India's LNG imports from the Middle East are set to come under pressure, given that escalating tensions around the strait of Hormuz has resulted in some tankers diverting their course, satellite images from market analytics firm Vortexa show.
Only one out of Indian state-run Petronet's three captive LNG tankers, mainly plying between India and the Middle East, has managed to unload LNG at its 17.5mn t/yr Dahej terminal.
The 138,000m³ Disha, carrying 60,000t of LNG, is currently waiting around Ras Laffan LNG terminal after loading. The vessel has been kept on hold for now, sources told Argus.
Another carrier, the 138,000m³ Raahi, has unloaded a similar volume at the Dahej terminal on 1 March. Meanwhile, the 155,000m³ Aseem has rerouted away from the strait of Hormuz while it was back on its way to Ras Laffan after unloading LNG at Dahej on 24 February, Vortexa data show.
The evolving situation is likely to leave Dahej with 2-3 days of LNG supply, traders in India said. But wider impact could be limited for now as supplies from Africa and Australia remained uninterrupted.
Additionally, Oman's 11.4mn t/yr Qalhat terminal may provide some relief as it avoids the narrowest, most restricted part of the strait of Hormuz, making it a strategic export point, traders said.
But the availability of LNG carriers could remain tight given that several shipping firms have suspended or rerouted LNG tankers, which may still result in tighter LNG supply in the country.
The strait of Hormuz handles about a fifth of globally traded oil and a major share of LNG exports from Qatar and the UAE. Any sustained threat to tankers near Omani, Emirati or Iranian waters would raise insurance premiums, extend voyage times and reduce available cargoes as shipowners reassess risk.
Meanwhile, two out of Indian state-controlled gas distributor Gail's four LNG time charters are on course to India, traveling across the Atlantic basin. The other two are en route to Europe to unload cargoes.
Indian importers will likely hold off on any intentions to purchase spot LNG this week, an importer said. But spot demand could resurface as early as next week if tensions do not escalate further, he added.
Furthermore, the Holi festival, which typically takes place over 3-4 March, could also limit any additional spot demand from the country, particularly if the festival gets extended.
Half of India's monthly imports of LNG originate from the Middle East, standing at close to 2mn t, Kpler data show. India's LNG imports were down by 27pc on the month at 1.89mn t in February, Kpler data show.
Indian LNG importers expect the disruption to raise landed prices at west India's Dahej to over $12/mn Btu.
Argus-assessed prices for deliveries to west and east India for second-half March last stood at $10.26/mn Btu and $10.36/mn Btu, respectively, on 27 February, higher by 5¢/mn Btu from the previous session.
