India's liquefied petroleum gas (LPG) import landscape underwent a significant transformation in September, with the United Arab Emirates (UAE) re-emerging as the primary supplier. This shift comes as shipments from the United States experienced a sharp decline, according to data from maritime intelligence firm Kpler.
Simultaneously, Oman rose to prominence as India's leading supplier of liquefied natural gas (LNG), underscoring a broader trend where geopolitical tensions are increasingly influencing global energy supply chains and sourcing decisions.
LPG Imports Rebalance Towards West Asia
In September, the UAE accounted for a substantial 39% of India's total LPG imports, a significant leap from just 13% in August. This surge allowed the UAE to surpass the United States, which had held the top supplier position for six consecutive months. The US share of India's LPG imports plummeted to 23% from 53%, with shipments falling 58% month-on-month to 323,000 tonnes.
Conversely, the UAE's LPG supplies to India soared by 182%, reaching 547,000 tonnes in September from 193,000 tonnes in August. This rebalancing suggests a recovery in Gulf supplies following earlier disruptions to shipping routes, particularly through the Strait of Hormuz, amidst regional geopolitical tensions.
While West Asian supplies rebounded, India's overall LPG imports experienced a modest 4% decline in September, totaling 1.39 million tonnes. Other Gulf nations also increased their contributions, with Kuwait supplying 132,544 tonnes (up 15.6%) and Qatar providing 115,340 tonnes (up 76%). Notably, India did not import any LPG from Saudi Arabia during this period.
Diversification Remains Crucial
India typically imports approximately 60% of its LPG requirements, with historical reliance on Gulf countries for about 90% of these imports, primarily via the Strait of Hormuz. The recent shifts highlight the inherent vulnerabilities in India's energy supply chains when exposed to geopolitical instability and shipping bottlenecks.
Despite the recovery in West Asian supplies, analysts anticipate that Indian refiners will continue to pursue diversification strategies beyond the Gulf region. This approach is deemed essential for enhancing energy security, even as West Asia remains a critical source for both crude oil and LPG. Freight costs, influenced by ongoing risks in the Strait of Hormuz, are also expected to remain elevated, further incentivizing varied sourcing.
Oman Leads India's LNG Supplies
A parallel trend was observed in India's LNG imports for September. Oman emerged as the largest supplier, providing 585,000 tonnes, which constituted 27% of India's total LNG imports – an 11.6% increase from August. In contrast, US LNG shipments to India dropped by 59% month-on-month, reducing its share to 16%, while Qatar's share also saw a notable decrease to 4.3%.
India's total LNG imports in September decreased by 14% to 2.17 million tonnes. Oman's strategic advantage lies in its export facilities at Qalhat, which are situated outside the Strait of Hormuz, offering a safer transit route for its cargoes amidst regional disruptions. However, Oman's limited export capacity means it cannot fully replace the scale of supplies historically provided by larger exporters like Qatar, highlighting the complex dynamics of global energy trade.