/Agencia Reuters
India has rejected Russia’s offer to sell it liquefied natural gas (LNG) subject to US sanctions, despite the shortage caused by tensions in the Middle East, according to two sources with direct knowledge of the matter.
The deal has left a tanker heading to the South Asian country in limbo, as talks continue over permitted cargoes.
This stance highlights the delicate balance the world’s third-largest oil importer and consumer seeks to maintain between securing energy supply and avoiding LNG cargoes penalized by the US, which are harder to conceal and carry a higher compliance risk. It also underscores Moscow’s limitations in redirecting its LNG exports to new markets.
India’s reluctance has prevented an LNG cargo from the US-sanctioned Russian Portovaya plant on the Baltic Sea from discharging, even though India was indicated as its destination in mid-April, one of the sources said. The vessel was tracked despite documentation suggesting the cargo was not of Russian origin, the source added.
Reuters reported in mid-April, citing LSEG shipping data, that the 138,200 cubic meter tanker Kunpeng was heading to the Dahej LNG import terminal in western India. According to LSEG, the vessel is now near Singapore waters with no defined destination on its transmission signal.
India, the largest buyer of Russian crude oil by sea, communicated its decision not to purchase sanctioned LNG to Russia’s Deputy Energy Minister Pavel Sorokin during his visit on April 30, where he met with Indian officials including Oil and Natural Gas Minister Hardeep Singh Puri, one of the sources said. It was his second meeting in two months, and Sorokin may return in June to continue talks, the source added.
Meanwhile, India’s purchases of Russian crude have continued unabated, favored by a temporary exemption from US sanctions introduced to help countries cope with the energy crisis resulting from the US and Israel’s war against Iran, which began on February 28.
Arctic LNG 2 is Russia’s other export plant subject to US sanctions. Washington intensified sanctions on LNG plants in early 2025 due to Russia’s war in Ukraine.
While crude oil cargoes can be concealed through ship-to-ship transfers at sea, LNG shipments are much harder to hide from satellite tracking, one of the sources noted.
India is open to buying authorized Russian LNG, but most of those volumes are committed to Europe, the source stated, adding that China remains a major buyer of Russian LNG, both sanctioned and non-sanctioned.
Moscow is also seeking to reach long-term agreements to supply India with LNG and fertilizers such as potash, phosphorus, and urea, the source added.
Before the conflict in Iran disrupted navigation through the Strait of Hormuz, India covered half of its gas consumption through imports, of which approximately 60% arrived via that waterway. More than half of its crude oil supplies came through the same route.
Indian Prime Minister Narendra Modi recently urged the population to save fuel and foreign currency by working from home, limiting foreign travel, and reducing imports of gold and edible oil.
