The United States is expected to become India's top liquefied petroleum gas (LPG) supplier, replacing the Middle East Gulf (MEG) and accounting for more than half of inbound shipments to the world's second-largest consumer of the commodity, according to OPEC's latest monthly oil marketing report. "In line with a 2025 sales agreement between India and the US for LPG, the US is expected to emerge as India's largest LPG supplier, accounting for about 55 per cent of India's imports," the report stated. This is expected to offset some of the losses from the Middle East due to supply bottlenecks that severely restricted LPG demand in the country, OPEC added.
OPEC outlook: US share to hit 55%
OPEC projected India's oil demand will increase by about 0.2 million barrels per day (mb/d) year-on-year in Q3 2026. Meanwhile, preliminary data from the Petroleum Planning & Analysis Cell (PPAC) indicates a rebound in oil demand in July after three months of consecutive declines, OPEC noted.
The 55 per cent import share forecast reinforces a rapid realignment of India's LPG sourcing. According to CareEdge's August 14 commentary, nearly two-thirds of India's LPG imports are currently sourced from the United States. "Even after shipping routes normalise and supplies from the Middle East stabilise, the US is expected to retain a significant share of India's LPG import portfolio as oil marketing companies (OMCs) continue to prioritise supply diversification and energy security," CareEdge said.
India's LPG imports: sharp contraction
India imported roughly 2.85 million tonnes (mt) of LPG in Q1 FY27 on a provisional basis, a 45 per cent decline year-on-year and 34 per cent against Q1 FY25, as per PPAC data. Monthly flows 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, CareEdge added.
Domestic storage capacity remains concentrated at import locations. India's total gross LPG tankage on an all-India basis stood at around 1,576.8 thousand tonnes (TT), equivalent to roughly 22 days' cover (based on per-day consumption of 71.3 TT), as on June 30, 2026. LPG import locations account for around 53.2 per cent of total tankage, followed by LPG bottling plants (31.4 per cent), refineries (13.2 per cent) and fractionators (2.2 per cent), with the Western Region dominating capacity.
| Tankage segment | Share of total gross LPG tankage |
|---|---|
| Import locations | 53.2% |
| LPG bottling plants | 31.4% |
| Refineries | 13.2% |
| Fractionators | 2.2% |
US export surge: propane and butane records
US export data confirms the scale of the pivot. According to the US Energy Information Administration (EIA), export volumes of propane and butane to India during January–May 2026 have already surpassed annual export volumes of both commodities in any past calendar year. The US exported around 24,518 thousand barrels of propane to India during January–May 2026, higher than the record shipments in the entire 2025 calendar year (15,110 thousand barrels). Butane shipments to India totalled around 17,674 thousand barrels in the first five months of the calendar year, against the previous annual high recorded in 2025 at 13,021 thousand barrels.
| Commodity | Jan–May 2026 shipments to India | 2025 full-year record |
|---|---|---|
| Propane | 24,518 thousand barrels | 15,110 thousand barrels |
| Butane | 17,674 thousand barrels | 13,021 thousand barrels |
Washington was India's fifth-largest LPG supplier until January 2026, and jumped a spot to fourth a month later, replacing Kuwait. The fresh conflict in West Asia from February 28 propelled the North American country to become the top supplier to the world's second-largest LPG consumer for four consecutive months beginning March 2026, the article reported.
Supply disruptions and demand response
The American Petroleum Institute (API), in a July 6 energy insight based on estimates from Vortexa, said India's LPG imports from the Middle East declined around 85 per cent from February 2026 to June. "India has partially offset the lost flows from the Middle East by increasing imports from other countries, including more than doubling imports from the United States," API said. The institute also pointed out that India sharply reduced LPG consumption, as alternative supplies have only partially offset disrupted flows from the Middle East.
For commodity traders and procurement teams, the divergence between US and Middle East supply routes is now a central variable in Indian LPG pricing and logistics planning. With the US assuming a roughly 55 per cent share of imports per OPEC's projection, Atlantic basin cargo economics, US Gulf Coast export terminal capacity and West Asian shipping routes will continue to drive the arbitrage for Indian buyers, according to the report's data points.
Sources:
