The United States supplied nearly two-thirds of India’s liquefied petroleum gas imports in June, emerging as the country’s dominant supplier as buyers diversified away from Gulf producers amid disruptions caused by the US-Iran conflict.
India imported 1.19 million tonnes of LPG in June, up 3.1% from 1.16 million tonnes in May, according to Kpler data. However, imports remained 44.3% below the pre-war average of 2.14 million tonnes recorded during January and February, showing that overall inflows are yet to return to earlier levels despite a recovery during the month.
US supplies rose to 773,780 tonnes in June from 648,270 tonnes in May, an increase of 19.4%. The country accounted for 65% of India’s total LPG imports during the month, compared with about 56% in May.
The UAE remained the second-largest supplier, with volumes rising 16.7% month on month to 157,170 tonnes from 134,710 tonnes. Its share in India’s June imports stood at 13.2%.
Kuwait supplied 64,420 tonnes, or 5.4% of the total, after shipping no volumes in May, while Saudi Arabia’s supplies rose 42.9% to 64,290 tonnes from 45,000 tonnes. Nigeria rounded out the top five with 32,920 tonnes, up from 12,620 tonnes in May, giving it a 2.8% share.
Together, the five largest suppliers accounted for 1.09 million tonnes, or 91.7% of India’s total LPG imports in June.
Drastic Shift Away
The shift in sourcing was marked. Middle East Gulf producers supplied about 340,020 tonnes in June, accounting for 28.5% of India’s imports. Before the conflict, the region accounted for about 87% of supplies on average during January and February. Qatar supplied no LPG in June, compared with 19,330 tonnes in May and more than 424,000 tonnes in January.
“Given the region is one of the largest LPG exporters, it’s not simply possible to drift away from Middle East Gulf producers. However, Indian buyers will likely push more towards diversification, given the high concentration of supplies coming from the Middle East Gulf. But with limited options outside the region, it’s not really possible to reduce dependence on Gulf producers by a significant margin,” said Nikhil Dubey, senior research analyst, refining and modelling, at Kpler.
Import Inflows Stabilise
The government has restored LPG supplies to industrial and commercial consumers to pre-war levels, supported by higher imports in June, according to a government notification issued on June 25. It has also asked refiners to limit the diversion of propane and butane streams to LPG production and use them instead as petrochemical feedstock, reversing its earlier direction to prioritise LPG output.
Domestic LPG consumption had fallen 20.5% year on year to 2.13 million tonnes in May, from 2.68 million tonnes a year earlier.