How India uses underground caves to store crude oil for crisis
It is feared that Iran might attempt to disrupt the Strait of Hormuz amid the ongoing conflict with Israel and the US. This could result in supply shortages and a surge in oil prices, and impact India, the world’s top crude importer, like other buyers. Amid fears of a wider conflict following Israeli and US strikes on Iran, gas and crude prices have already soared. However, India is not exactly losing sleep over the fluctuations. As Petroleum and Natural Gas Minister Hardeep Singh Puri noted, India’s diversified crude supply sources and the fact that a significant portion does not pass through the Strait of Hormuz offer a level of cushion. What Puri didn’t refer to is that India’s comfort is further bolstered by its strategic crude oil reserves, stored in underground rock caverns at three key locations. India maintains several million metric tonnes of crude oil as part of its Strategic Petroleum Reserves (SPR) in rock caves or caverns in Andhra Pradesh, Karnataka, and Tamil Nadu.
GAIL to invest ₹8.44 billion in expanding gas pipeline capacity
State-owned gas utility GAIL (India) Ltd on Monday said it will invest ₹8.44 billion in expanding Dahej-Uran-Dabhol-Panvel natural gas pipeline capacity to meet increased energy demand. The DUPL-DPPL network, the name Dahej-Uran-Dabhol-Panvel natural gas pipeline network is referred to, currently has 19.9 million standard cubic metres per day capacity. This is being expanded to 22.5 mmscmd, GAIL said in a stock exchange filing. GAIL said the pipeline capacity will be added in three years. “Investment required (is) ₹8.44 billion,” it said. “It was approved by the Board of Directors of the company in its meeting held today i.e. June 23”. GAIL also said it has pushed back the completion scheme of its 1,702 km Mumbai-Nagpur-Jharsuguda pipeline projectfrom June 30, 2025 to September 30, 2025.
India’s ethanol blending push faces US trade pressure
India’s ethanol blending programme—once held up as a model of clean energy transition—is now facing a complex web of domestic bottlenecks and international pressure. After achieving the 20% blending target ahead of the March 2025 deadline, policymakers were expected to raise the bar to 30% by 2030. But those ambitions are now under threat, not just from production constraints, but from Washington’s insistence that India open its market to US ethanol imports as part of an ongoing bilateral trade agreement. The Indian government finds itself caught in a policy dilemma. Yield to American demands, and the goal of self-reliance in sustainable fuels is jeopardised. Resist, and it risks derailing the broader trade deal, including the long-anticipated bilateral trade agreement (BTA). Ethanol as a strategic lever Ethanol blending has become a key pillar of India’s energy security strategy. By mixing ethanol—produced from sugarcane, maize, and other agricultural feedstocks—with petrol, India has managed to reduce crude oil imports and cut its fuel bill. Over the past decade, this shift has saved the country over Rs 1.2 trillion in foreign exchange and substituted nearly 19.3 million metric tonnes of oil. But ethanol is not just about energy economics. It also plays into rural prosperity, generating demand for agricultural produce, creating jobs in the hinterland, and aligning with India’s Paris Agreement climate goals. Like Brazil, which successfully scaled ethanol blending to 30% and beyond, India is eyeing higher ratios like E27 and even E100. American shadow on ethanol ambitions The US push to export cheaper, corn-based ethanol to India has alarmed domestic producers. Indian farmers—particularly in Maharashtra, Uttar Pradesh, and Karnataka—have invested heavily in cultivating sugarcane and maize to supply distilleries. Opening the market to imports risks undercutting local prices, undermining both farmer incomes and ethanol viability. Senior government officials have questioned the logic of compromising fuel sovereignty to appease an external partner. The concern is not only economic but strategic: energy self-sufficiency is critical for national resilience. Capacity constraints and economic viability Even without US imports, India’s ethanol supply chain is under stress. The current production capacity of 17 billion litres is expected to be maxed out by 2026 due to rising industrial and potable alcohol demand. To sustain E20 blending and aim for E30 by 2030–31, the Indian Sugar Manufacturers Association (ISMA) estimates that an additional 4.75 billion litres will be needed—along with Rs 220 billion in fresh investments. But investor appetite is waning. Shrinking margins—from 12–13% a few years ago to just 1–2% today—are discouraging expansion. Rising feedstock prices and stagnant ethanol procurement rates since 2022–23 have squeezed profitability. Triveni Engineering & Industries, a major player in sugar and ethanol, recently scrapped its proposed distillery in Nangal due to poor returns. Others are equally cautious.
