India Plans Higher US LPG Imports as Strait of Hormuz Disruptions Persist

India’s state-owned oil refiners are looking to increase LPG purchases from the US next year as disruption in the Middle East continues to affect supply routes, according to a MoneyControl news report.  

Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. are seeking up to five US cargoes a month under annual contracts. 

Contracts Could Rise to 2.76 Million Tonnes 

The proposed contracts would cover five cargoes of 46,000 tonnes each every month. Each shipment is expected to contain equal quantities of propane and butane. 

The refiners currently have contracts for four cargoes a month from the US for 2026. If the new agreements are finalised, contracted volumes would rise to about 2.76 million tonnes in 2027 from 2.2 million tonnes this year, an increase of more than 25%. 

Government Sets Higher US Import Target 

The government has asked the three refiners to raise the share of India’s LPG imports covered by US term contracts to at least 15% in 2027. The figure stands at 10% for 2026. 

The higher US purchases also come as India continues negotiations with Washington on a final trade deal. Increasing energy imports from the US could help narrow India’s trade surplus with the country. 

Middle East Still Dominates Supply 

Before the recent disruption, more than 90% of India’s LPG imports came from the Middle East. The US-Iran war disrupted shipments through the Strait of Hormuz and contributed to shortages in the domestic market. 

The situation around the waterway remains unsettled. US and Iranian negotiators are exploring a phased agreement aimed at reopening the key energy shipping route. 

US Shipments Reach Record Level 

The US has already become India’s largest LPG supplier. Shipments, including spot purchases, reached 3.9 million tonnes through August, the highest level recorded. 

The planned contracts would take the US share of India’s LPG supply higher while reducing the proportion sourced through Middle Eastern routes. This comes as refiners adjust procurement following the disruption around the Strait of Hormuz. 

Read More: India’s Crude Import Spending Jumps 48% to $74.8 Billion in First 5 Months of FY27! 

Conclusion  

US LPG purchases are set to increase as Indian refiners seek to reduce dependence on Middle Eastern supplies. The proposed contracts would lift annual volumes by more than 25%. 

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