India cuts LNG buying as other fuels become more attractive
Buyers including Gail India Ltd. and Indian Oil Corp. canceled LNG purchase tenders due to high prices, according to people with knowledge of the matter who didn’t wish to be named due to the sensitivity of the trade. India’s LNG imports this month are estimated to average 1.9 million tons, down 5% from the same month last year and the lowest monthly volume since December 2023, according to data analytics firm Kpler. Prices of LNG have been elevated due to a series of recent outages at export plants in Malaysia to Australia. That’s in spite of fears that the global trade war will cut gas demand. Any reduction in Indian purchases will help to free up supply for rival buyers in Asia and Europe. Spot prices have been trading between $11 to $12 per million British thermal units over the last few weeks, while naphtha rates in India are closer to $8 to $9 per million Btu thanks to a slump in crude. That’s pushing refiners, which account for 12% of India’s LNG consumption, to switch to naphtha, which is currently readily available due to shutdowns at petrochemical plants like Haldia Petrochemicals and Gail’s Uttar Pradesh facility, the people said. Industries such as ceramic tile-makers have also shifted to cheaper propane, while local, less expensive gas is available on the market due to a shutdown at Reliance Industries Ltd.’s Jamnagar refinery and maintenance at some fertilizer plants, they said. Still, India’s LNG demand could suddenly recover if hotter summer weather from next month prompts the government to mandate higher gas-fired power generation, the people added. Much of India’s gas power capacity is currently offline due to high LNG prices.
India Considers Allowing Foreign Investment in Nuclear Plants
As India looks to boost its nuclear power generation, the government is considering allowing foreign companies to own up to a 49% stake in Indian nuclear power plants, government sources told Reuters on Friday. Even if India passes amendments in its nuclear foreign investment laws to allow up to 49% foreign stakes, any foreign investment will likely still need prior government approval, according to Reuters’ sources. Currently, India has 8 gigawatts (GW) of operating nuclear capacity, operated by the state-owned Nuclear Power Corporation of India Limited (NPCIL). In February, the federal budget outlined plans for a significant push toward nuclear energy as part of India’s long-term energy transition strategy. The government now targets the country to have 100 GW of nuclear power generation capacity installed by 2047, “positioning nuclear energy as a major pillar in India’s energy mix,” the cabinet said. India’s government could also accelerate the construction of nuclear power plants by attracting foreign firms if it changes the liability laws. India plans to remove an unlimited liability clause in its nuclear energy laws in a bid to attract foreign firms, especially U.S. companies, to its nuclear energy sector. The Indian Department of Atomic Energy has prepared a bill that would remove a clause in the Civil Nuclear Liability Damage Act of 2010 that exposes suppliers to unlimited liability if accidents occur, government sources told Reuters earlier this month. India’s largest power utility, NTPC, plans to invest over the next two decades $62 billion in building 30 GW of nuclear generation capacity, sources with direct knowledge of the matter told Reuters earlier this year. NTPC is also reportedly looking to hire consultants for feasibility studies for small modular reactors that could potentially replace some of the utility’s old coal-fired power plants. NTPC has issued India’s first such exploratory tender for SMRs, which are considered to be the future of nuclear power.