GAIL Ranchi commenced offtake of Coal Bed Methane in Jharkhand
Indian state-owned energy corporation, GAIL’s City Gas Distribution Ranchi, has commenced the offtake of Coal Bed Methane (CBM) from the North Karanpura CBM Block in Jharkhand, marking a major milestone in harnessing indigenous energy resources. This development reinforces our commitment to enhancing local energy security while supporting the Government of India’s vision of promoting clean, sustainable, and alternative fuel sources. The inaugural LCV, transporting approximately 2000 SCM of CBM, was ceremonially flagged off by Mr. Prashant K Singh, DGM (CGD), Mr. Vikas Anand, CM (CGD),Mr. Saurav Anand, SM (F&S), along with officials from ONGCL, PEL, and IOCL. This initiative not only expands access to cleaner fuels but also contributes to emission reduction and fosters economic growth in the region.
BofA: The Saudis Are Readying for a Long Oil Price War
Saudi Arabia is getting ready to engage in a protracted oil price war with its rivals, Bank of America’s leading commodities expert told Bloomberg on Monday. According to Francisco Blanch, BofA’s head of commodities research, the unfolding oil price war is going to be “long and shallow”, rather than “short and steep” as the Kingdom tries to claw back lost market share, especially from U.S. shale producers. Last month, OPEC+ announced a third output increase of 411,000 b/d for the month of July, a similar clip to the previous two months. Commodity experts began warning last year that Saudi Arabia was willing to ditch its traditional role as OPEC’s swing producer by abandoning its unofficial price target of $100 a barrel in favor of increased output. Saudi Arabia accounted for 2 mb/d of the group’s 3.15 mb/d in output cuts before it started unwinding in April. Traders are now bracing for hard times, with oil futures traders betting that the ongoing unwinding of production cuts by OPEC+ will eventually lead to a supply glut and even lower oil prices. According to the latest Commitment Of Traders (COT) report by CME Group, open interest in calendar spread options hit record levels in the current week, with speculators holding the biggest net position bets on weaker U.S. crude futures curve since 2020. Oil futures charts are flashing an unusual “hockey-stick” shape of the curve, with oil markets pricing tight supply through 2025, followed by an oversupply in 2026, according to the report. The spread between the WTI July contract and the August contract narrowed 3 cents on June 5 to $0.93 a barrel, while the spread between the December 2025 contract and the December 2026 contract widened by 10 cents to $0.53. “There is a lot of risk in the trade,” Nicky Ferguson, head of analytics at Energy Aspects Ltd, told Yahoo Finance, adding that rising activity is being driven by “strong prompt, weak deferred balances, and a very changeable geopolitical environment that makes holding futures difficult.” This is hardly the first time that Saudi Arabia is engaging in a race to the bottom with its rivals. The kingdom has undertaken a similar strategy at least twice over the past decade, with varying degrees of success. U.S. shale producers successfully weathered the 2015 oil price war by rapidly reorganizing into a meaner and leaner production machine that could breakeven at WTI price of as low as $35 per barrel, down from $70 per barrel just a few years earlier. Five years later, the U.S. Shale Patch required the direct intervention of then U.S. President Donald Trump, whose threats of withdrawing military support for Saudi Arabia persuaded de facto Saudi ruler Crown Prince Mohammed bin Salman to toe the line and abandon the oil price war. Unfortunately, U.S. shale producers are more vulnerable this time around: a March Dallas Fed Energy Survey found that the U.S. Shale Patch requires WTI prices of $65 per barrel or more to drill profitably. U.S. rig counts have declined 4% Y/Y and are now 7% below the 5-year average as producers scale back drilling activity amid rising costs. Tariffs on U.S. steel imports are partly to blame here, increasing the price of fracking equipment. Meanwhile, geological constraints are also posing a significant obstacle to efforts to ramp up production as the nearly two-decades-old U.S. shale boom plateaus. The EIA has predicted a small increase in U.S. crude output to 14 million barrels per day in 2027, up from 13.2 million barrels in 2024. That said, Saudi Arabia and OPEC+ do not have carte blanche to continue flooding the markets with oil: the Kingdom needs Brent price of at least $96.20 per barrel to balance its books in fiscal year 2025, approximately $30 per barrel higher than current Brent price. Further, the country drew down considerably on its foreign exchange reserves in past oil price wars, limiting its ability to sustain another long war now. However, Saudi Arabia is likely to gain more leverage in future showdowns as it continues to diversify its economy. The country is accelerating its $2.5 trillion mining plans, while also investing in technologies to optimize oil production and lower carbon emissions. Saudi Arabia’s mineral reserve potential has grown dramatically over the past decade, from $1.3 trillion forecasted eight years ago to $2.5 trillion currently. The Kingdom has set a goal to rapidly grow the mining sector, with its contribution to the economy expected to jump from $17 billion to $75 billion by 2035.
