India Limits LNG Import Damage to 5% Despite Hormuz Crisis, S&P Says
Diversified sourcing from Oman, Nigeria, Angola and the US shielded Indian LNG volumes as Gulf supply routes fractured under Hormuz disruption.
An S&P Global analysis published on June 23 (2026-06-23) found that India's liquefied natural gas imports fell just 5% despite a 17% disruption to global supply from the Strait of Hormuz crisis — a figure that points to successful rerouting rather than demand rationing as the primary adjustment mechanism.8
The adaptation operated faster than the price signal suggested it would. Month-on-month, Indian LNG arrivals rose 16% in May from April as non-Middle Eastern cargoes accelerated into the gap, according to provisional oil ministry data compiled by Indian media. May year-on-year volumes declined just 2%.7 The S&P analysis attributed the resilience to diversified sourcing from Oman, the United States, Nigeria and Angola — all supply chains that bypassed the Strait entirely.8
Oman anchored the diversification. New Delhi and Muscat had signed a bilateral trade deal — the India-Oman CEPA — before the Iran war began, and OilPrice.com reported on June 2 (2026-06-02) that the agreement had come into effect at precisely the moment India needed non-Hormuz gas supply. Oman's geographical position, on the eastern edge of the Arabian Peninsula with direct Gulf of Oman access, allowed it to ship LNG without entering contested waters.6 US, Nigerian and Angolan cargoes routed via the Atlantic or around the Cape completed the substitution.8
The rerouting also worked on the crude side. S&P data show Middle East crude exports rebounded to over 10 million barrels per day in June, aided by alternative routing through the Red Sea and expanded ship-to-ship transfers east of Hormuz — a partial recovery from the effective closure of the Strait that cut Gulf liquids production by 15 million barrels per day at its peak.8 ICE Brent crude front-month stood at $77.06 as of June 23 (2026-06-23) at 14:07 UTC, and JKM Asian LNG was at $15.86/MMBtu at the same snapshot.8 JKM Asian LNG had spiked above $25/MMBtu in late March (2026-03-26) when Qatari export infrastructure was first damaged, according to a Databiztimes report published on May 19 (2026-05-19).3
The cost picture is less forgiving. India's total oil and gas import bill reached $18.7 billion in May, up 81.6% from the $10.3 billion paid in May 2025, according to the same oil ministry data.7 Volume resilience did not translate to price resilience: the substitution cargoes arrived at elevated spot rates, and the rupee came under pressure as capital exited alongside the higher import bill.7 The 5% volume decline masks a near-doubling of the dollar cost.
West African producers absorbed a disproportionate share of the redirection. The Economist reported that Asian buyers pivoted to Nigeria, Angola, Brazil, Guyana and Norway once Middle East supply routes fractured, citing Brazilian barrels for May delivery to China offered at a premium to Dubai on March 2 (2026-03-02).4 For Atlantic Basin LNG exporters, including US Gulf Coast terminals, the displaced Indian and Northeast Asian demand has been a direct and measurable volume pick-up.
The adjustment has limits, and S&P's framing as a resilience story sits alongside EIA data showing the scale of what was absorbed. In May, the EIA assessed that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar and Bahrain collectively shut in 10.5 million barrels per day of crude output.5 The LNG damage from Qatar's export infrastructure was a direct contributor to the price spike in late March (2026-03-26).3
US production is adding to the rebalancing. EIA's Short-Term Energy Outlook puts Lower 48 marketed natural gas production at 117.2 Bcf/d in the first quarter of 2026, 4% above the same period in 2025, with Permian output forecast at 29.2 Bcf/d for the full year — 6% above 2025 levels.1 The additional volume available for LNG export provides a ceiling on how far Asian spot prices can recover absent a fresh escalation.
Nigeria and Angola both operate near capacity limits in their LNG export terminals; any upstream disruption in either country removes one of the substitution options India has leaned on since March. Whether West African and US cargo availability can sustain the redirection if Hormuz remains constrained through northern hemisphere summer will determine whether JKM stays near current levels or reprices toward the late-March peak.2,8