ADNOC and India: strengthening energy ties for a sustainable future
As we gather for the Third Edition of India Energy Week in New Delhi, we stand at the crossroads of a new era of human progress and global prosperity that will be shaped by three megatrends: the rise of emerging economies, the transformation of global energy systems and the rapid growth of AI. Among the drivers of these megatrends is the world’s population which is expected to increase to 9.7 billion by 2050 from the current 8 billion, a rise that will increase demand for energy. Meeting this demand will require a diversity of energy options and the transformation of current energy systems. With its broad portfolio across the energy spectrum – spanning renewables, nuclear, hydrogen and hydrocarbons – the UAE has been at the forefront of this energy transformation. At ADNOC, we are embracing these megatrends to future-proof our business, drive decarbonisation and deliver long-term sustainable value and growth. In collaboration with long-standing partners, such as India, we are expanding access to energy to meet rising demand, empower lives and enable a more secure and sustainable energy future. Underscoring the deep-rooted, longstanding strategic and historic relationship between the UAE and India is the Comprehensive Economic Partnership Agreement (CEPA), under which bilateral trade has flourished across multiple sectors, including energy. As a testament to this relationship, ADNOC has established several strategic partnerships with Indian companies across the energy value chain including with Indian Oil Corporation (IOC), ONGC Videsh, GAIL and Bharat Petroleum Corporation Limited. We have also welcomed Indian companies as partners in Abu Dhabi’s oil and gas concessions, providing a path to securing long-term energy supplies for India. Today, India is ADNOC’s second largest market for crude oil. Our partnership with India is not just about supply—it is about co-creating long-term energy solutions. In a world where a billion people still lack access to energy, we need all energy solutions to meet demand and we need everyone who can provide solutions to work closely together. This is the thinking behind XRG, ADNOC’s $80+ billion international energy investment company. With an initial focus on international gas, global chemicals, and low carbon energies, XRG is set to lead transformative investments in global energy systems and solutions to meet the increase in energy demand. AI is also proving to be an important tool in accelerating the journey to transform energy systems. To this end, ADNOC has integrated AI across our value chain to enhance efficiencies and unlock greater value from our assets and resources. For example, together with AIQ, we recently completed the trial phase of ENERGYai, the world’s first-of-its-kind agentic AI solution tailored for the energy sector. The solution, which uses AI agents and combines large language model technology with proprietary data, successfully demonstrated significant improvements to seismic interpretation, reservoir performance and monitoring. As one of the fastest growing world economic powers and largest energy consumers, India plays a crucial role in the global energy transformation. On our part, ADNOC continues to engage with our Indian partners to explore new ways to enhance energy security, expand access to cleaner energy, and drive innovation in emerging technologies. We see significant potential to strengthen collaboration in line with India’s ambitions for economic growth and energy security.
Trump’s tariffs and Russian oil woes deepen crisis for Indian OMCs
India’s state-owned oil-marketing companies (OMCs) are staring down an abyss in 2025 on the heels of a disappointing annual budget for oil and gas for 2025-26 and from the volatility in oil and gas markets caused by the Trump administration’s disruptive energy tariff policies. These developments come amid discounted Russian oil flows, a mainstay of gross refining margins for Indian refiners, slowing to a trickle in the face of the latest US sanctions and expensive alternative supplies. US President Donald Trump initially threatened tariffs as high as 60 per cent on China and 25 per cent on Mexico and Canada, subsequently reducing rates to 10 per cent for Chinese imports and for energy imports from Canada and Mexico. The changes were effective from Tuesday but have been delayed by at least a month for its North American trading partners.
Aramco raises prices as demand from Asia grows
Saudi Aramco, the world’s leading oil exporter, has sharply increased crude prices for March shipments to buyers in Asia. Demand from China and India is rising as US sanctions disrupt Russian supply. Aramco raised the official selling price for flagship Arab Light crude by $2.40 to $3.90 per barrel above the Oman/Dubai benchmark average, Saudi Aramco said in a statement on Wednesday. The oil exporter steeply increased crude prices for March shipments across all other regions as well. Aramco raised March prices for buyers in northwest Europe and the Mediterranean by $3.20 a barrel for all crude grades, and raised the OSPs for grades it sells to the United States by 10-30 cents a barrel. The hike in Arab Light price for Asia was broadly in line with expectations with the $2-$2.50 increase forecast in a Reuters survey of three of four Asian refining sources. On January 10, the administration of former US president Joe Biden imposed fresh sanctionson Russian producers, tankers and insurers, further tightening global oil supply from the world’s second-largest producer and limiting vessel availability. In response, Chinese and Indian refiners scrambled to secure alternative cargoes, driving spot premiums for Oman and Dubai crude to their highest levels since November 2022. Opec+, which accounts for nearly half of global oil production, decided in early December to delay the start of planned output increases by three months, pushing them to April. The group also extended the full unwinding of its production cuts by a year, now set to conclude at the end of 2026.