Oil Prices Slip Despite U.S.-China Talks
Crude oil prices moved lower earlier today even after the latest round of talks between the United States and China on trade yielded positive results, as traders adopted a wary stance on the news. At the time of writing, Brent crude was trading at $66.82 per barrel and West Texas Intermediate was changing hands for $65 per barrel, after U.S. and Chinese government officials said they had agreed on easing export restrictions and devising a framework for the resolution of their trade conflict. “We have reached a framework to implement the Geneva consensus and the call between the two presidents,” U.S. Commerce Secretary Howard Lutnick said, as quoted by Reuters. “The idea is we’re going to go back and speak to President Trump and make sure he approves it. They’re going to go back and speak to President Xi and make sure he approves it, and if that is approved, we will then implement the framework.” It was perhaps the fact that the two presidents had yet to sign off on the framework that kept oil traders wary, even though oil prices are trending higher than last week. “In terms of what it means for crude oil, I think it removes some downside risks, particularly to the Chinese economy and steadies the ship for the U.S. economy – both of which should be supportive for crude oil demand and the price,” IG analyst Tony Sycamore told Reuters. Meanwhile, the European Union said it was discussing a ban on the currently non-operating Nord Stream pipeline and a lower price cap on Russian crude as part of its next package of sanctions against Moscow—the 18th in a row. In potentially bearish news for oil, the World Bank lowered its global growth forecast for the year to 2.3% from 2.7%, saying the global economy is set for its weakest year since 2008.
Alaska LNG promises gas cheaper to Asia and Europe than on the American stock exchange
The multibillion-dollar LNG project in Alaska is trying to attract investors and declares that the cost of gas will be lower than on the American Henry Hub exchange. Until recently, investors were in no hurry to visit Alaska, but Donald Trump’s threats to impose import duties forced companies in major Asian countries to reconsider their attitude. The American Glenfarne Alaska LNG, which is the main shareholder of Alaska LNG, announced the completion of the first round of the strategic partner selection process, which was attended by more than 50 companies from the USA, Japan, South Korea, Taiwan, Thailand, India and the European Union. “These potential partners have officially expressed interest in a contract value of more than $115 billion for various partnerships, including the supply of equipment and materials, services, investments and client agreements,” Glenfarne Alaska LNG reports. The company did not specify what amounts were offered as investments or for LNG purchases. At the same time, they noted that Alaska LNG’s economic performance allows it to supply LNG to Asia at prices that are lower than prices on the American Henry Hub exchange. Traditional contracts for the supply of American LNG assume that the cost of LNG is based on the following formula: the price of gas at Henry Hub plus 10-15% and the cost of liquefaction. Alaska LNG expects to produce 20 million tons of LNG (about 28 billion cubic meters of gas) per year. At the same time, to implement the project, it is necessary to build not only a terminal, but also an 800-mile gas pipeline, which increases the cost of the project to $ 40 billion. Until recently, investors and consumers were not particularly interested in the project and it did not have a single agreement. The situation changed after Donald Trump occupied the White House and unleashed a trade war. Due to the threat of import duties, many Asian countries have changed their attitude to the project.
