India’s liquefied petroleum gas (LPG) imports from the United States will exceed one million metric tons during June, marking an all-time high for the Asian country. The increase responds to the need to secure energy supply following disruptions in the Middle East due to geopolitical tensions in the region.
Middle East Crisis Altered Supply Flows
For years, India relied on Middle Eastern producers to cover nearly 90% of its imported LPG needs. However, restrictions stemming from the regional conflict and operational difficulties around the Strait of Hormuz significantly altered usual trade flows.
As a result, Indian LPG imports fell to 696,000 tons in April. Subsequently, the country managed to recover some supply during May, when imported volumes reached 1.15 million tons.
United States Gains Prominence in the Indian Market
Given the need to guarantee the supply of fuel used by millions of households for cooking, Indian refineries intensified spot purchases of U.S. cargoes.
Industry sources indicated that India will receive between 1.1 and 1.2 million tons of LPG from the United States during June. This figure represents significant growth compared to the 648,300 tons imported from that country in May, according to Kpler data.
Before the disruptions in the Middle East, New Delhi was already considering increasing the share of U.S. LPG within its import matrix as part of efforts to balance bilateral trade with Washington. However, the geopolitical situation considerably accelerated that process.
Measures to Protect Domestic Supply
Concurrently, Indian authorities promoted various actions to reduce pressure on the domestic market. These include increasing national LPG production by refineries, prioritizing supply for households, and expanding piped gas connections.
According to industry sources, these initiatives are already contributing to a 15% to 20% reduction in LPG consumption, strengthening the resilience of the national energy system.
United Arab Emirates and Kuwait Regain Presence
Likewise, supplies from the United Arab Emirates began to show signs of recovery during June. Estimates point to volumes of between 300,000 and 400,000 tons for this month.
Industry sources noted that Abu Dhabi National Oil Co. (ADNOC) deployed several vessels to transport LPG to the Omani port of Sohar, from where new cargoes destined for the Indian market were organized.
The country’s refineries also expect to receive around 45,000 tons from Kuwait, while smaller volumes continue to arrive from Iran and other traditional suppliers such as Oman, Qatar, Saudi Arabia, Algeria, and Nigeria.
Gradual Market Stabilization Expected
Market participants believe that the partial opening of maritime routes in the region will allow for a progressive recovery of supplies from the Middle East in the coming months.
If this trend continues, the increase in international supply could ease pressure on LPG prices and contribute to greater stability for one of the world’s most important domestic fuels.
Source: Reuters
Photo: Shutterstock
