Virendra Pandit
New Delhi: The United States is likely to become India’s top liquefied petroleum gas (LPG) supplier, replacing the Middle East Gulf (MEG), accounting for more than half of the inbound shipments of the world’s second-largest consumer of the commodity, the media reported on Monday.
OPEC, in its latest monthly oil marketing report, said, “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.”
This may offset some of the losses from West Asia (the Middle East) due to supply bottlenecks that severely restricted LPG demand in the country, it added.
India’s oil demand will increase by about 0.2 million barrels per day (mb/d), y-o-y, in Q3 2026. Also, preliminary data from the PPAC indicates a rebound in oil demand in July after three months of consecutive declines, OPEC added.
India imported approximately 2.85 million tonnes (mt) of LPG in Q1 FY27 on a provisional basis, a 45 per cent decline y-o-y and 34 per cent against Q1 FY25, as per Petroleum Planning & Analysis Cell (PPAC) data.
CareEdge, in an August 14 commentary, said that currently, nearly two-thirds of India’s LPG imports are 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,” it added.
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, it added.
India’s total gross LPG tankage on an all-India basis is around 1576.8 thousand tonnes (TT) which is equivalent to roughly 22 days cover (per day consumption being b71.3 TT), as on June 30, 2026.
LPG import locations account for around 53.2 per cent of the total tankage followed by 31.4 per cent at LPG bottling plants, refineries (13.2 per cent) and fractionators (2.2 per cent). Western Region dominates in capacity.
American pivot
According to the US EIA data, the export volume of propane and butane to India during January-May 2026 has already surpassed annual export volumes of both commodities in any past calendar year.
The United States exported around 24,518 thousand barrels of propane to India during January-May 2026, which is higher than the record shipments in the entire 2025 calendar year (15,110 thousand barrels). Similarly, butane shipments to India totalled at around 17,674 thousand barrels during the first five months in the current calendar year, against the previous annual high recorded in 2025 at 13,021 thousand barrels.
Washington, which was India’s fifth largest LPG supplier till January 2026, jumped a spot to become the fourth largest, replacing Kuwait a month later. However, the fresh conflict in West Asia (since February 28) propelled the North American country to become the top supplier to world’s second largest LPG consumer for four consecutive months, beginning March 2026. The American Petroleum Institute (API) in a July 6 energy insight said that based on estimates from Vortexa, 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,” it added. The noted institute also pointed out that India sharply reduced LPG consumption, as alternative supplies have only partially offset disrupted flows from the Middle East.