NEW DELHI: India has sharply increased its imports of liquefied petroleum gas (LPG) from the United States this year as supplies from traditional Gulf exporters declined following disruptions in the Strait of Hormuz caused by the escalating US-Iran conflict.Data from commodity analytics firm Kpler showed the US supplied 3.6 million tonnes of LPG to India between January and July 2026. During the same period, combined shipments from the UAE, Saudi Arabia, Qatar and Kuwait stood at 5.3 million tonnes.The shift marks a significant change in India’s import pattern. Before the conflict, around 90 per cent of India’s imported LPG came from Gulf countries through the Strait of Hormuz. India imports nearly 60 per cent of its overall LPG requirement.
US overtakes Gulf as top LPG supplier
The US has now emerged as India’s largest individual supplier of LPG after Gulf exports were disrupted.In July alone, India imported 896,000 tonnes of LPG from the US, a 24 per cent increase from June. Imports from the UAE dropped 35 per cent month-on-month to 102,000 tonnes, while there were no LPG shipments from Saudi Arabia during the month.Supplies from Kuwait also fell sharply to 33,000 tonnes, down 43 per cent from June, while Qatar supplied just 19,000 tonnes.The contrast with the pre-conflict period has been striking. In January, the US exported only 268,000 tonnes of LPG to India, whereas the UAE supplied 826,000 tonnes.As a result, the US accounted for 73 per cent of India’s LPG imports in July, compared with just 12 per cent in January. During the same period, the UAE’s share fell from 37 per cent to 8.2 per cent. Qatar’s contribution declined from 18.7 per cent to 1.5 per cent, while Kuwait’s share dropped from 15 per cent to 2.69 per cent.To reduce its dependence on Gulf supplies during the conflict, India secured a long-term agreement under which state-owned refiners will import 2.2 million tonnes of LPG from the US in 2026.India’s total LPG imports rose to 1.23 million tonnes in July, the highest level in four months and around seven per cent higher than June, reflecting increased purchases from the US and a broader sourcing strategy.Besides the US and Gulf countries, India also imported LPG from Iran, Oman, Iraq, Argentina and Algeria during July.Industry sources said India has secured sufficient crude oil and LPG supplies until September, easing immediate concerns over domestic availability. However, they warned that any further escalation around the Strait of Hormuz or the Red Sea could complicate future imports.Analysts believe India’s move to diversify suppliers is likely to continue even after tensions in West Asia ease, with refiners expected to maintain a wider import basket while the Gulf remains an important source of crude oil and LPG.Ciaran Tyler, Senior NGLs Analyst at Kpler tells TOI that since the summer of 2025, post-Trump’s new tariff regime and trade deals, the US has rapidly evolved from a minor player into a vital pillar of India’s LPG security strategy. He notes the following:
- Initial 10% Trade Agreement (Late 2025): In November 2025, Indian state refiners (IOC, BPCL, HPCL) signed their first structured 1-year contract with the US to import 2.2 million metric tons (MTPA) for 2026 – accounting for ~10% of India’s annual import needs – partly aimed at narrowing India’s trade surplus with Washington.
- The Strait of Hormuz Catalyst (2026): Historically, India relied on the Middle East for over 90% of its imported LPG. However, severe disruptions and the temporary closure of the Strait of Hormuz in mid-2026 forced India into emergency spot purchases from the US Gulf Coast. US LPG imports surged past 1 million Mt in June 2026 alone, briefly making the US India’s top supplier.
- The 2027 Shift (Targeting 25%): To permanently hedge against Middle Eastern chokepoints, India officially signaled in July 2026 that it intends to source up to 25% of its total LPG imports from the US by 2027 (~5 million Mt). State oil companies are currently preparing 2027 tenders to lock in these long-term American supplies.
IOC eyes gas carriers to support diversification
The diversification strategy has also prompted infrastructure planning by Indian Oil Corporation (IOC), India’s largest refiner. Last week, a Reuters report, citing a tender document, said the company was planning to acquire a 50 per cent stake in very large gas carriers (VLGCs) to support higher LPG imports from the United States.If the proposal goes ahead, IOC will become the first Indian refiner to own VLGCs instead of relying mainly on chartered vessels to transport LPG and crude oil.According to the tender document, IOC is looking for VLGCs with a cargo capacity of 80,000 to 93,500 cubic metres and an age of no more than 12 years. Interested bidders can offer up to two vessels, although the company has not disclosed how many it ultimately intends to acquire.Industry estimates suggest state-run fuel retailers are expected to increase purchases of US LPG from 2027 despite the higher freight costs associated with longer shipping distances.“The biggest challenge in buying US LPG is not availability but freight rates,” an Asian LPG trader said.
