From Gulf to US: How the Iran war is redrawing India’s LPG import map

US gains ground in India’s LPG market

According to Bloomberg News, India signed its first term LPG supply agreement with the US last year as part of efforts to reduce its dependence on Middle Eastern suppliers. The latest supply disruptions are now accelerating that diversification.

State-owned Indian refiners could issue a tender this month seeking term supplies from the US equivalent to as much as 20% of India’s LPG imports next year, people familiar with the matter told Bloomberg News.

Such purchases would deepen the role of the US in India’s LPG market and provide an alternative to supplies routed through the Persian Gulf.

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The change comes as Indian refiners have also increased domestic LPG production. Output has risen to around 44,000 tonnes a day, nearly 20% above August’s average, as the festive season boosts household demand and supply risks persist.

Gulf disruptions remain a concern

The Persian Gulf remains an important source of India’s LPG, but recent disruptions have highlighted the vulnerability of relying heavily on the region.

According to Bloomberg News, one September cargo for Bharat Petroleum Corp. and two for Indian Oil Corp., all due from Abu Dhabi National Oil Co. (ADNOC), could not be collected. ADNOC has indicated that it will supply its committed October volumes, including five cargoes for Indian Oil and three each for Bharat Petroleum and Hindustan Petroleum.

“As India’s largest LPG supplier, ADNOC remains fully committed to meeting our customers’ needs and supporting India’s energy security,” an ADNOC spokesperson said, according to Bloomberg News.

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The company said it continues to provide reliable and secure LPG supplies to its Indian customers.

Diversification gains urgency

The supply disruptions come just as India enters its peak festive consumption period, with demand expected to remain elevated through Diwali in November. Winter demand could add further pressure on supplies.

Although alternative cargoes from the US and Africa helped ease the immediate supply squeeze during the summer, the latest developments indicate that diversification could become a more permanent feature of India’s LPG procurement strategy.

For India, the shift is therefore not simply about replacing individual disrupted cargoes. A larger US role could reshape the country’s LPG import mix and reduce its exposure to a region that has historically been central to its cooking-fuel supply chain.

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