Canada Proposes Oil and LNG Supply to India as Gulf Tensions Threaten Global Energy Routes

Canada has offered to supply oil and liquefied natural gas (LNG) to India as escalating tensions in the Gulf region raise concerns about disruptions to global energy supply chains. The proposal emerged during discussions involving Canadian Prime Minister Mark Carney, who highlighted Canada’s potential to become a dependable long-term energy partner for India.

The initiative comes as geopolitical tensions in the Middle East threaten the stability of oil shipments passing through the Strait of Hormuz, a strategic maritime corridor responsible for transporting a large share of the world’s energy supplies.

Canada Aims to Expand Energy Cooperation

Speaking about the proposal, Prime Minister Carney noted that India’s energy demand is expected to double by 2040, driven by economic growth and industrial expansion.

India is also planning a significant transformation of its energy sector, aiming to add 500 gigawatts of renewable energy capacity by the end of the decade and increase the share of LNG in its overall energy mix.

Canadian officials believe their country can support this transition by supplying low-carbon LNG from its western coast, along with crude oil and critical minerals essential for energy technologies and clean energy systems.

Diversifying Energy Sources

The discussions come at a time when the ongoing Gulf conflict is raising serious concerns about the reliability of traditional oil supply routes.

A significant portion of India’s crude oil imports passes through the Strait of Hormuz, which carries roughly 20 percent of the world’s seaborne oil shipments.

As tensions escalate in the region, Indian policymakers are increasingly focused on diversifying supply routes and strengthening partnerships with multiple energy-producing nations.

Officials say relying heavily on a single maritime chokepoint is now viewed as a major strategic risk.

Exploring Multiple Energy Options

Alongside Canada’s proposal, India is also evaluating several other options to ensure energy security.

Recently, the United States issued a temporary 30-day waiver allowing Indian refiners to purchase Russian oil shipments that were already stranded at sea. The decision reflects global efforts to stabilise energy supplies during the ongoing regional conflict.

Energy discussions between India and Canada also touched on cooperation in nuclear energy and critical minerals, including a $2.5 billion uranium supply agreement intended to support India’s expanding nuclear power sector.

Toward a Strategic Energy Partnership

For Canada, strengthening energy ties with India could unlock a major long-term export market. The country is one of the world’s leading producers of shale-based petroleum and possesses vast reserves of natural gas and uranium.

Officials involved in the talks say the discussions mark the early stages of a broader strategic energy partnership between the two nations, aimed at ensuring stable energy supply while supporting the transition toward cleaner energy sources.