India Boosts US LPG, LNG Imports Amid Gulf Supply Woes

India has substantially increased its imports of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) from the United States. This strategic pivot comes in response to supply disruptions from traditional Gulf suppliers, heavily impacted by the ongoing West Asia conflict and the effective closure of the Strait of Hormuz.

Shifting Energy Sourcing

Data from maritime intelligence firm Kpler indicates a significant rerouting of LPG supplies towards the US. India’s July LPG imports from the US nearly matched its highest-ever monthly volume from the UAE, a long-standing traditional supplier.

• India imported 0.62 million tonnes of LPG from the US in August.
• July saw 0.89 million tonnes of LPG imports from the US.
• US supplies collectively accounted for over 73% of India’s total LPG imports in July and August.

Similarly, the nation’s LNG sourcing patterns have diversified. Qatar, historically India’s primary LNG source, recorded zero imports in April.

• LNG imports from Qatar dropped to zero in April.
• US LNG supplies rose to approximately 0.75 million tonnes in August.

Cost Implications and Diversification

This shift towards the United States is largely driven by constrained Middle Eastern availability, coupled with India’s critical need to diversify energy sources and secure replacement cargoes, as noted by Sumit Ritolia, a senior manager in modelling.

However, this increased reliance on more distant suppliers, such as the US, has resulted in higher import costs for India. Longer voyages, elevated freight charges, and tighter global commodity availability contribute to this premium for enhanced supply security and diversification.

Broader Crude Oil Landscape

Despite changes in LPG and LNG sourcing, Russia remains India’s largest crude oil supplier. Venezuela also emerges as an increasingly important component in India’s crude supply diversification efforts.

• Russia supplied almost 2 million barrels per day of crude oil to India in August.

UAE crude supplies have maintained relative resilience due to robust pipeline infrastructure and offshore logistics that bypass the Strait of Hormuz. Overall, India’s evolving energy trade strategy reflects a comprehensive effort to diversify its supply basket across crude, LNG, and LPG, aiming to mitigate geopolitical risks by balancing availability, economics, product quality, and energy security.