NOIDA, INDIA – APRIL 16: Indian buyers line up to refill their empty liquefied petroleum gas (LPG) cylinders near a gas agency office in Noida, on the outskirts of New Delhi, India on April 16, 2026. (Photo by Amarjeet Kumar Singh/Anadolu via Getty Images)
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United States is intensifying efforts to sell oil and gas to India World’s third largest energy market It is struggling with supply disruptions from the Middle East and its options are shrinking after Washington ended waivers for Iranian and Russian crude.
But experts say replacing oil and gas from the Gulf countries and Russia with American energy is a difficult choice for India.
High freight costs, refinery infrastructure that is not fully compatible with US crude, and long delivery times are among the major obstacles to deepening energy trade with Washington.
America is emphasizing energy sales
On Wednesday, US Ambassador to India Sergio Gore met India’s Petroleum and Natural Gas Minister Hardeep Singh Puri and discussed.Energy security and opening up new opportunities To accelerate development.”
While Puri did not disclose details of the discussions, Gore said in a post on X that the talks focused on “expanding access to reliable American energy” in India and “supporting long-term energy security and diversity for both countries.”
Gore is not the first US official to pressure India to buy more US energy. US President Donald Trump has repeatedly raised the issue, at times even urging India to buy Venezuelan oil supplied through Washington.
According to a March 2 Citi report, the disruption in the Strait of Hormuz threatens about 50% of India’s crude oil imports, 60% of liquefied natural gas and almost all of its liquefied petroleum gas (LPG) supplies. Its impact is already being felt at the domestic level.
Last month, when US Treasury Secretary Scott Besant announced Indians allowed 30 days relaxation Refiners would continue to buy Russian oil, he said, adding that India was “an essential partner of the United States” and Washington expected New Delhi to step up purchases of US crude.
On Thursday, Besant said that America will not do this Renewal of “General License” on Russian or Iranian oil, and previous exemptions were only for approved oil “that was on the water before March 11.”
This has deepened New Delhi’s energy concerns, with key sources of energy supply removed as global markets remain tight.
In February, as part of the broader US-India trade agreement, New Delhi said this “intends” to import more More than $500 billion worth of US energy, information and communications technology, coal and other products.
With India facing an acute energy supply crisis, Washington is now pressing to convert those intentions into near-term commitments.
But India is a net energy importer, and a large portion of its import bill comes from fuel. Any sustained increase in energy prices risks widening the current account deficit and weakening macroeconomic stability.
supply shortage
Mukesh Sahdev, chief oil analyst at energy intelligence firm XAnalysts, said the US wants India to sign the energy deal as soon as possible.
He said India is in a “tense situation” as it struggles to secure supplies of oil and gas, and if Washington signs a deal before the conflict in the Middle East subsides, it could get higher prices and more favorable terms.
Since the beginning of the Iran War, the government LPG supply for households given priority – Where it represents the primary cooking fuel – On commercial use. This has led to the permanent closure of around 10% of restaurants and eateries, according to a report released by industry body PHD Chamber of Commerce and Industry on Thursday.
Following reports that India may take 3-4 years to restore LPG supplies to Iran-war levels, the Ministry of Petroleum and Natural Gas on Thursday shared details of the country’s LPG stocks.
from india Daily LPG demand remains At around 80,000 metric tonnes, it said in a post by X, noting that domestic supply is only around 50,000 tonnes. To bridge the gap between domestic supplies and weak imports from the Gulf, the ministry said it had secured 800,000 metric tonnes of “assured import cargo” that comes from the US, Norway, Canada, Algeria and Russia.
deal mismatch
Experts said the US is keen to export LPG – a mixture of propane and butane – to India as it builds up excess reserves. China has been a major buyer of US propane, but in the absence of a trade deal between Beijing and Washington, the US is looking for new markets.
Sahdev said this dynamic does not easily extend to liquefied natural gas, where India is a highly price-sensitive buyer and could switch to coal for power generation and fertilizer production if gas prices rise.
India is already cutting LNG supplies, according to a note shared with CNBC by S&P Global Energy, which said power generation, refining and petrochemicals are lower priority sectors and therefore more at risk of cuts. It said fertiliser, city gas for residential and commercial use and transportation are among the high priority sectors.
Most of India’s crude oil imports still come from Russia, Saudi Arabia, Iraq, the United Arab Emirates and Kuwait. Sanctions have once again limited access to Russian oil and supply disruptions in the Middle East are reducing India’s options.
However, citing the mismatch between crude oil quality, refinery configuration and India’s demand requirements, experts said large-scale imports of US crude oil are unlikely. India’s refineries are also set to maximize diesel production, making US crude less attractive.
India has greater potential for US exports of LNG, LPG, ethane and propane, said Pankaj Srivastava, senior vice president at energy research firm Rystad Energy.
“With damaged infrastructure in the Middle East – particularly in Qatar – the reliability of LNG and LPG supplies could come into question, and the US could emerge as a natural partner,” he said.
But he cautioned that imports will remain expensive due to the Middle East conflict and broader global supply shocks. Without meaningful waivers, he said, “the economics will not favor American sourcing.”
