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US & Iran Step In As India Faces LPG Shortage
3 Apr
Summary
- India's LPG imports in March fell 40% due to a war-related supply gap.
- The US became India's largest LPG supplier, with Iran resuming shipments.
- Traditional suppliers from West Asia significantly reduced their LPG shipments.
India's liquefied petroleum gas (LPG) imports saw a sharp decline of approximately 46% in March compared to January levels, and a 40% decrease from February. This reduction created a significant supply deficit, impacting the nation's energy resources. The disruptions stemmed from maritime traffic issues through the Strait of Hormuz, a critical transit point for a third of global LPG exports.
In response to the shortfall, the United States stepped in as India's primary LPG supplier for March, with shipments increasing by 30% from February. Notably, Iran also resumed its LPG shipments to India after a nearly seven-year absence, providing a small but significant volume. These new supply routes partially compensated for the reduced deliveries from traditional sources in the UAE, Qatar, Kuwait, and Saudi Arabia, which collectively supplied only 55% of India's March LPG needs.
Domestic production was ramped up by roughly 40% by mid-March to help bridge the gap, but it could not fully offset the import reduction. The oil ministry had previously asked refiners to prioritize LPG production over petrochemicals, a move that is now being partially reversed as demand from sectors like pharmaceuticals and food rebounds.
