Oman replaces US as India’s top LNG supplier, overall LNG imports robust despite Hormuz hit

India’s liquefied natural gas (LNG) import slate underwent a discernible reshuffle in September with the US slipping a couple of positions from the top supplier spot — which it had secured in recent months following the outbreak of the West Asia conflict — as European importers stepped up competition for American cargoes. Nonetheless, New Delhi continued to import higher volumes of super-chilled gas on a year-on-year basis from a diversified pool of sources despite the disruption in supplies through the Strait of Hormuz crisis.

Robust LNG demand in India has led to Indian importers competing hard to pick up cargoes from the spot market at super-normal prices, even as some of the other major Asian LNG buyers have curtailed imports. The West Asia crisis has pushed India to secure cargoes from non-hormuz dependent supply sources, as New Delhi has been prioritising supplies over price considerations amid demand from various sectors, which include city gas distribution (CGD), fertiliser, power, and ceramics.

According to tanker data, Oman and Nigeria topped the list of LNG suppliers in September, followed by the US. In August, the US was the top supplier to India, followed by Nigeria, Oman, and the UAE. Imports from the UAE rose significantly on a sequential basis in September, and volumes from Qatar also saw an uptick, reflecting the growing risk appetite of these Gulf states in sending their cargoes through the fraught waters of the strait, according to trade sources. Prior to the West Asia conflict, Qatar was India’s top source of LNG, while the UAE and the US frequently traded the second and third places between them.

LNG imports from the US in September declined 60.7% month-on-month to 0.34 million tonnes, while volumes from Oman rose 11.6% to 0.59 million tonnes, according to vessel tracking data from commodity market analytics firm Kpler. Imports from Nigeria declined 35.1% from August to 0.35 million tonnes, while those from the UAE rose 27.3% to 0.31 million tonnes.

LNG imports from Qatar rose 6.7% sequentially to 0.1 million tonnes in September, but were down 88.5% year-on-year. India’s total LNG imports in September were down 12.7% month-on-month at 2.24 million tonnes, largely due to seasonal demand fluctuations. On a year-on-year basis though, September LNG imports were 7% higher.

According to industry insiders and experts, the UAE has been able to export sizeable cargoes despite the Hormuz blockade using tactics like switching off the LNG tankers’ transponders to avoid detection and capitalising on windows of opportunity based on maritime security assessments in the region. While Qatar has also exported some cargoes using this strategy, the UAE has been far more aggressive, displaying a higher risk-tolerance.

India depends on LNG imports to meet about half of its natural gas requirement, and about 60% of those imports came through the critical maritime chokepoint of the Strait of Hormuz, primarily from Qatar and also the UAE. The two Gulf countries are major LNG exporters at the global level as well. Unlike Qatar and the UAE, Oman’s LNG exports don’t depend on the strait.

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“September LNG imports were also supported by higher gas-fired power generation, as weaker hydropower availability and stretched coal-fired generation increased the call on gas despite the power sector’s high price sensitivity. We expect India’s LNG demand to remain resilient through the end of 2026 despite elevated prices, as growing city-gas consumption, including LPG-to-PNG (liquefied petroleum gas to piped natural gas) switching, and declining domestic natural gas production sustain import requirements,” said Sonal Ranjan, LNG and natural gas analyst at Kpler.

“While elevated Asian spot LNG prices should constrain discretionary demand in the industrial sector, these underlying requirements provide a firmer floor for imports,” Rajnan said. According to her, India is competing hard for LNG cargoes in the international market, while other major Asian buyers like China, Japan, and South Korea aren’t buying as much in the current high-price environment, and are curbing natural gas use by shifting to alternative fuels. China is also buying LNG from Russia. India and most other large importers don’t import Russian LNG due to Western sanctions on Moscow’s LNG projects.

After falling in March and April — the first two months of the West Asia war — India’s LNG imports have trended consistently higher on a year-on-year basis. In the May-September period, super-chilled gas imports rose 17.8% year-on-year to 11.87 million tonnes, as per Kpler data.

In the five-month period, the US was India’s largest source of LNG with volumes at 3.41 million tonnes, or 28.7% of total LNG imports. US LNG import volumes during the period were almost 175% higher than the year-ago period. But over the past couple of months, aggressive pre-winter buying from European importers have altered global flows with a large number of American LNG cargoes going to Europe.

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India’s LNG imports from Oman were 2.33 million tonnes, up nearly 419% year-on-year and accounting for almost a fifth of India’s LNG imports in May-September. LNG imports from Nigeria in the five-month period stood at 2.20 million tonnes, up nearly 169% year-on-year and accounting for 18.5% of India’s LNG import basket. UAE had a share of 9.3% and LNG volumes from the country declined 10.1% over May-September of last year to 1.11 million tonnes. Qatari LNG volumes crashed 90.2% year-on-year in the five-month period to 0.41 million tonnes, and had a paltry market share of 3.4%.

Although high and largely inelastic demand from critical sectors like CGD and fertilisers has ensured that LNG imports remain strong, a few other sectors, most notably power and ceramics, added to the demand for super-chilled gas due to the weather and the broader fuel supply constraints. Given the continuing limitations in supplies via the Strait of Hormuz, LNG prices are likely to remain higher and could push some of the more price-sensitive sectors to alternative fuels.