West Asia Crisis Raises Risk Of LPG Shortage For Indian Households

India, the world’s second-largest LPG importer, sources more than 90% of its LPG from the Middle East, according to data intelligence firm Kpler, as cited by Bloomberg. A prolonged disruption around the Strait of Hormuz has trapped cargoes, raising the risk of supply constraints for domestic consumers.

People familiar with the matter told Bloomberg that LPG shipments scheduled for March need to start moving within days to prevent shortages. They requested anonymity as they are not authorised to speak to the media.

A government official said on Tuesday that India’s LPG inventories can last nearly 30 days, according to Bloomberg.

Limited Alternative Supplies

India has entered into a long-term supply agreement with the U.S. to reduce reliance on the Gulf region, Bloomberg reported. However, volumes under that arrangement remain significantly lower than imports from West Asia. Traders told Bloomberg that even spot purchases from the U.S. would not reach India before April, while freight rates are higher and vessel availability is constrained.

Kpler analyst Sumit Ritolia told Bloomberg that India has limited flexibility in sourcing LPG from alternate suppliers. He said incremental volumes could potentially be secured from the U.S., Russia or Argentina, but availability would depend on freight economics and global spot supply.

Broader Energy Impact

Bloomberg reported that Indian refiners met government officials after recent attacks in West Asia to review contingency plans. The region accounts for nearly two-thirds of India’s liquefied natural gas (LNG) imports and close to 50% of its crude oil supplies.

Petronet LNG, India’s largest LNG importer, has declared force majeure on Qatari supplies, resulting in nearly 50% reduction in flows to clients, according to Bloomberg.

India currently holds nearly eight weeks of commercial and strategic crude and product inventories, Bloomberg reported. The oil ministry said on Tuesday that it was “reasonably comfortable in terms of stocks” and expressed optimism that measures could mitigate disruptions.

If supply constraints persist, refiners may have to adjust processing rates or review export commitments, according to Bloomberg. The situation remains dependent on developments in West Asia and the movement of cargoes through key shipping routes