In the month of September, the UAE emerged as the largest supplier of liquefied petroleum gas (LPG) to India. It accounted for 39 percent of India’s total imports, compared to 13 percent last month. It has overtaken the US, which had been the leading importer for the past six months. According to Kpler data, the UAE supplied 547,000 tonnes of LPG, up 182 percent from 193,000 tonnes in August.

The US remained the second-largest LPG supplier, although its shipments fell 58 percent to 323,000 tonnes compared to August. The US’s share of India’s total LPG imports was 53 percent in August, which declined to 23 percent in September. Imports from Gulf countries were hit hard in late February, following the blockage in the Strait of Hormuz due to US-Iran tensions. After this, America emerged as the largest source of LPG supply to India. Now the supply from Gulf countries has started increasing again.

These are being supplied from countries

Kpler said the physical market showed stronger-than-expected strength. The total amount of crude coming from the Gulf (excluding Iran) and coming from the west coast of Saudi Arabia and the east coast of the UAE is around pre-conflict levels (18.5 million barrels per day). But when you also include the diverted volume sent from the west coast of Saudi Arabia and the east coast of the UAE, it is now almost 100 percent. India imports 60 percent of its LPG requirements, of which 90 percent comes from Gulf countries through the Strait of Hormuz. LPG imports from Kuwait and Qatar rose marginally in September.

Kuwait was the third largest supplier with 132,544 tonnes (a 15.6 per cent increase in imports in August), followed by Qatar, which shipped 115,340 tonnes of LPG (up 76 per cent from August levels). The country has not imported any LPG from Saudi Arabia this month. India’s total LPG imports in September fell 4 percent to 1.39 million tonnes compared to the previous month. Other countries that supplied LPG in September included Iran (89,000 tonnes), Oman (23,000 tonnes), Republic of Congo (23,000 tonnes), Brunei (4,000 tonnes) and Algeria (24,000 tonnes).

Diverse supply will continue

Experts believe that even after the conflict in West Asia, India’s strategy of sourcing supplies from different sources will continue. Refiners will continue to increase supply from places other than the Gulf region (which is an important supplier of crude and LPG). Matt Wright, Kepler’s principal and chief freight analyst, said that despite a significant improvement in crude supplies from the Middle East, freight costs remain high due to continued threats to ships transiting through Hormuz. Therefore, the market is showing that a diplomatic solution is not necessary to restore physical supply, but doing without it has its own price.