In the wake of the Middle East conflict, India’s liquefied petroleum gas (LPG) imports fell sharply this month, falling to almost half of February levels and extending the decline seen in March, according to shipping data. At the same time, domestic production is down about 10 percent from its March peak, making overall supply even tighter.Ongoing disruptions to energy flows from the Gulf linked to the US-Iran war are destabilizing global oil and gas markets, and the ceasefire for nearly a week has done little to improve the availability of cooking gas.
Where is India getting LPG from?
The United States has emerged as India’s largest LPG supplier so far this month, contributing 142,000 tonnes or 27 per cent of total imports of 523,000 tonnes. The United Arab Emirates supplied 141,000 tonnes, followed by Saudi Arabia with 92,000 tonnes, Qatar with 82,000 tonnes and Kuwait with 11,000 tonnes. Imports from Iran rose by 11,000 tonnes to 43,000 tonnes in March, while Argentina supplied 10,000 tonnes, an unusual contribution.Read this also Loading Oil price shock: How India’s strong economic fundamentals will cushion this shock – explained in chartsKpler data cited in the ET report shows that LPG imports averaged about 37,000 tonnes per day between April 1 and 14, largely unchanged from March, but significantly lower than February’s peak of 73,000 tonnes per day.“LPG is where the real tightness is,” said Nikhil Dubey, senior research analyst at Kpler. “Supply is expected to remain constrained, with very few substitutes available in the market outside Middle East Gulf producers. We are already seeing some changes in trade flows, but replacement options are inadequate to offset the shortfall.”Before the conflict, Gulf countries accounted for about 54 per cent of India’s LPG consumption. While India has managed to move nine LPG carriers out of the Persian Gulf through the Strait of Hormuz, heavy dependence on Gulf producers is limiting its ability to increase supplies. Industry officials said most global LPG volumes are tied up in long-term contracts, of which only 10 percent is available in the spot market, leaving limited space to secure additional cargo even at higher prices.Read this also For the first time in 7 years! Just before Trump’s waiver ends, India will get 4 million barrels of crude oil from Iran.
