Modi-Trump energy pledge signals bonanza for US gas exporters

The recent meeting between US President Donald Trump and Indian Prime Minister Narendra Modi has set the stage for a significant shift in energy trade. Analysts predict that US gas exports will be the primary beneficiaries of this new partnership. As India continues to grow as the world’s fastest-growing major economy, its demand for fossil fuels is expected to rise sharply. The leaders agreed to enhance American oil and gas exports to India, aiming to rebalance the trade relationship between the two nations.

Growing Demand for US Gas in India

Currently, India relies heavily on Russia for crude oil and Qatar for liquefied natural gas (LNG). However, the US is the world’s largest LNG exporter and already supplies about 20% of India’s gas needs. The commitment from Trump and Modi could expand this market further. Rajeev Lala, director of upstream solutions at S&P Global, emphasized that India represents one of the last untapped gas markets globally, offering significant potential for US suppliers.

India’s appetite for natural gas is set to increase dramatically. The International Energy Agency projects that India’s natural gas consumption will rise by nearly 60% by 2030. This surge in demand will likely lead to a doubling of LNG imports during the same period. Currently, India’s domestic gas production meets only about half of its demand. India’s Oil and Gas Minister Hardeep Singh Puri noted that the government aims to increase the share of natural gas in the energy mix from 6% to 15% by 2030. This ambitious goal will necessitate increased imports, creating opportunities for US exporters.

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Indian companies have already begun signing gas supply agreements with countries as far away as Argentina. Puri highlighted that India currently imports around $20 billion worth of energy from the US. By increasing these purchases, India could significantly reduce its trade surplus with the US, which was approximately $35 billion last year. Kevin Book from ClearView Energy Partners remarked that US hydrocarbon purchases could play a crucial role in addressing trade imbalances.

As geopolitical dynamics shift, particularly following Russia’s invasion of Ukraine, India has turned to cheaper Russian oil. However, tougher sanctions from the Biden administration may limit India’s ability to import Russian oil at discounted prices, presenting a timely opportunity for US gas imports.