India's LNG Imports Surge Amid Strait of Hormuz Disruption
India's liquefied natural gas (LNG) imports rose by 15.4% in May-July compared to the same period last year, reaching 7.08 million tonnes. This increase was largely due to a diversified pool of sources, including the US, Oman, Nigeria, and Angola, which offset the loss of volumes from the Strait of Hormuz.
The Strait of Hormuz has been heavily disrupted due to the conflict in West Asia, forcing a crash in LNG imports from India's largest supplier, Qatar. However, India prioritized supplies over price considerations amid strong demand from various sectors, including city gas distribution (CGD), fertilizers, power, and ceramics.
The US emerged as the top source of LNG for India in May-July, providing 2.19 million tonnes of supply, followed by Nigeria at 1.31 million tonnes, Oman at 1.22 million tonnes, and Angola at 0.80 million tonnes. LNG imports from the US jumped 252.8% year-on-year (y-o-y), while those from Oman were higher by 340.9%. Imports from Nigeria and Angola increased by 123.8% and 71.3%, respectively.
Sonal Ranjan, an LNG and natural gas analyst at Kpler, noted that Indian market resilience has allowed it to maintain strong imports despite the disruption in supplies via the Strait of Hormuz. However, he also warned that LNG prices are likely to remain higher due to the continued limitations in supplies, which could push some price-sensitive sectors to alternative fuels.
The Asian spot LNG prices are expected to reach $19-20 per million British thermal unit (MMBtu) through the second half of the year, making LNG less competitive against other fuels. Ranjan also predicted that India will have to compete with Europe and Northeast Asia for a smaller pool of LNG volumes due to the prolonged disruption scenario.