Domestic natural gas price to hit govt ceiling in July
Domestic natural gas price is set to rise to the government-set ceiling of $6.75 per mmbtu next month, from $6.41 currently, as the rate is linked to crude prices, which surged this month due to the Iran conflict. The Centre revises the Administered Price Mechanism (APM) rate every month based on the average crude price of the preceding month. The price is set at 10% of the price of the Indian crude basket, subject to a ceiling of $6.75 per mmbtu. At June’s average crude price of $70 per barrel, the effective rate for July will be $6.75 per mmbtu. CCrude prices have started softening after a ceasefire between Iran and Israel earlier this week, and are currently hovering around $68 per barrel. If the average slips below $67.50 in July, the APM rate for August could fall below the ceiling. Since the government introduced the new pricing formula in April 2023, linking domestic gas to crude oil, prices have mostly remained at the ceiling – first $6.50, and later $6.75 per mmbtu – except in June, when lower crude prices brought the rate slightly down. Prior to April 2023, there was no ceiling price for natural gas, allowing consumers to benefit from lower prices. Under the new regime, prices have generally been higher, squeezing margins for gas distributors and industrial users, while rewarding gas producers.
Reliance & other Indian private refiners dominate buying of main Russia oil grade
India has taken 80% of Russian seaborne exports of its flagship oil grade so far this year, with the country’s only two private refineries scooping up a growing portion of the cut-price crude. The South Asian nation has bought 231 million barrels of Urals in the year through June 24, according to data analytics provider Kpler. Reliance Industries Ltd. and Nayara Energy Ltd. alone took 45% of Russia’s shipments of the medium-sour variety. India’s increasing dominance as a buyer of Urals — it took 74% of exports of the grade in 2024 — highlights the country’s dependence on Russian energy, as well as its importance as a revenue generator for the Kremlin. Chinese independent refineries, known as teapots, have traditionally been enthusiastic buyers of Russian oil, but they’re getting squeezed by a stricter tax regime and weak local demand this year. The portion of Urals being purchased by the two private Indian refiners has been rising steadily over the last few years, and has jumped sharply so far in 2025. Reliance — which has taken 77 million barrels of the grade this year — is now the world’s single biggest buyer of Urals. The refiner, owned by Indian tycoon Mukesh Ambani, entered into a 10-year agreement with Russia to buy as much as 500,000 barrels a day of oil from January. Urals now makes up 36% of all of Reliance’s crude purchases, up from 10% in 2022, according to Kpler. The grade accounts for a whopping 72% of Nayara’s oil buying, compared with 27% three years ago. India’s major state-owned refiners — Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp Ltd. — haven’t entered into any term deals with Russia and are more constrained in the currencies they can use to buy their crude.
Shell Addresses BP Merger Speculation
Shell said on Thursday it hasn’t actively considered an offer for BP and has no intention of making such a bid, after a media report earlier this week rekindled speculation about a giant energy tie-up of the two UK-based rivals. On Wednesday, BP shares jumped by nearly 7% before paring the bulk of those gains after The Wall Street Journal reported that Shell is in early-stage discussions to acquire its British rival. Shell on Wednesday dismissed the Journal’s report as “market speculation.” Shell then put out a statement on Thursday, in which it said “In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer.” Under UK market rules, Shell confirmed it has no intention of making an offer for BP and by confirming this, Shell will be bound by the restrictions in the rules not to make an offer for BP in the next six months. “We remain focused on delivering more value with less emissions through performance, discipline and simplification,” Shell said. The supermajor, however, left the door slightly open to an offer in the future if a third party announces a firm intention to make an offer for BP, or “if there has been a material change of circumstances.” BP’s weak first-quarter results and stock underperformance over the past year have rekindled speculation that the UK-based supermajor could be a target of a blockbuster acquisition. Speculation about another oil giant taking over BP is not new—such rumors have been swirling for over a decade, particularly ones suggesting that Shell could be the bidder for a merger with BP. Shell’s CEO Wael Sawan told analysts on the Q1 earnings call last month that “before we ever look at a sizable inorganic, we have to have our own house in order.” “I’ve said in the past we want to be value hunters. Today value hunting, in my view, is buying back more Shell,” Sawan said. Still, market analysts and investment banks have started to run the numbers on how big a Shell-BP oil and gas giant could be.
