The US has officially emerged as India's top LPG supplier, accounting for more than 55% of imports according to OPEC's latest monthly oil marketing report. As reported by The Hindu BusinessLine, this represents a significant shift from the country's traditional reliance on West Asian suppliers, which previously accounted for more than 90% of India's LPG imports. The development comes after India arranged its first-ever US term supplies earlier this year, contracting approximately 2.2 million tons, or 10% of its total inbound shipments. CareEdge reports that nearly two-thirds of India's LPG imports are now sourced from the United States, with the American pivot becoming particularly pronounced after the fresh conflict in West Asia from February 28, 2026.
India's state-owned refiners are actively negotiating US liquefied petroleum gas contracts as the government seeks to diversify its LPG import sources. According to reports from The Hindu BusinessLine, the government has instructed Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp. to source at least 15% of India's 2027 LPG imports through US term contracts. This represents a significant shift from the country's traditional reliance on West Asian suppliers, which previously accounted for more than 90% of India's LPG imports. Executives from the three companies are currently in the US negotiating LPG supply deals to secure additional volumes for next year, with discussions remaining private as per The Hindu BusinessLine sources.
The US has already emerged as India's top LPG supplier this year, with shipments reaching a record 3.9 million tonnes through August. According to OPEC, the US is expected to become India's largest LPG supplier, accounting for about 55% of India's imports in line with the 2025 sales agreement between India and the US for LPG. India imported roughly 2.85 million tonnes of LPG in Q1 FY27 on a provisional basis, representing a 45% decline year-on-year and 34% decline against Q1 FY25. India's LPG imports nearly halved, from an average of 1.8 mt per month during April 2025–February 2026 to 0.9 mt per month during March–June 2026. The American Petroleum Institute reports that India's LPG imports from the Middle East declined around 85% from February 2026 to June, with India sharply reducing LPG consumption as alternative supplies have only partially offset disrupted flows from the Middle East.
The move to increase US LPG imports is part of India's broader strategy to widen its supply pool and narrow its trade surplus with the US. According to The Hindu BusinessLine reports, this initiative supports New Delhi's pursuit of a trade deal with Washington, where trade talks have been ongoing since last year without reaching an agreement. The state refiners plan to jointly issue a tender for US LPG after assessing potential suppliers and offers, though India's oil ministry and company spokespeople did not immediately respond to requests for comments. The Trump administration has repeatedly sought to boost energy exports to India, one of the world's largest oil and gas importers. OPEC reports that India's oil demand will increase by about 0.2 million barrels per day (mb/d) year-on-year in Q3 2026, with preliminary data from the PPAC indicating a rebound in oil demand in July after three months of consecutive declines.
The push to reduce reliance on West Asia follows acute shortages caused by the war in Iran, which disrupted flows through the Strait of Hormuz. As reported by The Hindu BusinessLine, LPG consumption plunged more than 16% year-on-year to 2.35 million tonnes last month as shortages forced households and industries toward piped natural gas and more polluting fuels such as biomass and kerosene. India's total gross LPG tankage on an all-India basis is around 1,576.8 thousand tonnes (TT), equivalent to roughly 22 days cover as of June 30, 2026. LPG import locations account for around 53.2% of the total tankage, followed by 31.4% at LPG bottling plants, refineries at 13.2%, and fractionators at 2.2%. The latest development comes after India faced its worst LPG shortage after the closure of the Strait of Hormuz disrupted supplies, while its consumption fell 8% to 14.74 MT from January to June.
