U.S. LNG: Record Exports, Rising Prices, and a Looming Problem
U.S. LNG exports so far this year have smashed yet another record, prices are on the rise without sapping demand, and the outlook remains robust. But there’s a hitch: pipelines. Exports of liquefied natural gas from the United States between January and August this year went up by 22% from the first eight months of 2024, Reuters’ Gavin Maguire reported this week, citing data from Kpler as showing exports reached 69 million tons. This was 12.4 million tons more than U.S. LNG producers exported last year. The report also noted that domestic demand for natural gas increased significantly, notably from corporate and industrial consumers. This has naturally led to higher gas prices at home, although these are still palpably lower than the heights reached in 2022 and 2023. This made no difference to European buyers, however, because total U.S. LNG exports to Europe soared by 61% from a year earlier. The substantial increase was driven by much more depleted gas storage at the end of the latest heating season that required more purchases to refill; lower wind power generation and hydropower output, and, of course, the European Union’s pledge to buy a lot more U.S. energy to try to reduce its trade surplus with the U.S. The cost burden of this increase in LNG imports is yet to make itself known, but in the meantime, it seems Europe will continue buying all the U.S. LNG it can get its hands on, even though prices reached an average of $8.34 per thousand cu ft over the first eight months of the year, Reuters’ Maguire reported. Prices may well continue higher, according to the Energy Information Administration, which cited data centers and LNG exports as drivers of this rise, which it sees as substantial and about to manifest this winter and next year. Normally, the reason for rising prices is an imbalance between supply and demand. Indeed, demand for U.S. natural gas is on a strong upward trajectory both at home and abroad, so the reason for the rising prices must be supply, which has yet to catch up with demand—except supply is smashing records as well. Reuters this week reported, citing LSEG data, that natural gas production in the Lower 48 had gone up to 108.1 billion cu ft daily since the start of August, breaking the record it set in July, at 107.9 billion cu ft. However, demand for this gas is higher, at 111.9 billion cu ft this week, per the LSEG data. This means that supply is, indeed, catching up with demand. At least it should be, but there is a problem. Pipelines. There have been warnings before from industry executives that gas export growth needs new pipelines to help bring the commodity from the field to the LNG trains. The latest to issue those warnings was Cheniere Energy, the U.S. number-one LNG exporter. “It’s not about the availability of gas, it’s about transportation,” Singh said. “How are we actually going to get it there?” Cheniere’s vice president and general manager of the company’s Corpus Christi facility said this week at an industry event. There are about half a dozen new liquefaction facilities currently under construction on the Gulf Coast, but construction of new pipelines is nowhere near a match for this rate of liquefaction capacity growth, as suggested by Cheniere’s Singh. “It’ll be fascinating to see, depending on where these facilities are, how they’re going to be able to get the volume that they need,” she said, adding that “You’re going to need some large lines that are going interstate to be able to do that.” The shortage of pipelines could slow down the U.S. LNG rush and it might slow down the price inflation, which the EIA sees as leading to average Henry Hub prices of $3.90per million British thermal units in the fourth quarter of this year, up from $3.20 per mmBtu in July, rising further to $4.30 per mmBtu in 2026. “Rising natural gas prices reflect relatively flat natural gas production amid an increase in U.S. liquefied natural gas exports,” the EIA said. One reason why gas production may remain flat is precisely the absence of additional pipeline capacity to take the gas to where it is needed. There is also the additional challenge of the Trump administration’s decision to boost self-sufficiency in LNG carriers—of which there are currently none. Under new mandates proposed by the U.S. Trade Representative (USTR), beginning in 2028, a total of 1% of America’s LNG exports must be carried via U.S.-flagged vessels. From 2029 onwards, 1% of U.S. LNG exports should be shipped on U.S.-flagged and U.S.-built vessels. There is currently only one LNG tanker transporting U.S. gas under a U.S. flag. The industry has warned that these mandates would hinder growth in LNG exports, especially the one about locally built tankers. According to industry insiders, this would cost two to four times as much as building the carriers in South Korea or China.
BPCL expects Russian crude to form 35% of imports for FY26
State-owned Bharat Petroleum Corp expects its Russian crude to form 35% of its total imports for the remaining year of FY26 as long as there are no new sanctions on Russian oil, the company said in an analyst call. “We are expecting again the flow (of Russian oil) should come back to normal level of 30-35%. As long as there is no new sanction on Russian oil, our procurement strategy will be 30-35% of Russian crude for the remaining year,” the company said. In the first quarter of the current fiscal year 2025-26, the company procured 34% of Russian crude. The company also informed that discounts on Russian oil have come down to the level of $1.5 per barrel. The discounts stood at $18-20/bbl at the beginning period of the Russia-Ukraine conflict. “This quarter our Russian crude procurement is about 34%. In terms of inventory levels, we have kept a little bit more inventory in the months of March and April because of geopolitical issues. Our inventory levels during March 2025 was 2.9 million tonnes whereas generally we keep 2.3-2.4 MMT,” the company said.
