India plans to source a quarter of LPG imports from the US by 2027
Representative illustration
New Delhi: India plans to source up to 25% of its liquefied petroleum gas imports from the US by 2027, according to Reuters. The plan follows disruptions to Gulf shipments earlier this year, when the closure of the Strait of Hormuz during the conflict involving the US, Israel and Iran delayed India’s LPG supplies.
India currently sources about 90% of its LPG imports from the Middle East, with suppliers including Saudi Arabia, the UAE and Qatar. Roughly two-thirds of the country’s LPG consumption is met through imports, and India brought in 21.85 million tonnes of LPG in 2025.
Almost all of these shipments pass through the Strait of Hormuz, a narrow waterway between Iran and Oman that carries about 20% of global oil trade along with a large share of Gulf LPG exports. When the strait was disrupted earlier this year, shipments to India were delayed. The government responded by diverting LPG originally allocated to petrochemical industries toward household supply to avert shortages.
Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum are expected to issue tenders for US LPG supplies within the next one to two months, with contracts set to begin in 2027. Officials from the three companies are also expected to travel to the US next month for discussions on longer-term supply arrangements.
The shift toward US supplies is already underway. American LPG shipments to India crossed one million tonnes in June 2026 for the first time, and are expected to exceed the 2.2 million tonne annual target set under India’s existing 2026 contract with US suppliers.
The move also has a trade dimension. The US president, Donald Trump, has repeatedly pressed India to reduce its trade surplus with Washington. India has pledged to raise its purchases of US energy products by $10 billion, which would take total energy purchases to about $25 billion in the near future.
The supply disruption has affected consumption figures through the year. LPG consumption between January and June 2026 fell about 8% year-on-year to roughly 14.7 million tonnes. Imports over the same period declined around 28% to about 7.5 million tonnes. Full-year 2026 consumption is expected to be around 30 million tonnes, lower than usual because of the supply constraints.
For 2027, LPG imports are projected to rise to about 20 million tonnes, with demand expected to recover to around 31 million tonnes. Reuters reported that the junior petroleum minister, Suresh Gopi, told Parliament that the government’s diversification push is intended to secure supply and reduce dependence on any single region. He added that the aim is also to limit the risk of future disruptions from geopolitical crises in West Asia.