U.S. Shale M&A Hits the Brakes as Oil Slides and Tariffs Bite
Mergers and acquisitions in the U.S. shale industry got off to a strong start this year. Oil was trading at pretty reasonable prices—unless you’re OPEC—there was a pro-oil president in the White House, and the outlook was bright. For a while. Then, prices took a dive, markets panicked about tariffs, and everyone started predicting economic catastrophe. The outlook is no longer so bright. The first quarter of 2025 saw shale oil and gas deals worth a total of $17 billion, Enverus reported this week. This made the quarter the second-best after the first quarter of 2018, the analytics firm said, noting, however, that about half of that total deal value came from two deals involving Diamondback Energy worth over $4 billion each. One of the deals was an acquisition of Permian-focused producer Double Eagle IV, which cost Diamondback some $4.08 billion, and the other was a dropdown of mineral and royalty rights to subsidiary Viper Energy, worth $4.26 billion. Outside Diamondback’s activity, however, deals began to get sparse as the M&A wave that rose in late 2023 began to ebb away with asking prices too high and the assets on offer of lower quality. “Upstream deal markets are heading into the most challenging conditions we have seen since the first half of 2020. High asset prices and limited opportunities are colliding with weakening crude,” Enverus’ principal analyst Andrew Dittmar said. “Potential sellers are acutely aware of the scarcity of high-quality shale inventory, creating a reluctance to unload their assets at a discount. Buyers, on the other hand, were already stretched by M&A valuations and can’t afford to continue to pay recent prices now that oil prices are lower. The standoff between those two groups around fair asset pricing is set to sink M&A activity.” In fairness, the deal wave could not continue forever, not after two robust years. In 2023, M&A activity in the U.S. oil and gas space surged by 57% from the previous year. The total value of deals that closed that year hit an all-time high of $155 billion, helped by a couple of megadeals of over $50 billion. The next year was robust, too, with close to $150 billion in deals. Last year, however, the focus of dealmakers began to shift from the Permian to other parts of the shale patch in what may have well been an early sign of the pending slowdown. It could be argued that this slowdown would have happened even without the price rout and the tariff war. The supply of high-quality, low-cost acreage was simply going to run out sooner or later—and with the level of activity in 2023 and 2024, that was bound to be sooner. Trends in oil prices and Trump trade policies simply sped up a process that was already underway. Indeed, Enverus noted in its M&A report that lower oil prices discourage dealmaking in the industry. The firm said that “Going back to the start of 2014, oil prices have fallen by more than 5% quarter-over-quarter 17 times. In 11 of the quarters with materially lower crude prices, deal activity fell compared to the prior three months with an average decline in transacted deal value of 30%.” In other words, what’s happening in the shale patch is completely normal, and there is even bonus good news: companies are better positioned to withstand the price rout, according to Enverus, thanks to their new priority of capital discipline and debt level control. “Companies have kept debt levels in check, been conservative about growing production and made judicious use of hedges,” the analytics provider said. It cautioned, however, that this will only spare sector players pain if the rout does not last too long. If the tariff war and the low oil prices extend into 2026, they will start causing pain. Somewhat ironically, such a hypothetical development would revive dealmaking as companies seek to consolidate to survive as they tend to do in times of trouble. “If oil prices struggle into 2026, public E&Ps are likely to start taking more drastic actions including cutting capital spending, selling assets or even considering mergers with another company,” Enverus’ Dittmar commented. The jury’s still out on how long the tariff war or the oil price depression will continue. For now, the situation with tariffs on China does not look particularly promising, as China said it would only engage in negotiations after the U.S. lifts the tariffs already imposed on its exports. The U.S. does not seem to be willing to do that for now, which has resulted in a sort of tariff stalemate. Meanwhile, oil prices remain rather depressed, although they have recouped some of the losses suffered earlier this month amid the sharp revisions in demand outlooks because of the tariffs. This week, the benchmarks are set for another loss after Reuters reported that OPEC+ may be considering another solid production ramp-up in June as it continues to look for a way to make quota laggards pay for overproducing. For now, the environment remains discouraging for a rebound in M&A activity.
Oil Prices Tick Higher Despite Tariff Talks Confusion
Crude oil prices started trading this week with a gain despite mixed signals from Washington regarding tariff negotiations with China. At the time of writing, Brent crude was trading at $67.03 per barrel, with West Texas Intermediate at $63.22 per barrel, after Treasury Secretary Scott Bessent said on Sunday he was not involved in any talks with Chinese officials. The statement followed claims by President Trump that there were ongoing tariff talks with the Chinese side and that he had spoken with China’s President Xi Jinping. Bessent said he had spoken with Chinese officials at the recent gathering of the International Monetary Fund and the World Bank but not about tariffs. “I had interaction with my Chinese counterpart, but it was more on the traditional things like financial stability, global economic early warnings,” Bessent said. The Chinese side has denied that there were any talks underway. Even so, prices are trending higher. Part of the reason seems to be the absence of any significant news, at least according to one trading platform chief. “Absence of news is pushing oil prices modestly higher as traders are positioned short ahead of potential increased OPEC+ supply from the May 5 meeting and a significant production boost in the USA,” Moomoo Australia’s Michael McCarthy told Reuters. Meanwhile, the Trump administration appears not to be in a rush to close any trade deals with those eager for them. Reuters reported that no deals at all were signed during last week’s IMF-World Bank Spring Meetings, which saw world leaders gather in one place to discuss trade. This suggests extended tariff uncertainty, which means extended oil price uncertainty. The physical market, however, is showing some bullish signs, according to ING, which last week noted that “signs of tightness in the prompt physical market should continue to support the oil market. This tightness can be seen in the strengthening of timespreads.”