ONGC deploys 200-ton crane at Assam gas leak site as well capping preparations advance
Oil and Natural Gas Corporation Limited (ONGC) has commissioned a 200-tonne crane with an 80-metre boom at the site of well RDS#147A in Assam’s Rudrasagar field, the company said on Tuesday. “This marks a significant advancement in the preparatory phase leading to the well-capping operation,” a statement issued by ONGC said. The oil major said that it “continues to make measured and strategic progress in the well control operations at RDS#147A, despite persistent rainfall and challenging site conditions.” The crane is now fully operational and is actively supporting critical tasks at the site. Its deployment follows extensive stabilisation work to ensure safe use amid persistent rainfall and challenging ground conditions. “Several site stabilisation and preparatory activities were undertaken to ensure the safe deployment and operation of the heavy-duty crane,” ONGC said. “ONGC teams responded promptly, reinforcing the location to maintain momentum in the ongoing operations,” it added.
Iraq Accelerates This Oil Megaproject To Meet 7 Million Bpd Production Target
Even before the latest potentially game-changing developments began involving its longtime financial, political, and military ally Iran, it was clear that Iraq needed to focus more on the independent development of its own resources — most notably in energy — for its future. In the weeks leading up to the Western-backed Israeli attacks on Iran, the U.S. removed the longstanding waivers that allowed Iraq to keep importing electricity and gas from its neighbour to power 40% of its grid and rolled out new sanctions aimed at cutting Baghdad’s support for Tehran. For years, Iraq has been talking about increasing its oil production to various figures – 6 and bit million barrels per day (bpd), 7 and a bit million, 8 and a bit million– whatever; they have all amounted to nothing. Now though, Baghdad will need to start doing something to achieve these increases. So, can it meaningfully increase its oil production, and will it do so? Theoretically, Iraq has the natural resources to increase its oil production to way above the current average of just over 4 million bpd. Iraq officially holds 145 billion barrels of proved crude oil reserves (nearly 18% of the Middle East’s total, and the fifth biggest on the planet). Unofficially, it likely holds much more oil than this, with the Oil Ministry stating in October 2010 that its undiscovered resources amounted to around 215 billion barrels. This number had independently been arrived at back into 1997 by highly respected oil and gas firm, Petrolog. That said, the figure did not include the parts of northern Iraq in the semi-autonomous region of Kurdistan. With conservative estimates for these included, the International Energy Agency underlined that Iraq’s ultimately recoverable resources totalled about 246 billion barrels of crude and natural gas liquids. Given this, the ‘Integrated National Energy Strategy’ (INES) report of 2012 that was funded and developed by the World Bank, with further assistance from management consultancy firm then-Booz & Company, identified three realistic future oil production scenarios, as analysed in full in my latest book on the new global oil market order. These showed how the country could increase its oil output to either the ‘Low Production’ scenario of 6 million bpd by 2025, the ‘Medium Production’ scenario of 9 million bpd by 2020, or the ‘High Production’ scenario of 13 million bpd by 2017. A combination of indolence on the part of some of those in charge of Iraq’s oil strategy and corruption from others in the corollary political apparatus meant years of little tangible progress being made on any of these scenarios. It also eventually resulted in the withdrawal of many Western firms from Iraq that could effect such significant oil output increases, as repeatedly detailed by OilPrice.com. At that point onwards, it had become increasingly clear that the intention of the Federal Government of Iraq in Baghdad (and its key backers China and Russia) was to push the West out of a unified Iraq, having subsumed the northern semi-autonomous Kurdistan region into the rest of the country. However, given this scenario, the U.S. and its allies have pushed back with the opposite agenda, as also analysed in full in my latest book. To put it plainly: the U.S. and its key allies ultimately want to the northern Kurdistan region of Iraq to terminate all links with Chinese, Russian and Iranian companies connected to the Islamic Revolutionary