India is pushing its state-owned refiners to lock in more US liquefied petroleum gas under annual term contracts for next year, part of a broader effort to reduce dependence on West Asia and support trade negotiations with Washington, according to Bloomberg. The world's biggest consumer of the cooking fuel has directed 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, people familiar with the matter told Bloomberg.
State-run refiners target 15% US term share
The government has asked 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, according to people familiar with the matter.
Earlier this year, India arranged its first-ever US term supplies, contracting about 2.2 million tons — roughly 10% of total inbound shipments, the people said. Executives from the three companies are currently in the US to negotiate LPG supply deals; the people asked not to be named because the discussions are private. The state refiners plan to jointly issue a tender for US LPG after assessing potential suppliers and offers, the people said. India's oil ministry and spokespeople for the three companies did not immediately reply to emails seeking comment, Bloomberg reported.
Cutting a 90%-plus West Asia reliance
The push to diversify follows acute shortages caused by the war in Iran, which disrupted flows through the Strait of Hormuz. The Middle East previously accounted for more than 90% of India's LPG imports, according to Bloomberg. The US has already emerged as India's top supplier of the oil product, with shipments reaching a record 3.9 million tons this year through August. However, the impasse over Hormuz and stalled US-Iran talks remain a threat to India's cooking-gas supplies, the report said.
Demand destruction: consumption plunges 16%
Supply shortages are now showing up in consumption data. LPG consumption plunged more than 16% year-on-year to 2.35 million tons last month, according to Bloomberg. As shortages persisted, households and industries shifted toward piped natural gas and more polluting fuels such as biomass and kerosene.
Trade-deal backdrop
The move to secure US term volumes will also help India narrow its trade surplus with the US as New Delhi pursues a trade deal with Washington, according to the people. The Trump administration has repeatedly sought to boost energy exports to India, one of the world's largest oil and gas importers. Trade talks between Washington and New Delhi have dragged on since last year without a deal, Bloomberg reported.
| Metric | Value | Source |
|---|---|---|
| Target US term share of India's 2027 LPG imports | At least 15% | People familiar with the matter |
| First US term supplies (earlier this year) | ~2.2 million tons (10% of imports) | People familiar with the matter |
| US LPG shipments to India this year through August | Record 3.9 million tons | Bloomberg |
| Previous Middle East share of India's LPG imports | More than 90% | Bloomberg |
| LPG consumption, last month | 2.35 million tons (down 16% YoY) | Bloomberg |
For traders and procurement teams, the key developments to track are the joint tender from the three state refiners, the progress of the Hormuz impasse and the monthly Indian LPG consumption figures that already show the strain from supply disruptions.
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