India may only have up to 10 days of LPG stocks to cover demand and the country is scrambling for cargoes outside of the Mideast Gulf as the Iran-US conflict has effectively dried up exports from the region, according to market participants.
Limited terminal capacity in India has put a cap on the country's stockpiling while its reliance on LPG imports to meet booming consumption has increased in recent years, market participants said.
Every country in southeast Asia as well as India are looking for evenly split ratio cargoes, a trader said, as exports via the strait of Hormuz have effectively stopped.
The threat level in the strait has been raised after attacks on commercial vessels while major protection and indemnity (P&I) clubs' re-insurers have cancelled their war risk coverage in certain areas of the Mideast Gulf and the Gulf of Oman, leading to a de-facto closure of the waterway.
India imported 23.3mn t of LPG in 2025, up by 8.4pc from 2024, Kpler data showed, while domestic production was around 12.8mn t in fiscal year 2023-24 — the latest available data.
In June last year, fears of supply disruption following the 12-day conflict between Israel and Iran prompted India's top importers to diversify their supply sources, cutting imports from the Mideast Gulf to around 70pc currently from around 99pc in 2024. India signed term contracts to buy 2.2mn t of US LPG this year, which accounts for around 10pc of the country's LPG import needs. But the bulk of its supply from the Mideast Gulf is at risk and alternative sources are unlikely to be found immediately, which could push India to look into LPG rationing as a demand-management strategy. US president Donald Trump said the US-Iran conflict could last four weeks or more.
Market participants expect spot tenders from India to be issued soon. A tender issued by Indian importer HPCL on 25 February for up to 20,000t of flexible ratio to be delivered every month over March to December on a cfr basis would provide the first public indication of delivered premiums against the CP. The tender closes today, with results expected tomorrow.
Meanwhile, 46,000t propane cargoes for delivery to Ningbo in first-half April were assessed at the equivalent of April CP +$254.75/t on 3 March, compared to $98.5/t a week ago.
