Whalesbook
Energy Security Vulnerability
India's heavy dependence on Middle Eastern suppliers for its liquefied natural gas (LNG) needs presents a significant energy security challenge. In 2024, West Asian countries supplied nearly 59.5 percent of India's total LNG imports, a figure notably higher than that of other major importing economies. This concentration makes the nation susceptible to fluctuations and disruptions stemming from regional geopolitical tensions.
Comparative Exposure
Comparisons with other leading LNG importers highlight India's unique exposure. China sourced approximately 26.5 percent of its LNG from the Middle East, while Japan's reliance stood at a mere 10.7 percent. South Korea imported 35.3 percent from the region, and Thailand 26.8 percent. European nations demonstrated even lower dependence, with France importing just 1.3 percent and the Netherlands virtually none from the Middle East.
Supplier Concentration
An added layer of risk stems from the concentration of suppliers. The top five exporters collectively supply about 83.5 percent of India's LNG imports, exceeding the global average of 72.4 percent and the concentration levels seen in economies like Japan and South Korea. This limited diversification in sourcing amplifies vulnerability.
Diversification Efforts
Despite the current reliance, significant opportunities for diversification exist. Australia, the world's largest LNG exporter, shipped substantial volumes, yet India accounted for only 0.1 percent of its exports. India's share in US LNG exports was 7.2 percent, and from Russia, just 0.3 percent. The nation also did not import LNG from Malaysia, a major exporter.
A government source indicated efforts to secure more LNG cargoes and re-prioritize gas allocations to prevent consumer impact. However, while India holds over three weeks of reserves, prolonged conflict or shipping route disruptions could pose serious challenges if diversification is not accelerated.