Kamal Ghorui
India is turning to the US to mitigate its ongoing LPG supply crisis as the war rages on in the Middle East. India gets around 60% of its LPG needs from the Gulf region, and more than crude oil, it is the disruption in liquified petroleum gas supply through the Strait of Hormuz that has got the government scrambling to secure stocks.As per an S&P Global Energy report, India is moving to broaden its sources of LPG imports, stepping up refinery output and intensifying diplomatic engagement as it works to maintain a steady supply of cooking fuel for households and essential services such as hospitals and educational institutions amid the ongoing Middle East conflict.
India turns to US for LPG supplies
Analysts at S&P Global Energy noted that the global LPG market is currently grappling with a shortage of cargoes, as disruptions in the Middle East have temporarily affected the Strait of Hormuz that accounts for nearly 30 per cent of global LPG supply. This has tightened overall availability and reduced the pool of spot cargoes.Anmol Bhushan, associate director for LPG at S&P Global Energy CERA, said, “India is increasingly turning to the US for LPG as geopolitical tensions reshape global trade flows.”
Four Gulf nations supply 80% of India’s imported LPG (Source: S&P Global Energy)
According to the expert, if the Middle East war conflict continues for a longer duration, there is a chance that North American LPG will gain a stronger foothold in the Indian import mix. “Recent trade patterns show rising US volumes moving into India”, he says.
Securing Passage Through Strait of Hormuz
With nearly 60 per cent of its LPG needs met through the Gulf region, the government has taken urgent steps to secure alternative supplies. It is also encouraging the use of substitutes such as kerosene and coal in restaurants and other non-priority segments to reduce pressure on limited availability.“The silver lining is the ongoing diplomatic dialogue between Iran and India. This engagement helped enable Indian-flagged LPG carriers to transit the region, setting a positive precedent,” said Charles Kim, associate director for LPG at S&P Global Commodities at Sea. “Continued cooperation could support the passage of additional Indian-linked ships, keeping vital supply routes workable for India and offering some relief to the broader market.”Two state-owned LPG carriers have safely navigated through the Strait of Hormuz, a critical route that handles around 90 per cent of the country’s LPG imports from the Middle East.
LPG flows from Middle East & US
- Two state-owned LPG carriers, VLGCs Shivalik and Nanda Devi, successfully crossed the Strait of Hormuz and arrived in India during the week. Each vessel carried around 46,000 mt of LPG, taking total supplies delivered to over 92,000 mt for the domestic market.
- Shipments of US-origin LPG to India have been rising, with volumes now exceeding those sourced from traditional Gulf suppliers, according to CAS data.
- India’s weekly LPG imports declined to 265,000 mt in the week ending March 19, down from 322,000 mt on March 5, as per CAS data.
India’s LPG import loadings pivot to US (Source: S&P Global Energy)
- Supplies from the Middle East dropped sharply to 89,000 mt, accounting for just 34 per cent of total imports, the lowest share since January.
- In contrast, alternative regional supplies increased to 176,000 mt during the same period, compared to zero in the previous week when the Middle East had accounted for all imports.
- Indian oil marketing companies have secured a term contract for 2.2 million mt of US-origin LPG for 2026, equivalent to roughly four VLGC shipments per month. In the first two months of 2026 alone, India imported close to 480,000 mt of US LPG, translating to about 11 VLGC cargoes.
- India has also rolled out emergency measures and ramped up domestic production to cushion households and businesses from potential LPG shortages, while also fast-tracking the shift toward piped natural gas.
- Reliance Industries is operating at full capacity at its Jamnagar refining and petrochemical complex to boost LPG output for the domestic market.
- Domestic production currently meets about 41 percent of India’s LPG requirement, with the remainder being sourced through imports, according to petroleum ministry officials.
- The oil ministry has revised booking cycles to 25 days in urban areas and up to 45 days in rural regions to ensure a more balanced distribution.
- State governments have intensified enforcement efforts to curb hoarding and black marketing of petrol, diesel and LPG.
