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Informist, Thursday, Apr. 2, 2026

 

By Anand JC

 

NEW DELHI – The ongoing war in West Asia has effectively resulted in a near-blockade of the Strait of Hormuz through which 90% of India's imported liquefied petroleum gas flows. While who will win the war in the Persian Gulf is still being debated, the US has already dethroned the United Arab Emirates as India's biggest LPG supplier in March, data from maritime intelligence firm Kpler showed. 

 

India imports as much as 60% of its LPG needs. The import of LPG into India fell for the third consecutive month in March by 40% month-on-month to 1.22 million tonnes, Kpler data showed. India imported 2.11 million tonnes of LPG per month on average between October and February.

 

India has been importing higher quantities of LPG from the US every month since December. Imports from the US picked up since New Delhi signed a pact to import LPG from the US in November. This LPG deal came months after the Trump administration imposed a reciprocal tariff of 25%, and an additional 25% punitive tariff aimed at discouraging India's purchases of Russian oil, and pushed India to purchase more energy from the US.

 

India's state-run oil marketing companies had in November signed a one-year contract for the import of 2.2 million tonnes of LPG per annum from the US Gulf coast for the contract year 2026, representing close to 10% of India's annual LPG imports at the time of signing. The US accounted for roughly 35% of India's LPG imports in March, up from nearly 16% in February and 12% in January.

 

Before March, the bulk of India's LPG imports were sourced from the UAE, Qatar, and Saudi Arabia. Nearly 20% of the world's energy requirement historically flowed through the Strait of Hormuz before the US and Israel attacked Iran on Feb. 28, prompting a near-closure of the Strait of Hormuz.

 

Severe supply disruptions in the shipping channel in March meant the UAE and Qatar slipped to the second and third spot on India's LPG source list. Shipments of LPG from the UAE dropped to 226,000 tonnes in March from 625,000 tonnes in February while LPG cargoes from Qatar fell to 226,000 tonnes in March from 431,000 tonnes in February.

 

Some media reports suggest Tehran is now levying a toll on passage of shipments from the shipping channel, but the Indian government has rejected these claims. Reopening of the Strait of Hormuz has emerged as the biggest talking point in the ongoing war. As many as four India-flagged ships carrying LPG made their way through the crucial choke point in the past two weeks while 18 more remain stuck in the Persian Gulf, a senior ministry official said Friday.

 

War-torn Iran made a comeback on India's list of oil suppliers as the latter bought 43,000 tonnes of LPG from Tehran in March, enough to meet half of India's daily demand. Indian Oil Corp. Ltd. bought LPG from Iran for the first time since 2018, to be shared with Bharat Petroleum Corp. Ltd. and Hindustan Petroleum Corp. Ltd., Bloomberg reported in late March, citing sources. The US had imposed sanctions on the sale of Iranian oil in global markets but waived these temporarily in March to increase the supply of oil.

 

The disruption in the Strait of Hormuz prompted India to diversify its LPG supply rather quickly even as the central government took measures to boost domestic production of the commodity. India even sourced LPG from countries such as Argentina and Malaysia – countries that India has not relied on to fulfil its LPG requirement – although in extremely low quantities.

 

"India remains heavily dependent on LPG imports from (the) Middle East (West Asia) and the alternative for LPG in short order remains very tricky from the availability and timing standpoint as well as the right mix of Propane and Butane that India needs," Pulkit Agarwal, head of India content at S&P Global Energy, said in late March. "Against this backdrop, Indian markets are increasingly focused on demand management, maximising molecules domestically and accelerating efforts to diversify energy sourcing while exploring diplomatic solutions towards getting some molecules from the region," Agarwal had said.

 

Consumption of LPG in India has risen to around 31.3 million tonnes in 2024-25 (Apr-Mar) from 21.6 million tonnes in FY17, according to CRISIL Intelligence. Domestic production of LPG has increased to 12.8 million tonnes in FY25 from 11.2 million tonnes in FY17, the research firm said. Even as domestic production has ramped up only slowly, India's LPG imports have doubled between 2016 and 2025, according to S&P Global Energy.  End

 

Edited by Deepshikha Bhardwaj

 

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