In a strategic move to diversify its energy sources and reduce reliance on Gulf suppliers, India is set to double its liquefied petroleum gas (LPG) imports from the United States. This decision follows a significant decline in imports from traditional Gulf exporters due to recent geopolitical tensions in the Middle East.
Background and Recent Developments
India has long depended on the Gulf region for its LPG needs, with countries like the United Arab Emirates (UAE), Saudi Arabia, and Qatar being major suppliers. However, the recent conflict in the Strait of Hormuz has disrupted these supply chains, leading to a sharp decline in imports from these nations. In response to these challenges, India has been actively seeking alternative sources to ensure a steady and secure supply of LPG.
In November 2025, Indian oil marketing companies—Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL)—signed a one-year structured contract with the US to import approximately 2.2 million metric tonnes of LPG for the 2026 contract year. This agreement was intended to account for nearly 10% of India's annual LPG requirement. The contract was finalized after extensive discussions between Indian officials and major US producers, with the Mount Belvieu benchmark price being used for the purchases.
Surge in US LPG Imports
The geopolitical unrest in the Gulf has further accelerated India's shift towards US LPG. In April 2026, India sourced its highest volumes of LPG from the US, importing 361,000 tonnes, while imports from major West Asian suppliers declined sharply. The UAE, which is India's largest LPG supplier, shipped only 163,000 tonnes until April 25, compared to 626,000 tonnes in February before the onset of the conflict.
By June 2026, the US had become India's largest LPG supplier, providing nearly two-thirds of the country's LPG imports. This shift is a direct result of the disruptions in Gulf supplies and India's proactive efforts to secure alternative sources. The increased imports from the US have not only compensated for the shortfall from Gulf suppliers but have also helped in building strategic reserves for future disruptions.
Implications for India's Energy Strategy
Doubling LPG imports from the US aligns with India's broader strategy to diversify its energy sources and enhance energy security. By reducing dependence on a single region, India aims to mitigate risks associated with geopolitical tensions and supply disruptions. The move also opens avenues for strengthening energy ties between India and the US, potentially leading to more collaborative efforts in the energy sector.
However, challenges remain. The US is the world's largest LPG exporter, but the Middle East remains the second-largest exporting region. Even if India wants to diversify, moving meaningfully away from Gulf supplies is constrained by the limited scale available elsewhere. Analysts suggest that while the US can play a significant role, Gulf exporters still have a substantial presence in the global LPG market.
Conclusion
India's decision to double its LPG imports from the US marks a significant shift in its energy sourcing strategy. While this move offers immediate relief from Gulf supply disruptions and contributes to building strategic reserves, it also underscores the need for a balanced and diversified energy portfolio. As India continues to navigate the complexities of global energy markets, such strategic decisions will play a crucial role in ensuring the country's energy security and economic stability.