China’s Energy Tariffs Shake Up Global Oil and LNG
China’s retaliatory tariffs on imports of U.S. crude oil, LNG, and coal will have a limited effect on Chinese purchases as Beijing’s oil and gas imports from the United States were modest, at best, even before the renewed trade war. However, the Chinese tariffs on U.S. energy, expected to take effect on February 10, have the potential to disrupt global commodity trade flows with impacts on other regional markets and on energy prices, analysts say. On the day on which the U.S. blanket tariff of 10% on all Chinese imports took effect, China responded with several measured retaliatory tariffs, including a 15% levy on LNG and 10% on crude oil imports from the United States. Considering the small volumes of U.S. oil and LNG ending up in China in recent months, the tariffs will not hurt either the U.S. or China too much in the near term, according to analysts. But the reluctance of Chinese importers to buy the more expensive American crude with the tariff is set to tighten the lighter sweeter crude markets as Beijing will seek alternatives to the U.S. crude and source more barrels from West Africa, for example. With the tariffs, China effectively killed U.S.-Chinese energy trade in the near term, Reuters columnist Clyde Russell notes. The impact on China is likely to be limited, as U.S. crude has most recently accounted for less than 2% of Chinese imports, while U.S. LNG has represented no more than 12% of all LNG imports into China in recent months, according to Kpler data quoted by Russell. In 2024, U.S. crude accounted for 1.7% of total Chinese crude imports, per Chinese customs data. That’s down from a 2.5% share in 2023. China could replace the U.S. volumes without much effort. But the recent crackdown on Russian oil trade and the expected “maximum pressure” campaign on Iran from President Trump could mean that China will have to tap more crude from the Middle East and West Africa, tightening the availability of these grades and driving up prices and shipping costs. The changes in the global LNG trade flows are expected to be bigger. China has long-term agreements with U.S. LNG exporters for deliveries beginning next year or in 2027. So far it has purchased a lot of American cargoes on the spot market. With a 15% tariff, the economics of buying spot LNG volumes just isn’t there—unless Chinese buyers take advantage of the flexible destination clause for U.S. LNG deals. Unlike Qatar, for example, U.S. LNG exporters allow reselling of cargoes as they are not bound by destination. Chinese LNG buyers are already sounding out other buyers in Asia and Europe about swapping U.S. cargoes for supply from elsewhere, anonymous traders told Bloomberg this week. However, in the medium and long term, if trade disputes continue and escalate, Chinese importers are unlikely to commit to long-term supply from new U.S. LNG export facilities, analysts say. This would be bad news for U.S. LNG developers who rely on capacity booked under long-term agreements before making final investment decisions on new export projects. “These tariffs on U.S. LNG directly undermine the Trump administration’s efforts to expand American energy exports and strengthen our geopolitical influence,” Charlie Riedl, Executive Director of the Center for LNG, a trade group representing many U.S. LNG exporters and developers, told Reuters. All of the above expectations could be swept aside if the trade war escalates and Trump pursues tariffs on Mexico and Canada, after the one-month pause, or on the European Union, which appears to be next on his list to address the U.S. trade deficit with tariffs. An escalating trade war between the U.S. and China, the world’s two biggest economies, could slow global growth and weigh on demand for commodities, including in the world’s biggest crude oil and LNG importer, China.
