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Informist, Wednesday, Mar. 18, 2026

 

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--S&P arm: See Asian refineries buy crude frantically from wherever possible 
--CONTEXT: S&P Global Energy analysts brief media on West Asia conflict 
--S&P arm: Asian refineries have shunned crude oil exports amid disruptions 
--S&P arm: Vessel crossings via Strait of Hormuz below 10 since Mar. 2 
--S&P arm: Vessel crossings via Strait of Hormuz fallen from 135 per day Feb 
--S&P arm: Over 125 mln bbl of crude loaded in Gulf awaiting Hormuz transit 
--S&P arm: Seeing more US LPG cargoes moving to India 
--S&P arm:LPG imports from West Asia crucial for normalcy to return in India 
--S&P arm:India can replace West Asia LPG cargoes with those from US, Africa 
--S&P arm: Oman also viable option for India to import LPG 
--S&P arm: See oil prices hitting $200/bbl if no safe shipping through April 
--S&P arm: See oil at $100-$120/bbl assuming shipping resumes by late March

 

MUMBAI – A severe shortage of liquefied petroleum gas is gripping India due to the closure of shipping through the Strait of Hormuz, but S&P Global Energy analysts say the country could offset this by stepping up imports from the US, Africa, and even Oman. While US LPG cargoes to India are already rising, West Asian supplies remain critical for a full market recovery, the analysts noted in a virtual media briefing Wednesday.

 

The military conflict in West Asia is in its third week, with shipping through the all-important Strait of Hormuz still effectively shut. S&P Global energy analysts expect crude oil prices to hit $200 per barrel if this situation persists through April, which is also their worst-case scenario. S&P's base case assumes shipping through the strait to resume by late March, in which case crude oil prices will remain in the range of $100-$120 per barrel.

 

"We are seeing a lot more US cargoes which are heading towards India as well, as well as ships which are speeding up. But there is a bottleneck in terms of how much India can buy, particularly from the US LPG," Rahul Kapoor, global head, shipping and metals, S&P Global Energy, said. A lot of diverisifcation needs to happen as higher prices are also being paid because there are other Asian buyers for US cargoes, Kapoor said.

 

Overall vessel crossings through the Strait of Hormuz have fallen to below 10 since Mar. 2 from 135 per day in February. More than 125 million barrels of crude oil which has been loaded in the Gulf are waiting for transit through the strait, Kapoor said. "I think the key challenge for the market right now and when it started was, first of all, the insurance premiums basically were withdrawn," he said. Another factor is that there have been around 20 attacks in the strait in the last few weeks. "So there is a security challenge as well. No ship owner, trader, operator, charter who is there is willingly wants to cross the Strait of Hormuz...," Kapoor said. There have been discussions about the US-backed insurance as well, but nothing is moving for now.

 

Crude oil prices have surged since the conflict began and are currently over $100 per barrel. Asian refiners are "frantically" buying crude oil from various parts of the world, including Dubai, Pulkit Agarwal, head of India content at S&P Global Energy, said. Several Asian refiners have also shunned exports as they are trying to conserve as much as possible for domestic consumption, Agarwal said.

 

 

India meets nearly half of its natural gas requirements through liquefied natural gas imports, of which nearly 60% is through the Strait of Hormuz, Suyash Pande, senior analyst LNG pricing at S&P Global Energy, said. Around 21 cargoes from Qatar and the United Arab Emirates were delivered to India in April last year, according to S&P Global Data. "This implies a large shortfall in LNG that India needs to fill to meet all its natural gas requirements," he said.

 

The country is currently trying to replace or cut down demand so that the number of cargoes that need to be consumed reduces sharply, Pande said. "Indian government has taken some measures to do this, specifically an announcement on the 9th of March (Mar. 9), which effectively reduces the domestic gas that India produces to be consumed in refineries, to be consumed in pet plants. It also reduces the consumption that fertiliser companies have. It also reduces the consumption that industries have," Pande said. Several companies are still working out the operational details of some of the clauses in the order, but this has effectively reduced the country's consumption of LNG, he said.

 

Since the start of the conflict, prices of key petrochemicals have increased around 31-67% in India, Stuti Chawla, associate director for chemicals pricing Middle East and India, S&P Global Energy, said. There is further upside risk, as upstream supply remains constrained. "The Indian petrochemical industry is experiencing a triple whammy: imports from the Middle East have ceased, imports from Far East and Southeast Asia have drastically declined with numerous producers in these regions declaring Force Majeure due to feedstock shortages, and domestic producers have curtailed petrochemical output to focus on LPG production," Chawla said.

 

Moreover, demand has started to wane, with several downstream units shutting down due to insufficient feedstock. The disruption in petrochemical production and supply could soon begin affecting downstream sectors such as packaging, automotives, paints, white goods, and pharmaceuticals, she added.  End

 

US$1 = INR 92.46

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati and Pallavi Singhal

Edited by Avishek Dutta

 

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