‘Selective bullying’: US punishes India, but its own trade with Russia grows 20% under Trump
Even as Washington slaps tariffs on India for buying Russian oil, US trade with Moscow has surged 20 percent since Donald Trump returned to the White House in January 2025. The contradiction was spotlighted at the August 15 Alaska summit, where Trump and Russian President Vladimir Putin met for the first time in a historic bid to resolve the Ukraine war. While no ceasefire emerged, Putin announced a rebound in bilateral commerce. “Incidentally, when the new administration came to power, bilateral trade started to grow. It’s still very symbolic. Still, we have a growth of 20%. As I’ve said, we have a lot of dimensions for joint work. It is clear that the U.S. and Russian investment and business cooperation has tremendous potential,” Putin said. He added that opportunities existed in “trade, digital, high tech, and in space exploration.” Trump described the talks as “extremely productive” but insisted “there’s no deal until there’s a deal.” He said “many points” were agreed upon but “a couple of big ones” remained unresolved, promising to brief NATO allies and Ukrainian President Volodymyr Zelenskyy. Putin, however, framed the outcome as a “new stage” in relations, with trade serving as a foundation for “business-like and pragmatic ties.”
Caught in the Trump-Putin game of chicken: India’s Russian oil imports’ future and options
The additional tariff announced by US President Donald Trump on import of Indian goods over New Delhi’s hefty Russian oil imports has thrown up questions on the potential consequences for India as it walks a diplomatic tightrope amid trade uncertainties and the unfolding game of chicken between Trump and Russian President Vladimir Putin. The stakes are high for India and it is sure to negotiate with the US on Russian oil imports, hoping to get Trump to reverse the tariff penalty. At the very least, India would try and work out a calibrated reduction of oil imports from Russia over an extended period, instead of a complete halt in purchases. After all, New Delhi also values its special relationship with Moscow. In that context, Trump and Putin’s planned Alaska summit, should it ease the strain between the US and Russia, could provide some relief to India on the Russian oil issue. weeks, significant imports of Russian crude by Indian refiners surfaced as a major point of friction for the Donald Trump administration in its relationship with New Delhi. On August 6, Trump announced that an additional 25 per cent tariff on Indian goods—on top of the 25 per cent tariff already announced—would take effect after 21 days. New Delhi described this targeting of India over its acquisition of Russian oil as “unjustified and unreasonable”. India stated that these imports commenced because its traditional energy supplies were diverted to Europe after Russia’s February 2022 invasion of Ukraine. Furthermore, India asserted that the US had “actively encouraged such imports by India for strengthening global energy markets stability” The renewed pressure from the US and other Western powers—pressuring Russia’s top trade partners to cut down on imports from the country—are aimed at forcing the Kremlin’s hand into ending the Ukraine war. For Trump, who wants the over three-year-old Russia-Ukraine war to end within days, this is an opportune time to pressure India over its Russian imports, given that New Delhi and Washington are locked in sensitive trade pact negotiations. Experts also see it as a ploy by Trump to extract a more favourable trade deal from India.
US may not impose additional 25 percent tariffs on India
The Donald Trump administration may not impose secondary tariffs on India over purchasing Russian energy, as the US President said that Russia has already lost a key oil client. Speaking to Fox News aboard Air Force One en route to Alaska, Trump said the US may not impose secondary tariffs on countries continuing to buying Russian crude oil. “Well, he (Vladimir Putin) lost an oil client, so to speak, which is India, which was doing about 40 per cent of the oil. China, as you know, is doing a lot…,” said Trump. “And if I did what’s called a secondary sanction, or a secondary tariff, it would be very devastating from their standpoint. If I have to do it, I’ll do it. Maybe I won’t have to do it,” he added. The secondary 25 per cent tariffs on India are likely to come into effect from August 27. Earlier this week, US Treasury Secretary Scott Bessent said if “things don’t go well” between Trump and Putin at the Alaska summit, then secondary sanctions on India for purchasing Russian oil could go higher. Meanwhile, the government has already said the targeting of India is unjustified and unreasonable. “Like any major economy, India will take all necessary measures to safeguard its national interests and economic security,” it said. The fact is that India has sharply increased its purchases of oil and gas from America. This, in turn, has led to a reduction in India’s trade surplus with the US, which is a major aim of the Trump administration’s trade policy. Official figures show that India’s oil and gas imports from the US have jumped by as much as 51 per cent from January to June this year. The country’s liquefied natural gas (LNG) imports from the US nearly doubled to $2.46 billion in the financial year 2024-25 from $1.41 billion in 2023-24.
