Amid rising tensions in West Asia and obstacles in the Strait of Hormuz, India is now preparing for a new LNG (Liquefied Natural Gas) deal with Russia to secure its energy needs. According to reports, for the first time after the Ukraine war, both the countries are working rapidly on resuming direct LNG trade.
Momentum gained from high level meeting
In this direction, an important meeting was held in New Delhi on March 19, in which Russia’s Deputy Energy Minister and India’s Petroleum Minister Hardeep Singh Puri participated. It is believed that if the talks progress further, the agreement can be finalized within a few weeks.
Change in strategy, preparation to increase imports from Russia
At the beginning of this year, India had slightly reduced the purchase of oil from Russia, but now with the changing circumstances, a new strategy is being adopted. According to the report, India can increase the import of crude oil from Russia to about 40% of the total imports. Since the Ukraine war, India has already purchased oil worth about $44 billion from Russia.
Concern increased due to Hormuz crisis
About half of India’s oil and LNG imports come through the Strait of Hormuz. In such a situation, any kind of interruption there can affect the supply chain. The recent tension has further increased this concern.
Emphasis on alternative supply
The government has asked importers to be ready to purchase LNG from Russia. Besides, talks are also going on about possible sanctions waiver from America and increasing supplies from other countries. The supply coming from Russia is important in this regard, because it is not dependent on the Hormuz route.
Possible impact on the economy
Experts believe that if tension in the Middle East persists for a long time, inflation, stability of the rupee and economic growth may be affected. In such a situation, this strategy of India is being considered a big step towards reducing risks and strengthening energy security.