India turns to US LPG, LNG as Gulf supply disruptions deepen

India is sharply increasing imports of US liquefied petroleum gas (LPG) and liquefied natural gas (LNG) as disruptions to Gulf supplies force the world's third-largest energy consumer to diversify, data from maritime intelligence firm Kpler showed.

India imported about 0.62 million of LPG from the United States in August, after taking 0.89 million tonnes in July, when US cargoes accounted for more than 73% of its LPG imports, according to Kpler.

Gulf supplies have fallen sharply following the effective closure of the Strait of Hormuz after the outbreak of war between Iran and the United States.

India's LPG imports from the United Arab Emirates fell to about 140,000 tonnes in August, while Qatar supplied around 60,000 tonnes.

Saudi Arabia supplied no LPG in July or August, Kpler data showed.

"The shift towards the US has broadly continued over the past few months, particularly for LPG," said Sumit Ritolia, senior manager - modelling at Kpler.

He said the shift was driven largely by constrained Middle Eastern supplies rather than a deliberate decision by India to replace Gulf supplies with US cargoes.

India has also increased its reliance on US LNG, with imports rising to about 750,000 tonnes in August from 720,000 tonnes in July.

Qatar, historically India's biggest LNG supplier, supplied no LNG in April, compared with as much as 1.2 million tonnes in some months previously.

India has also sourced LNG from other Atlantic Basin and non-traditional suppliers, reflecting a broader effort to secure cargoes after Middle Eastern supplies were disrupted, Ritolia said.

The shift to longer-distance suppliers is increasing import costs through higher freight, insurance and commodity prices, he said.

"India is effectively paying a premium for supply security and diversification," Ritolia said.

Russia remains top crude supplier

Russia remains India's largest crude oil supplier, with the country taking almost 2 million barrels per day of Russian crude in August, according to Kpler.

The UAE was the second-largest supplier at about 610,000 tonnes, Ritolia said.

Indian refiners typically buy crude weeks ahead, meaning any impact from potential secondary tariffs or other policy measures against Russian oil may not immediately show up in arrival data.

"We do not expect Russian imports to ease currently, given the overall global crude supply situation remains constrained," Ritolia said.

Venezuela has emerged as the more significant new source of crude for India, with imports reaching about 383,000 barrels per day in August.

However, further growth could be limited because Venezuelan crude is heavy and not all Indian refineries can process large volumes of it.

Venezuelan shipments to India have also moderated recently as more of the country's crude has moved to US Gulf Coast refiners, which are well suited to processing heavier grades.

While the Americas are becoming more important to India's crude basket, the increase is being driven primarily by Venezuelan supplies rather than a major rise in US crude imports, Ritolia said.