GAIL to acquire 49% equity in Leafiniti Bioenergy
GAIL (India) Limited has signed an agreement to buy 49 per cent of the shares in a company called Leafiniti Bioenergy Private Limited (LBPL). The other 51 per cent will be owned by TruAlt Bioenergy Limited (TBL). This deal, signed on August 11, 2025, aims to create new projects that will produce Compressed Bio Gas (CBG). This partnership will only go forward if certain conditions are met and the government’s Department of Investment and Public Asset Management (DIPAM) approves it. Under the agreement, GAIL gets important rights in how LBPL is run. GAIL will appoint two out of four directors on LBPL’s board and GAIL will also nominate the first Chairman of the board. GAIL will appoint LBPL’s Chief Financial Officer (CFO). If LBPL issues new shares, GAIL has the first chance to buy them to keep its 49 per cent ownership. GAIL can also block any changes to LBPL’s share structure. If TBL wants to sell its shares, GAIL has the first right to buy them, or GAIL can sell its shares alongside TBL. There’s also a lock-in period, meaning shares can’t be sold for 5 years from the deal’s completion, or 3 years after 6 CBG projects are running, whichever comes first.
The Gulf calling as India rethinks its oil map beyond Russia
India is preparing to lean more on West Asian oil suppliers such as Saudi Arabia, the UAE and Iraq, as the United States tightens the screws over its imports of Russian crude, reported Mint citing people familiar with the matter For decades, India’s refiners sourced most of their crude from West Asia. That changed three years ago when Russia, shut out of European markets after invading Ukraine, began offering deep discounts. Saudi Aramco and Abu Dhabi National Oil Co., the energy flagships of Saudi Arabia and the UAE and among West Asia’s top crude oil producers, are now back on the list of suppliers India may turn to. As per the report, import of Russian oil will continue, but India is also looking at diversifying its imports, and higher supplies from West Asia are being looked at.
TNEB, Indian Oil Corporation discuss gas pipeline connection to five power plants
The officials of Tamil Nadu Electricity Board (TNEB) and Indian Oil Corporation (IOC) conducted a meeting to discuss direct gas pipeline connectivity to five gas-based power plants in the state. TNEB chairman and managing director J Radhakrishnan, Indian Oil Corporation (IOC) general manager Suman Kumar Mishra and officials took part in the meeting that focused on supplying Regasified Liquefied Natural Gas (RLNG) directly through pipelines to the Valuthur (187 MW), Basin Bridge (120 MW), Thirumakottai (108 MW), Kuttalam (101 MW), and Pillai Perumalnallur (330 MW) gas power stations. Speaking to TNIE, Radhakrishnan said in the first phase, gas will be supplied to Valuthur power plant in Ramanathapuram district through the existing IOC pipeline running from Ennore port to Thoothukudi port. “We also urged IOC officials to quickly submit a project report for extending the pipeline to Basin Bridge power plant in Chennai as well. The move aims to ensure uninterrupted power supply during peak demand hours in the city,” he said, adding another round of discussion will be held soon. Mishra said IOC already has a 440-km gas pipeline running from Ennore port to Thoothukudi port, and the organisation has submitted a project report for the Valuthur plant. “Now, as requested by the TNEB, we are planning to prepare a report for the Basin Bridge plant in Chennai too.”
