Washington Pressures New Delhi to Pivot Energy Imports Amid Supply Crunch

The United States is intensifying efforts to expand its energy footprint in India, leveraging New Delhi's acute supply vulnerabilities. With the expiration of U.S. waivers for Russian and Iranian oil, Washington is pushing for the immediate realization of trade commitments to secure American energy exports. The urgency comes as geopolitical instability in the Middle East threatens critical shipping lanes. A Citi report indicates that disruptions in the Strait of Hormuz could jeopardize 50% of India's crude imports and 60% of its liquefied natural gas (LNG), leaving the world's third-largest energy market exposed. The domestic impact is already evident in the LPG sector. India's daily demand of 80,000 metric tons far exceeds its 50,000-ton domestic capacity. This shortage has reportedly forced the closure of approximately 10% of restaurants and eateries, according to the PHD Chamber of Commerce and Industry. To mitigate this, the Ministry of Petroleum and Natural Gas has secured 800,000 metric tons of imports from the U.S., Canada, Norway, Algeria, and Russia. Despite the pressure, the transition is fraught with challenges. Experts highlight high freight costs and refinery infrastructure that is not fully compatible with U.S. crude as primary barriers. Furthermore, a sustained shift toward more expensive American energy risks widening India's current account deficit and threatening overall macroeconomic stability.