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India Must Diversify Gas Sources Amid Middle East Tensions, Says Ex-IOCL Exec

A former Indian Oil Corporation executive warns that India must geographically diversify its gas imports to reduce vulnerability to Middle East conflicts. The country is heavily impacted as a majority of its LPG and a significant portion of its LNG and crude oil transit the volatile Strait of Hormuz. While public sector units have shown flexibility in sourcing LPG from other regions, the LNG supply chain faces severe constraints due to recent force majeure declarations by major producers. This disruption directly affects households and industries reliant on these fuels.

Key Points: India Needs Gas Source Diversification, Says Former IOCL Director

  • Geopolitical tensions threaten energy imports
  • Heavy reliance on Strait of Hormuz for LPG & LNG
  • Public sector units seeking alternative sources
  • Sanctioned Russian LNG suggested as an option
2 min read

India should look for geographical diversification for gas, says former IOCL Executive Director

Former IOCL director warns India must diversify gas imports to mitigate Middle East risks, highlighting impacts on LPG, LNG, and crude oil supplies.

"India should definitely look for a geographical diversification for gas to mitigate the risks. - Sandeep Jain"

New Delhi, April 1

India should definitely look for a geographical diversification for gas to mitigate the risks posed by ongoing geopolitical tensions in the Middle East, according to Sandeep Jain, Former Executive Director at Indian Oil Corporation Ltd..

Speaking to ANI, Jain emphasized that India needs to consider all options, including "Russian-sanctioned LNG" that is currently available. He argued that the high cost of current imports could lead to "demand destruction" and "economic depression."

Jain said that government-owned entities such as IOCL, BPCL, and HPCL increased refinery production and sought alternative routes. He observed that these companies "are very flexible in contracting LPG from the US, from Argentina, and from Russia," as well as other available sources. Jain noted that these efforts aimed to ensure that "households, whichever uses LPG, don't face any issues."

Jain noted that the escalation between the US, Israel, and Iran conflict has left India "at a crossroad" because the Strait of Hormuz facilitates the flow of 20 per cent of liquefied natural gas (LNG), crude oil, and liquefied petroleum gas (LPG) globally.

Jain said that India is "very adversely impacted" by these developments because the country imports roughly 60 to 70 per cent of its LPG, with 90 per cent of those volumes arriving through the Strait of Hormuz.

He indicated that this disruption "has directly impacted every household" in the country that relies on LPG for daily needs. Jain highlighted the scale of the challenge, stating that the "Indian government is trying hard because it's not easy to replace 14 to 15 million metric ton of LPG per annum which comes from this narrow strait."

The impact also extended to crude oil, with Jain stating that "around 40% of crude which India consumed around 5.2 million barrels per day comes from this Strait of Hormuz."

While public sector units successfully moved toward alternative sources, including sanctioned crude from Russia, the LNG sector faced more severe constraints. Jain noted that "LNG has got literally impacted" as 65 per cent of India's LNG flows from the Middle East, with 60 per cent passing through the strait.

He pointed out that major producers like Qatar Energy and ADNOC declared force majeure after two production facilities were destroyed, leading to a supply cut of "more than 50%" for Indian industries.

- ANI

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Reader Comments

P
Priyanka N
Absolutely agree with the diversification strategy. But let's not forget, we also need to massively invest in renewable energy. Solar, wind, and green hydrogen are the future. Reducing dependence on imported fossil fuels should be the ultimate goal.
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Aman W
The numbers are scary! 90% of our LPG through one strait? My mother was worried last month about cylinder prices. The government must act fast to secure supplies from other regions. Good that PSUs are being flexible.
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Sarah B
While diversification is key, we must proceed with caution regarding "Russian-sanctioned LNG." Aligning too closely could have wider diplomatic and trade repercussions. The strategy needs to be balanced and pragmatic.
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Karthik V
This is the reality of global politics impacting our kitchen. The Ujjwala scheme beneficiaries will be hit hardest if LPG supply is disrupted. Hope the authorities have a solid backup plan. Jai Hind.
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Vikram M
The expert has a valid point, but I feel we are always reactive. We need a long-term, proactive energy policy that is reviewed every year. Let's build stronger ties with Central Asia and ASEAN for pipelines and LNG terminals.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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