India can save over ₹9170 billion on its oil import bill by shifting to electric mobility
A complete shift from older fossil fuel-propelled vehicles to electric vehicles in 44 cities with a population of at least 1 million could help India save $106.6 billion on its oil import bill, which translates to ₹9170 billion in Indian currency at the current exchange rate. With this move, India could avoid 11.5 tonnes of PM2.5 emissions every day by 2035 and reduce greenhouse gas emissions by 61 million tonnes of carbon dioxide equivalent. The study by The Energy and Resources Institute (TERI) also claimed that this move would save more than 51 billion litres of petrol and diesel. The study stated that the number of older vehicles in these 44 cities across India could grow from 4.9 million in 2024 to 7.5 million by 2030. The transport sector in India accounts for up to 24 per cent and 37 per cent in the winter season, to the ambient PM10 and PM2.5 concentrations of different Indian cities, respectively, according to TERI. Older vehicles are a major contributor to the air pollution in India’s big cities. The study found that older diesel buses emit the most pollutants into the environment among all vehicle types. The study points out that age restrictions on buses alone could help reduce 50 per cent of PM2.5 and 80 per cent of nitrogen oxide emissions by 2030. TERI has proposed a staggered plan to phase out about 11.4 million vehicles between 2030 and 2035 and recommended either replacing all these with electric vehicles or adopting a combination of electric and CNG vehicles. The study pointed out that a complete shift to electric vehicles could avoid 11.5 tonnes of PM2.5 emissions every day by 2035 and reduce greenhouse gas emissions by 61 million tonnes of carbon dioxide equivalent.
GAIL, CONCOR ink pact for LNG use
State-owned natural gas transmission and marketing company GAIL (India) and Container Corporation of India have signed an MoU to assess the feasibility of using Liquefied Natural Gas (LNG) as fuel for CONCOR’s logistics fleet. The collaboration seeks to harness LNG’s advantages as a cleaner and more cost-effective alternative to diesel, which could result in reduced emissions and lower operational costs, GAIL said on Friday following the MoU signed in the presence of Director (Marketing) Sanjay Kumar and CONCOR CMD Sanjay Swarup. The MoU is yet another step towards CONCOR’s commitment to provide sustainable logistics solutions. It has already established LNG station at MMLP Khatuwas in Rajasthan and procured a fleet of 130 LNG trailers, which is resulting in reduction in carbon foot prints in the company’s day to day operations, Mr.Swaroop said. Mr. Sanjay Kumar said GAIL holds the largest LNG portfolio in the country, with contracts spanning multiple geographies worldwide that position it as a reliable LNG supplier.
Oil Down Nearly 3% As White House Tariff Talk Rumors Fly
Oil prices declined on Wednesday even amid reports that the White House is contemplating significant cuts to tariffs on Chinese imports, a move that could reshape global trade dynamics and influence energy markets. On Wednesday, April 23, at 1:46 p.m. Brent crude was trading down 2.73% at $65.60, while U.S. West Texas Intermediate (WTI) crude dropped 2.0% to $68.37, collapsing to a four-year low after reaching $81 in January. The Trump administration is reportedly considering reducing tariffs on Chinese imports from the current 145% to between 50% and 65%, contingent on successful negotiations with Beijing, according to unnamed sources cited by Reuters on Wednesday. While President Trump expressed optimism about a potential deal, he did not confirm specifics. Analysts suggest that the prospect of eased trade tensions between the world’s two largest economies could bolster global economic growth, potentially increasing oil demand. However, the immediate market reaction is downward, driven by concerns over-supply and the timing of any trade agreement.? The U.S. and China account for around 20% of global oil demand each, which bodes ill for a potential economic slowdown, which could lead to a sharp reduction in demand. In response to a weaker economy and rising OPEC+ supply, oil prices remain under pressure, particularly with eight OPEC+ nations beginning a gradual phase-out of voluntary production cuts on April 1. Additionally, Reuters cited sources on Wednesday indicating that OPEC+ might consider further accelerating output increases in June, following higher-than-planned hikes in May due to rising tensions over compliance with production quotas. Market observers will continue to monitor developments in U.S.-China trade negotiations and OPEC+ production decisions, both of which are poised to significantly impact oil prices in the coming months.?