China cuts Saudi orders for Russian crude while Trump punishes India with steep tariffs
Chinese refiners are cutting back on orders for Saudi oil, with the decline hinting at a shift in global crude flows as more Russian barrels enter the market, according to Energy Aspects Ltd. The London-based consultant said in an 11 August note that the drop in so-called nominations for September-loading term cargoes from Saudi Aramco showed refineries were holding back purchases due to greater availability of Russia’s Urals crude and comfortable stockpiles. The note did not cite any sources. The global oil market is closely watching the potential reordering of flows after the United States and European Union increased pressure on India over its imports of Russian energy. With no comparable action taken against China, there is growing speculation that more of Moscow’s oil will be bought by mainland refiners, including Urals crude shipped from Russia’s western ports. Bloomberg, citing traders informed by the producer, reported that Saudi Aramco will sell 43 million barrels of September-loading crude under contractual supplies to China. This is down from 51 million barrels in the previous month and below the year-to-date monthly average of about 45 million barrels. China had earlier defended its Russian oil imports as legitimate, responding to US pressure after Washington imposed secondary tariffs on India over its energy purchases from Moscow. Energy Aspects said Chinese interest in Urals crude is increasing as it remains the “most competitive” compared with similar Middle Eastern grades. However, the consultancy added that China’s intake has a limit, as Russian imports already account for 17% of its overseas supplies, with 20% viewed as the ceiling for a single country. Trump targets India with steep tariff hike US President Donald Trump had this month cited India’s imports of Russian crude when announcing an additional 25% tariff on imports from India. The measure, set to take effect on August 28, could push tariff rates on some Indian goods to as much as 50% — high enough to effectively hit U.S. imports from India, which reached nearly $87 billion in 2024. The move appears aimed at increasing Trump’s leverage with Russian President Vladimir Putin ahead of their planned meeting in Alaska this week, with India being used as a bargaining tool in the process. Meanwhile, a White House official said on Monday that Trump has extended a tariff truce with China by another 90 days, preventing the imposition of triple-digit duties on Chinese goods. The new decision stops U.S. tariffs on Chinese goods from jumping to 145%, and Chinese tariffs on U.S. goods from rising to 125%. For now, it keeps U.S. tariffs on Chinese imports at 30%, while China’s tariffs on U.S. imports stay at 10%. Indian refiners have become the world’s biggest buyers of Russian oil after turning to discounted supplies in the wake of Western sanctions on Moscow over its invasion of Ukraine in February 2022. Russia’s share of India’s total oil imports jumped from just 1.7% in 2019–20 (FY20) to 35.1% in FY25, making it India’s largest oil supplier. India has sharply criticised the United States and European Union, accusing them of unfairly singling it out over Russian oil purchases while both continue to trade extensively with Moscow despite the war. In a statement issued earlier this month, India’s Foreign Ministry said: “It is revealing that the very nations criticising India are themselves indulging in trade with Russia.” The ministry added: “It is unjustified to single out India.” Former Reserve Bank of India Governor Raghuram Rajan told Valor International that stopping purchases of Russian oil would not be a disaster for India, as current prices are not much higher than those for Russian crude. If Russian oil supplies were cut off completely, prices would go up, but India could cope, he said. He said the bigger problem is political. A decision to stop buying from Russia would be seen at home as giving in to U.S. pressure, which is unpopular in any democracy, Rajan said. If Washington had quietly asked India to phase out Russian oil, it might have been acceptable. Making it public and linking it to a tariff threat makes it much harder politically, he added.
Saudi Crude Shipments to China Poised to Fall in September
Saudi Arabia will ship lower volumes of its crude to China next month, down from a two-year-high this month, after the Kingdom raised its September prices to Asia for a second consecutive month, Reuters reported on Monday, quoting trade sources at Chinese refiners. Saudi Arabia, the world’s biggest crude oil exporter, is expected to deliver about 43 million barrels of crude to China in September, according to a Reuters estimate of allocations for refiners. This is equal to 1.43 million bpd of Saudi shipments to the world’s largest crude oil importer next month, down from an estimated 1.65 million bpd which Saudi Aramco has allocated to Chinese refiners for August. Sinopec, the biggest refiner in Asia, and its Fujian Refinery joint venture with Saudi Aramco, are among refiners that plan to reduce their intake of Saudi crude in September, according to Reuters’ sources. The lower expected shipments would come as Saudi Aramco last week raised the official selling prices (OSPs) for its crude loading for Asia in September as it bets on robust demand. The flagship Saudi grade Arab Light will sell in Asia next month at a premium of $3.20 per barrel above the Oman/Dubai average, the Middle East benchmark, off which shipments to Asia are priced. The hike is $1.00 a barrel above the August price, as well as the second consecutive rise in the price of Arab Light loading for Asia. Saudi Arabia also lifted the official selling prices (OSPs) for the other grades, Arab Extra Light, Arab Medium, and Arab Heavy, by between $0.70 and $1.20 per barrel above benchmarks. The second consecutive increase in prices suggests that Saudi Arabia expect continued robust demand in its key exporting region, Asia, in the coming weeks. A potential reduction of Russian supply to India, due to the new tariffs, could also boost the demand for Saudi and other Middle Eastern crude shipments to Asia next month and going forward.