Guards Corps over the long term. This could then be used as a bridgehead to reassert the West’s influence in the rest of Iraq through big investment deals firstly and then related infrastructure developments. On the other side of the equation, China and Russia have long been behind the idea of rolling the Kurdistan Region into the wider Iraq and keeping the West out forever. As a senior political source in Moscow exclusively told OilPrice.com many months ago: “Iraq will be one unified country and by keeping the West out of energy deals there, the end of Western hegemony in the Middle East will become the decisive chapter in the West’s final demise.” The West’s recent strategic push in this context has seen not just the US$25bn five-oil field development by the U.K.’s BP in the north of the country around the Kurdistan Region announced but also the US$27 billion four-pronged deal by France’s TotalEnergies in the south of the country as well. Several other deals by Western firms are in the making too, all of which are aimed at preventing the final move of Iraq into the China-Russia sphere of influence and eventually reversing it. Indeed, May 19 saw two deals signed by U.S. firms HKN Energy, and WesternZagros, to develop two fields – the Miran gas field and the Topkhana oil and gas field — in the Kurdistan area. U.S. Energy Secretary Chris Wright made it very clear about the deeper intention behind these deals, saying that they align with the administration’s broader strategy of striking commercial deals with allies to counter Iran’s influence. By extension, given the extremely strong links between Tehran and Beijing and Moscow, this also means countering China’s and Russia’s influence across Iraq as well. More recently in this precise regard was the announcement that the Iraqi Drilling Company (IDC) is making steady progress on its project to drill 15 oil wells in the North Rumaila oil field, alongside the U.S.’s Halliburton and the Basra Energy Company, with the latter being wholly owned by BP and also PetroChina, for the time being at least. The entire Rumaila field – split into North and South — lies around 30 kilometres north of Iraq’s southern border with Kuwait and, together with Kirkuk, has produced around 80% cent of Iraq’s cumulative oil production to date. BP has long been in talks with Iraq’s Oil Ministry to push production up to 2.1 million bpd from the current circa-1.2 million bpd which, given the field’s estimated 17 billion barrels in proven reserves, should not be difficult. However, there is a catch – and this
Iran-Israel War Prompts China to Reconsider Russia’s Gas Pipeline Proposal
The war between Israel and Iran has spark worry about energy supply security in Beijing, and a greater interest in the Power of Siberia 2 pipeline—a project proposed by the Russian side, on which the Chinese side has been in no hurry to make a decision. The Wall Street Journal reported the news, citing unnamed sources close to the government in Beijing. The latter has been in two minds about the Power of Siberia 2, first, because it has been hard to agree with the Russian side on things like ownership and pricing and second, because China does not want to become over-reliant on a single source of oil and gas. Now, these concerns appear to have taken the back seat in the face of a fresh dose of Middle Eastern instability and energy supply uncertainty—especially in gas. Almost a third of China’s gas imports come as LNG from Qatar and the United Arab Emirates, the WSJ noted in its report, citing Rystad Energy figures. Russia, in turn, is China’s third-largest supplier of LNG, after Australia and Qatar. But it is China’s biggest pipeline supplier, via the Power of Siberia 1, with flows this year set to reach 38 billion cu m, according to S&P Global. This is the maximum capacity of the Power of Siberia 1, but the POS 2 will have a capacity of 50 billion cu m. This is a lot of gas with no geopolitical risk that could lead to spikes in prices. As for diversification, China also imports quite a lot of natural gas via pipeline from Turkmenistan. Russia also appears set to benefit from the risk to oil supply from the Middle East and more specifically Iran, the WSJ report suggested. China, which is essentially the only buyer of Iranian crude, is now reconsidering this reliance as well, following the latest developments in the Middle East. One way of reducing said reliance is by boosting oil purchases from Russia, according to analysts. Russia currently accounts for some 20% of China’s oil consumption.
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.