India Declines Sanctioned Russian LNG Cargoes Amid Energy Concerns

India has declined Russia’s offer to supply liquefied natural gas (LNG) cargoes that are under U.S. sanctions, according to a Reuters report citing people familiar with the matter. The development comes as India faces pressure on energy supplies following disruptions linked to the ongoing West Asia conflict.

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As per Reuters, India communicated its decision during Russian Deputy Energy Minister Pavel Sorokin’s visit to New Delhi on April 30. Sorokin met Petroleum and Natural Gas Minister Hardeep Singh Puri and other officials during the visit.

The report said India remains open to purchasing Russian LNG cargoes that are not covered under U.S. sanctions, while discussions between both countries on permitted cargoes are continuing.

Russian LNG Cargo Bound For India Remains Undelivered

Reuters reported that a Russian LNG cargo from the sanctioned Portovaya LNG plant in the Baltic Sea has remained unable to discharge after India declined to accept the shipment.

The 138,200-cubic-metre LNG tanker Kunpeng had earlier indicated Dahej LNG terminal in Gujarat as its destination in April, according to LSEG shipping data cited by Reuters. The vessel is currently near Singapore waters without broadcasting any destination.

The report added that although documents linked the shipment to non-Russian cargo, satellite tracking identified the tanker’s route from Russia.

India Balances Energy Needs And Sanctions Risks

India is the world’s third-largest oil importer and continues to buy Russian crude oil. However, LNG cargoes under sanctions pose higher compliance risks because they are more difficult to conceal than crude shipments.

Reuters reported that crude oil cargoes can be rerouted through ship-to-ship transfers, while LNG vessels remain easier to track through satellite systems.

The U.S. imposed sanctions on Russia’s Portovaya LNG plant and Arctic LNG 2 project as part of restrictions linked to the Russia-Ukraine conflict.

Hormuz Disruption Raises Supply Concerns

India’s energy imports have come under pressure after disruptions in the Strait of Hormuz following the Iran conflict.

Before the conflict escalated, India imported nearly half of its gas consumption requirements, with around 60% of LNG imports passing through the Strait of Hormuz, according to Reuters. More than half of India’s crude oil imports also moved through the route.

Prime Minister Narendra Modi recently urged citizens to reduce fuel consumption, limit foreign travel and cut non-essential imports to help conserve foreign exchange reserves amid rising global energy prices.

Russia is also seeking long-term agreements with India for LNG supplies and fertiliser exports, including potash, phosphorus and urea, Reuters reported.