Sources: India refuses Russian LNG due to sanctions; talks continue about permitted cargoes
Two sources who are directly involved in the matter confirmed that India had declined Russia's offer of liquefied gas, subject to U.S. sanction, despite a shortage caused by Middle?East tensions. This has left a tanker bound to India in limbo while talks continue about permitted cargoes.
This stance highlights how the third largest oil importer in the world is trying to find a balance between securing its energy supplies while avoiding LNG cargoes that have been sanctioned by the U.S., as they are more difficult to conceal and pose a greater risk of non-compliance. This also highlights the limitations of Moscow's ability in re-orienting its LNG exports towards new markets.
One source said that India's unwillingness to accept the LNG cargo, which was destined for India, from the U.S. sanctioned Portovaya Plant in Russia, in the Baltic Sea, has prevented it from being discharged, even though the destination had been India since mid-April. Source: despite documents indicating that the cargo was not Russian, the vessel was tracked.
LSEG shipping data had indicated in mid-April that 'the 138.200-cubic metre tanker Kunpeng' was headed to the Dahej LNG export terminal in western India. According to LSEG, the vessel is currently near Singaporean waters and has not broadcast a destination.
One of the sources stated that India, as the largest buyer of Russian crude oil by sea, informed Russia's Deputy Minister of Energy Pavel Sorokin of its decision to not buy LNG under sanctions during his visit to India on April 30. He met with Indian officials, including Petroleum and Natural Gas minister Hardeep Singh Puri. The source said that this was the second time they had met in a short period of time. Sorokin may return to India in June for more talks.
The Indian Oil and Gas Ministry and the Russian Embassy in Delhi didn't immediately respond to comments.
'RUSSIA READY TO SELL, INDIAN COMPANY CAUTIOUS.'
India's purchases have continued to grow, thanks in part to a temporary lifting of U.S. sanctions, imposed by the U.S. and Israel on Iran on February 28, which caused an energy crisis.
Arctic LNG 2 is the other Russian export plant that's subject to U.S. sanction. Washington increased sanctions on the LNG plants early in 2025 due to Russia's aggression against Ukraine.
One source said that while crude oil cargoes are easily hidden by ship-to-ship transfers, LNG shipments can be tracked via satellites.
The source stated that India is willing to buy Russian LNG with a license, but the majority of these volumes are destined for?Europe. Source: China is still a major purchaser of both sanctioned Russian LNG and unsanctioned Russian LNG, according to the source.
Sources said that Moscow was also looking for long-term agreements to supply India with LNG, as well as fertilisers like potash, phosphorus, and urea.
India imported about 60% of its gas before the Iran conflict shut down shipping through the Strait of Hormuz. More than half its crude oil supplies also came from the same waterway.
Narendra Modi, the Indian Prime Minister, on Sunday called for people to save fuel and foreign currency by working at home and limiting travel abroad. He also urged them to reduce imports of edible oil and gold. (Reporting and editing by Kevin Liffey in New Delhi, Krishna N. Das, Nidhi verma)
(source: Reuters)