India sweetens oil block bids with lease reform, arbitration freedom
From the nine iterations of the oil acreage licensing policy (OALP), the major change in the tenth version, due out in August this year, will be twofold. The first of those is the expanded definition of mineral oils to include shale oil, shale gas and coal-bed methane. The other one is the freedom to pursue international arbitration in the event of disputes, as well as offering a longer lease period for the fields the companies win. Combined with the removal of windfall tax on domestically produced crude that was in effect since July 2022, prospective bidders now have a realistic chance to make profits from their discovered fields. That all of these changes have come through Parliament is significant, since executive notifications, foreign investors have discovered, could be overturned easily. The expanded definitions and wider rights to arbitration come from the amendment in the Oilfields (Regulation and Development) Act of 1948, passed by both Houses of Parliament by March 2025.
Natural gas import bill increases 13% to $15.2 billion in FY’25
India’s natural gas import bill surged by 13% to $15.2 billion during the financial year 2024-25, compared with $13.4 billion in FY24, driven by rising consumption, according to data from the Petroleum Planning and Analysis Cell (PPAC). In March, the import bill increased by approximately 8.3% to $1.3 billion, compared to March 2024. The country imported 36,699 million standard cubic meters (mmscm) of liquefied natural gas (LNG) during FY25, reflecting a 15.4% increase over FY24. India’s natural gas consumption rose by 7% to 72,293 mmscm, driven by higher demand from the city gas distribution (CGD), fertiliser, and power sectors. This pushed the country’s reliance on imported gas to 50.8%, up from 47.1% in the same period last fiscal. Analysts attributed this growth to a combination of rising demand and stabilised global natural gas prices, which had previously surged to record highs in FY23. Despite the rise in imports, domestic natural gas production declined marginally by 1% to 36,113 mmscm during FY25. State-owned Oil and Natural Gas Corporation (ONGC) produced 18,795 mmscm of natural gas during this period, a decline of almost 3% from 19,316 mmscm in FY24. Production remained below targets, highlighting the widening gap between demand and domestic supply.
India’s Oil Imports From OPEC Hit Record Low as Russian Flows Soar
OPEC’s market share in India slumped to an all-time low of below 50% of India’s crude oil imports in the 2024-2025 fiscal year, as Russian oil flows to the world’s third-largest crude importer continued to rise and dent the share of the Middle Eastern producers. India’s imports of crude from Russia increased by 7.3% to an average of 1.76 million barrels per day (bpd) in the 2024-2025 fiscal year ending March 31, 2025, according to data obtained and compiled by Reuters. This gave Russia, now India’s single largest crude supplier, a 36% share of the market of an average of 4.88 million bpd of total imports. While the Russian share of Indian oil imports rose slightly in 2024-2025 from a year earlier and has been steadily increasing for the past three years, the share of OPEC in India’s crude purchases declined to 48.5%, an all-time low, according to the data. Since the Russian invasion of Ukraine and the bans on Russian oil in the West, India has become a key buyer of Russian crude, alongside China. Russia, for its part, became the single biggest oil supplier to India. Russia is an ally of OPEC in the OPEC+ agreements to “stabilize the market,” but it has been denting the share of Iraq, Saudi Arabia, and other major Middle Eastern OPEC producers in India. Indian imports of Saudi crude fell to the lowest in 14 years, Reuters has estimated. The higher official selling prices (OSPs) of Saudi supply for most months in 2024-2025 haven’t helped higher purchases amid available cheap oil from Russia, industry sources told Reuters. The price-sensitive Indian buyers have preferred cheap Russian crude supply, when available. India will continue to buy Russian oil if it is sold below the $60 per barrel price cap and delivered on non-sanctioned tankers and without any involvement of sanctioned companies or individuals, Indian officials said earlier this year after the U.S. sanctions in January created market chaos for several weeks before tanker supply chains adapted.