India has reportedly declined Russia’s offer to purchase sanctioned liquefied natural gas despite the severe supply crunch created by the ongoing Strait of Hormuz crisis.
According to sources, the decision was conveyed directly to Russia’s Deputy Energy Minister Pavel Sorokin during his visit to New Delhi.
A Russian LNG tanker carrying 1,38,200 cubic metres is currently drifting near Singapore without a designated discharge port, highlighting the immediate impact of India’s refusal. While India continues to import discounted Russian crude oil under a temporary waiver granted by the United States, it has drawn a clear distinction between crude and LNG, citing the higher compliance risks and visibility associated with gas shipments.
India’s rejection comes at a time when the country meets nearly half of its gas demand through imports, with 60 per cent of these supplies previously routed through the disrupted Strait of Hormuz. The crisis triggered by the Iran war has severely constrained flows through this critical chokepoint, forcing India to explore alternative sources and routes.
Analysts note that LNG cargoes are more easily traceable than crude shipments, making them particularly vulnerable to sanctions enforcement. This visibility, combined with the reputational and financial risks of handling sanctioned cargoes, has weighed heavily on India’s decision-making.
The refusal also underscores India’s cautious balancing act between securing energy supplies and maintaining compliance with international sanctions regimes. While Russian crude imports have surged under the waiver, LNG presents a different challenge.
Gas contracts are typically longer-term and involve infrastructure commitments such as regasification terminals, making them harder to disguise or reroute compared to crude oil. The presence of a Russian tanker stranded near Singapore illustrates the logistical complications that arise when buyers hesitate to engage with sanctioned cargoes.
India’s energy security remains under strain as the conflict in West Asia continues to disrupt traditional supply chains. The country has already faced difficulties in securing cooking gas supplies, with shipments through Hormuz sharply reduced since late February.
Although emergency cargoes such as the MT Sarv Shakti have managed to cross the strait, the overall flow remains restricted. The government has emphasised its commitment to insulating citizens from steep price rises, but the rejection of Russian LNG highlights the limits of diversification under sanctions pressure.
Industry observers suggest that India is likely to intensify efforts to source LNG from non-sanctioned suppliers such as Qatar, Australia, and the United States, even if at higher costs. African producers may also play a role, though their LNG export capacity is limited compared to Middle Eastern and Russian volumes.
The decision reflects not only compliance concerns but also India’s broader strategic calculus, as it seeks to avoid jeopardising relations with Western partners while still leveraging discounted Russian crude under the waiver.
The episode illustrates the complexity of India’s energy diplomacy amid the Iran war. By accepting Russian crude but rejecting LNG, India has drawn a line between what it considers manageable under sanctions and what poses unacceptable risks.
This nuanced approach reflects the interplay of geopolitical constraints, economic resilience, and domestic political considerations, as the government navigates one of the most challenging energy supply environments in recent years.
Agencies