India’s natural gas production to peak in 2025, decline thereafter: Wood Mackenzie
India’s natural gas production is expected to peak in the current calendar year, after which it is likely to decline at a rate of 3.6 per cent annually until 2030, Wood Mackenzie said in a report. Besides, falling production amidst rising demand for the commodity—considered the best transition fuel—is expected to push up imports. India is likely to become the world’s third largest importer of liquefied natural gas (LNG), after China and Japan, by 2032, with inbound cargoes accounting for 75 per cent of its gas consumption. “We expect Indian domestic gas production to increase by 4.5 per cent and peak in 2025, then decline by an average 3.6 per cent annually over the next five years, due to structural declines in mature fields and delays in development of new projects,” the consultancy said. Falling production After 2030, production is expected to see a 9 per cent annual decline through 2040, driven by the exhaustion of mature fields and slower-than-expected discoveries, Wood Mackenzie said. “The narrative could change, however, if the Oilfields (Regulation and Development) Amendment Bill introduced in August 2024 is implemented effectively,” it added. Read: Natural gas: Key support ahead The bill aims to increase investment in oil and gas exploration and production. Key ultra-deepwater discoveries, such as UD-1 in the eastern offshore basin, could transform India’s gas landscape in the future, contingent on favourable policies, faster project execution and advanced exploration techniques. Exploration and production blocks‒OALP-VIII and OALP-IX‒were tendered in recent licensing rounds, but the participation of private players and international oil companies was muted, it pointed out. Rising imports India’s LNG imports totalled 26 million tonnes per annum (mpta) in 2024, accounting for more than half of the country’s gas consumption. “We expect LNG demand to continue to grow in the coming years, exceeding 37 mtpa by 2030 and 88 mtpa by 2050, as India’s demand for gas rises while its domestic production shrinks. By 2032 already, LNG should account for around two-thirds of India’s gas consumption and will become the third largest importer of LNG after China and Japan,” Wood Mac said. LNG consumption saw a whopping 11.5 per cent compound annual growth rate (CAGR) from 2022 to 2024, thanks to lower prices, a rise in industrial demand, subsidies for the Fertiliser sector and changes to pipeline tariff mechanism. Industrial gas demand, primarily from the fertiliser and refinery sectors, alone posted a 9 per cent CAGR in 2022-24. Greater gas availability for new industrial units and the potential expansion of refineries and petrochemical plants will boost Indian industrial gas demand to around 63 billion cubic meters (bcm) by 2040, it projected.
Good news for India? Crude oil prices to stay in $75-$80/bbl range over next six months
After a sharp rise in January 2025, global crude oil prices are expected to average between $75-$80 per barrel over the next six months. This trend is primarily driven by the new Trump administration’s plan to ramp up crude production, OPEC’s decision to maintain output levels, and no major disruption in Russian crude supply. Meanwhile, demand growth is projected to remain subdued amid a slowdown in major global economies, according to CareEdge Ratings. Indian Oil Marketing Companies (OMCs) saw a decline in their gross refining margins (GRMs) during the first nine months of FY25, averaging $4.80/bbl—down from $11.75/bbl in FY24 and $17/bbl in FY23. This drop resulted from reduced discounts on Russian crude and lower product cracks, particularly diesel, which had surged after the Russia-Ukraine war. Going forward, GRMs for Indian PSU OMCs are expected to remain in the range of $4-$6/bbl. Blended retail margins on petrol and diesel surged to approximately Rs 9/litre in Q3FY25, supported by lower crude prices and moderating GRMs. With crude oil prices expected to remain stable and GRMs staying within a narrow range, blended retail margins are projected to stay healthy at Rs 7-9/litre, creating potential for petrol and diesel price adjustments that have remained largely stagnant.
GAIL issues swap tender for 12 LNG cargoes
GAIL (India) Ltd has issued a swap tender offering 12 liquefied natural gas (LNG) cargoes for loading in the United States in exchange for 12 cargoes to be delivered to India in 2026, two industry sources said on Tuesday. GAIL, India’s largest gas distributor, is offering the cargoes for loading, one in each month of the year, from Sabine Pass on a free-on-board (FOB) basis. In exchange, the company is seeking the cargoes for delivery to the Dhamra terminal on a delivered ex-ship (DES) basis in the same timeframe. The swap tender closes on Feb. 19.
India’s green hydrogen sector may belong to big players
India’s green hydrogensector is expected to be increasingly dominated by big players going forward as high capital requirements, economies of scale, and financial challenges will drive out small players, according to experts. “It is indeed true that the initial excitement around the green hydrogen business in India stands reduced with the early enthusiasm from companies of all sizes entering the sector has diminished, leading to a landscape increasingly dominated by large firms,” said Ravi Shekhar, founder and managing director, Eninrac, a research consultancy. One of the key reasons behind big firms dominating the sector includes their advantage on economies of scale. “While it’s challenging to predict with certainty, there are a few trends and factors that suggest big players might have a significant role. Big players in the energy sector typically have the advantage of economies of scale, which can reduce production costs and make green hydrogen more competitive,” said Manoj Bansal, Partner, Grant Thornton Bharat.