Asian LNG spot market prices dip amid weak demand and high inventories
Prices on the Asian LNG spot market slid for the first time in five weeks, Reuters reported on June 6. Weak demand in the region saw the average LNG price for July delivery fall to $12.30 per million British thermal units (mmBtu). It marks a slight dip from $12.40/mmBtu a week earlier High inventory levels, especially in Japan, which is the world’s second-biggest importer of LNG, have depressed prices. According to Japanese government data cited by Argus, the country’s utilities have higher stock levels compared to the same time in 2024. Japan’s LNG stocks at its utilities are 1.3% higher than the volume at this time last year and 7.6% higher than the average for the end June for 2020-2024. And while temperatures are expected to climb higher than seasonal averages in the weeks ahead in Japan and South Korea, the high inventory levels are expected to keep demand weak on the spot market. Indeed, demand for LNG from the spot market has been low in northeast Asia, but it has also been weak in southeast Asia. The arrival of monsoon season in India has reduced power demand in India. Moreover, rough seas in the Bay of Bengal have also disrupted LNG operations in Bangladesh, with at least two tankers halting ship-to-ship fuel transfers off Moheshkhali Island amid stormy monsoon conditions. If conditions worsen, LNG tankers and floating storage regasification units (FSRUs) may be required to be moved to safer locations in deeper waters, which would affect Bangladesh’s LNG imports.
India targets 1,000 hydrogen-powered buses and trucks by 2030
The Indian government has announced plans to deploy at least 1,000 hydrogen-powered trucks and buses by 2030. The government has identified hydrogen as a more practical solution for long-distance freight trucks, offering key advantages over battery-electric alternatives, especially in terms of preserving cargo space and enabling faster refuelling. Abhay Bakre, Mission Director of India’s National Green Hydrogen Mission (NGHM), reportedly outlined at an event that up to 50 hydrogen-powered trucks and buses will be operating this year. Bakre added, “I hope by 2030, more than 1,000 trucks or buses will be plying and used commercially in the country. That is what we are expecting.”
India’s Oil & Gas Sector Poised For Steady Growth Through FY26-27 Despite Market Volatility: Research
India’s oil and gas sector is projected to maintain robust growth through FY26 and FY27, despite recent market turbulence, according to a research note by Systematix Institutional Equities. The brokerage expects that India’s oil and gas companies are likely to post average sales growth of 6 per cent in FY26 and 7.8 per cent in FY27, with ebitda rising by 12.9 per cent and 9 per cent, and Pat increasing by 13.3 per cent and 10.1 per cent year-on-year, respectively. Top investment picks include Reliance Industries (RIL), GAIL India (GAIL), Mahanagar Gas (MGL) and Gulf Oil Lubricants India (GOLI). The oil market witnessed high volatility in May 2025. Brent crude prices dropped 22.9 per cent year-on-year and 3.8 per cent month-on-month, driven by higher Opec output from Saudi Arabia and the UAE. This decline in prices also led to a fall in US rig counts, indicating caution in upstream investment. However, refining margins rebounded sharply, with the benchmark Gross Refining Margin (GRM) increasing 85 per cent month-on-month and 121 per cent year-on-year to USD 6.4 per barrel. The surge was attributed to lower crude costs and stronger cracks in gasoline, gasoil, jet fuel, kerosene, and naphtha. Natural gas markets showed divergent trends. While US Henry Hub prices dropped 31.8 per cent since January 2025 due to oversupply and mild weather, Asian spot LNG (Japan Korea Marker) rose 6.7 per cent year-on-year to USD 11.9/mmbtu, buoyed by regional demand. In the final quarter of FY25, the oil and gas sector saw flat year-on-year earnings but sequential improvement, especially among gas and City Gas Distribution (CGD) companies. While EBITDA per standard cubic metre (scm) declined on a yearly basis, it recovered sequentially, supported by price increases and favourable gas sourcing.