly unchanged from June. Russian crude accounted for just one in five barrels imported by state-run firms in September, and two in three barrels procured by local private refiners. Industry executives cited a mix of factors: rising risks around Russian volumes amid heightened US pressure to curb imports, narrowing discounts, and the need for state companies to diversify supply. With their larger responsibility toward the domestic market, state firms prioritise security over price, they said. Private companies, which hold only about 10% of the local retail market, toggle between domestic and export sales to chase profit, they added.
India’s gas story losing steam? Why high LNG prices are a worry for Gujarat Gas, IGL, MGL — but boosting GAIL
India’s gas market is showing signs of strain, and the latest note from brokerage group JM Financial makes it clear why. Demand has flattened, domestic output is slipping, and expensive LNG in Asia is hurting the very companies expected to expand gas consumption. A recent report by JM Financial highlighted how elevated spot prices are changing margins across city gas distributors, transmission firms, and importers, while only those with Henry Hub-linked contracts are finding some breathing room Henry Hub is the US reference point for natural gas prices. When LNG is sold from America, the price is often linked to Henry Hub. As per the report, US Henry Hub prices have stayed around $3–3.5/mmbtu, far below Asian spot LNG at $11–13/mmbtu. This gap makes Henry Hub-linked cargoes significantly cheaper on a delivered basis, which explains why GAIL, with its US-linked contracts, is better placed than city gas distributors that rely more on spot LNG. At the most basic level total gas demand in August 2025 stood at roughly 190 mmscmd, a drop of about 1.2% from a year earlier. The Jul–Aug average for FY26 to date was only marginally higher at 192 mmscmd, down 1.0% YoY. Domestic consumption slipped further about 92 mmscmd in the first two months of the quarter, falling 4.7% YoY while LNG deliveries accounted for nearly 99 mmscmd in August. The numbers show a market not in expansion but in a cautious holding pattern, the report revealed. Demand and supply dynamics The report’s demand and supply data point to a market stuck in place. Demand is hovering near 190–192 mmscmd, domestic production keeps sliding lower, and LNG imports are not picking up because high spot prices make them unattractive. To put it simply, India’s gas story is stagnating under the twin weight of expensive imports and weaker local output. Costs and pricing gaps Costs is at the heart of the stress. Asian spot LNG is trading around $11–13/mmbtu, far above the long-term norm tied to crude. The comparison with other benchmarks is stark: US Henry Hub-linked cargoes land at a much cheaper rate, while crude-linked contracts sit somewhere in between. This pricing spread is crucial; it explains why companies tied heavily to spot supply are losing ground, while those with Henry Hub-linked volumes, such as GAIL, are benefiting from lower landed costs, the report added Global supply outlook Another important set of numbers in the report highlights global capacity additions. Nearly 210 mmtpa of new LNG liquefaction capacity is expected to come online from 2026 onward, led by projects in the US, Qatar, Russia and Canada. The implication is clear: if these projects materialise on time, spot prices could ease and demand may recover. Until then, India’s buyers will continue to pay more for their cargoes. JM Financial on Indian gas market: Spotlight on key companies Gujarat Gas: The report calls Gujarat Gas vulnerable. Roughly 20–30% of its volumes come from spot LNG, which means when spot is high the company has little choice but to absorb the cost. For a distributor serving price-sensitive industries, that is a serious disadvantage. Gujarat Gas is effectively paying more for gas that competitors in other fuels can undercut. Indraprastha Gas (IGL): Indraprastha Gas faces another problem i.e reduced allocation of cheaper APM gas. As the JM Financial report, less APM means IGL has to buy more expensive market-priced volumes to keep CNG pumps running. The economics of CNG, which drive much of its business, weaken as a result Mahanagar Gas (MGL): Mahanagar Gas is in the same boat as IGL. Allocation changes force it toward higher-priced volumes. For a city gas distributor whose bread and butter is CNG and household PNG, sustained high spot LNG is a direct hit on margins, the JM Financial report added. GAIL: GAIL, by contrast, stands out in the report as more resilient. Its Henry Hub-linked LNG contracts are proving profitable at current spreads. The company’s portfolio and trading flexibility allow it to capture gains that others cannot. The caveat is clear though if Henry Hub rises sharply, the advantage could vanish. The report cited nearly 210 mmtpa of new LNG liquefaction capacity expected from 2026 onwards, with major projects in the US, Qatar, Russia and Canada. The bars rise steeply after 2026. This is the hope that more supply could drag spot prices back toward historical norms. But until those projects come online, India remains exposed to costly cargoes. Petronet LNG: Petronet LNG appears in the note as the key regasification player. Its long-term RasGas contract, priced off crude, offers a different cost profile than spot cargoes. But when overall demand is weak, terminal utilisation drops. The JM Financial report notes a decline in regas use during this high-spot period, which caps revenue for Petronet despite its contract base. Gujarat State Petronet (GSPL): For GSPL, the issue is transmission volumes. Lower LNG demand and weaker industrial uptake mean less gas flowing through pipelines. While fixed fees provide some stability, variable throughput-linked income takes a hit, the report added. JM Financial on Indian gas market: Risks and signals: The report identified clear risks. Execution delays in the global capacity buildout could prolong high spot prices. European storage dynamics and geopolitical shifts add uncertainty. On the domestic side, further slippage in production would increase import dependence. Investors, the report suggests, should keep an eye on JKM levels, Henry Hub, India’s monthly output data, regas utilisation, and APM allocation decisions. Each will decide whether margins worsen or improve in the months ahead.
PNGRB report maps step-wise hydrogen blending: 2% safe, 20% only with new infra
India’s petroleum and gas regulator has drawn up a roadmap for phased hydrogen blending in natural gas pipelines, setting safe thresholds, and benchmarking global pilot projects as reference models for domestic rollouts. According to a report prepared jointly by the Petroleum and Natural Gas Regulatory Board’s (PNGRB’s) Hydrogen Cell and ICF Consulting India, hydrogen blending of up to 2 per cent can be introduced without requiring changes in appliances and is safe in all networks. It said that blending in the range of 2–5 per cent is suitable for early-phase pilots provided continuous monitoring is in place. For 5–10 per cent blends, operators would need pre-approved materials and leak detection systems. The report added that blending of 10–20 per cent hydrogen would require certified appliances, standard operating procedures, and structured risk mitigation protocols. “Above 20 per cent is only feasible in new networks or after infrastructure adaptation,” the document stated. Blending criteria highlighted in the report include pipeline material compatibility, age and condition of networks, sensitivity of end-users such as hospitals and food processing units, and geographical differences between urban and rural networks