Why Oil Prices Could Spike in February
Oil prices are set to finish this week some $2 per barrel lower than a week ago as the January ICE Brent futures contract expires just below $77 per barrel. However, the second straight weekly decline could be cut short very quickly if Donald Trump’s February 1 deadline for Canada and Mexico leads to the US slapping punitive 25% sanctions. If the threat does become a reality, the oil bulls will not stop until Brent is back above $80 per barrel. Former IEA Employees Turn Against It. Just as the International Energy Agency came under severe criticism from Donald Trump due to its marked focus on climate change, a new report penned by the IEA’s former head of analysis identified 23 false assumptions in the organization’s peak-demand scenarios. Investments into Clean Energy Hit New Record. According to BloombergNEF, global investment in low-carbon energy reached $2.1 trillion for the first time on record in 2024, but the 11% year-over-year growth is slower than 25% previously and only 37% of what is required to meet net zero emissions by 2050. Coffee Is The New Cocoa of 2025. Prices of arabica coffee continued to hit record highs this week as front-month ICE futures hit $3.74 per pound on Thursday, on the back of drought-hit tight supplies from Brazil and low coffee bean inventories from top roasters such as Nestle (SWX:NESN) or JDE Peet’s. UK Says No to Oil Development. The Scottish Court of Sessions ruled that government approval for the Rosebank oil field and Jackdaw gas field was unlawful as it did not take into consideration Scope 3 emissions, indefinitely blocking the United Kingdom’s two largest oil and gas projects. Ukraine Claims Huge Hit on Russian Refinery. Ukraine’s military struck Russia’s fourth largest refinery in Nizhny Novgorod in an overnight drone attack, causing a large fire and halting operations at the 340,000 b/d refinery’s integrated petrochemical plant, allegedly also attempting a drone strike on a nuclear reactor. Japan Eyes Alaska LNG to Appease Trump. Japan is mulling support for the $44 billion Alaska LNG project in order to forestall potential trade friction with the United States, eyeing liquefied gas supplies from the port of Nikiski that would be connected to gas fields in the north of Alaska via an 800-mile pipeline. Appetite for Wind Energy Has Never Been Thinner. UK-based energy major Shell (LON:SHEL) reported a $1 billion write-down on its sole remaining offshore wind energy venture, the Atlantic Shores project jointly developed with EDF Renewables, eyeing 2.8 GW of generation capacity in offshore New Jersey. Iraq Claims Huge Flaring Breakthrough. Historically one of the worst flarers globally, Iraq claims to have cut the amount of natural gas it releases by 70% after partnering with TotalEnergies and Baker Hughes, with 2023 flare volumes as high as 637 BCf and almost identical to the country’s gas consumption. Trump Cabinet Moves to Repeal Biden Fuel Standards. The new US Transportation Secretary Sean Duffy directed US regulators to rescind President Biden’s landmark fuel economy standards, hiking CAFE requirements for light-duty vehicles to 50.4 miles per gallon by 2031 from 39.1 miles per gallon now. Kazakhstan Sticks to OPEC+ Balancing Act. Under pressure from Chevron (NYSE:CVX) ramping up production at its giant Tengiz field to 800,000 b/d, the government of Kazakhstan claimed it would make a final decision on OPEC+ production cut compliance after the next joint OPEC+ meeting in June. US Oil Majors Double Down on Gas Generation. US oil major Chevron (NYSE:CVX) announced it plans to build natural gas-fuelled power plants next to data centers in the US Southeast, Midwest and East, partnering with investment firm Engine 1 and using gas turbines made by GE Vernova (NYSE:GEV). Norway’s Government Collapses over Clean Energy. Norway’s government has collapsed after the ruling Labour Party pushed to implement EU clean energy directives, only to see the Centre Party pull out of the coalition and 8 out of 20 government ministers resign, including the finance and defense ministers. Calcasieu Pass LNG to Start in March. According to US energy regulator FERC, the remaining construction work at Venture Global’s (NYSE:VG) 12.4 mtpa Calcasieu Pass LNG facility will be finalized by the end of February, paving the way for a full start of operations after a two-year regulatory limbo.
Budget 2025 | Puri says there’s more than enough for oil companies, LPG beneficaries
Hardeep Singh Puri, the Union Minister for Petroleum and Natural Gas, on Saturday reitered the government’s commitment to compensating for losses incurred by Oil Marketing Companies (OMCs) and said this does not require a separate budgetary provision. Puri explained that his ministry can seek funds from the finance ministry when required and said oil manufacturers have previously received ₹220 billion after they faced under-recoveries to the tune of ₹280 billion. The minister explained that OMCs that engage in good corporate behaviour need to be compensated for their losses. Puri sought to allay concerns over the reduction in the Pradhan Mantri Ujjwala Yogana — a scheme aimed at providing clean cooking gas to poor households — saying there is sufficient provision to meet the beneficiaries’ needs.