The Organization of the Petroleum Exporting Countries (OPEC), in its latest monthly oil market report, has stated that the United States is expected to emerge as India's largest supplier of liquefied petroleum gas (LPG). According to OPEC, the US is projected to account for about 55 per cent of India's total LPG imports. This marks a dramatic shift in India's LPG import structure, as the Middle East Gulf region previously held the top supplier position for the world's second largest LPG consumer.
The shift is closely linked to a 2025 sales agreement between India and the United States for LPG supply. OPEC noted that the increased US supply is expected to offset some of the losses from the Middle East, where supply bottlenecks have severely restricted LPG availability in India.
West Asia Conflict Upended India's LPG Supply Chain Fast
A fresh conflict in West Asia, which began on February 28, 2026, played a significant role in accelerating India's pivot toward the United States for LPG supply. Before the conflict erupted, Washington was India's fifth largest LPG supplier as of January 2026. By February 2026, the US had already moved up to become the fourth largest supplier, replacing Kuwait in that position.
From March 2026 onward, the United States became India's top LPG supplier for four consecutive months, reflecting just how rapidly the supply landscape shifted. Data from the American Petroleum Institute, citing estimates from Vortexa, showed that India's LPG imports from the Middle East declined by approximately 85 per cent between February 2026 and June 2026. The API noted that India had only partially offset the lost flows from the Middle East by increasing imports from other countries, including more than doubling its imports from the United States.
India's LPG Import Volumes Fell Sharply in Q1 FY27
India imported roughly 2.85 million tonnes of LPG in the first quarter of FY27 on a provisional basis. This represents a 45 per cent decline year-on-year and a 34 per cent drop compared to Q1 FY25, according to data from the Petroleum Planning and Analysis Cell. The scale of the decline underlines just how severely the West Asia conflict disrupted energy flows to India.
Monthly LPG imports nearly halved during this period. Average monthly imports fell from 1.8 million tonnes per month during the April 2025 to February 2026 period, down to just 0.9 million tonnes per month during March to June 2026. India's total gross LPG tankage across the country stood at approximately 1,576.8 thousand tonnes as of June 30, 2026, equivalent to roughly 22 days of cover based on a per day consumption of 71.3 thousand tonnes. LPG import locations account for around 53.2 per cent of total tankage, followed by LPG bottling plants at 31.4 per cent, refineries at 13.2 per cent, and fractionators at 2.2 per cent. The Western Region dominates in overall storage capacity.
US LPG Exports to India Surpass All Previous Annual Records
According to data from the US Energy Information Administration, the export volume of propane and butane to India during January to May 2026 has already surpassed the total annual export volumes of both commodities recorded in any previous calendar year. The United States exported around 24,518 thousand barrels of propane to India in just the first five months of 2026, which is higher than the record shipments for the entire 2025 calendar year, which stood at 15,110 thousand barrels.
Similarly, butane shipments to India reached approximately 17,674 thousand barrels during January to May 2026, exceeding the previous annual high of 13,021 thousand barrels recorded in 2025. These figures highlight the sheer scale and speed of the supply shift away from the Middle East and toward the United States as India's primary LPG source.
India's Oil Demand Rebounds and OMCs Chase Diversification
Despite the severe disruption in LPG supply, OPEC noted that India's overall oil demand is expected to increase by about 0.2 million barrels per day year-on-year in Q3 2026. Preliminary data from the Petroleum Planning and Analysis Cell also indicates a rebound in oil demand in July 2026, following three consecutive months of declines, suggesting that the broader energy situation is beginning to stabilise.
CareEdge, in a commentary dated August 14, 2026, noted that nearly two-thirds of India's LPG imports are currently sourced from the United States. The ratings and research firm added that even after shipping routes from the Middle East normalise and supplies stabilise, the US is expected to retain a significant share of India's LPG import portfolio. This is because India's oil marketing companies are continuing to prioritise supply diversification and energy security as core strategic objectives, making the shift toward the United States more structural than temporary.
