Indian state-run oil marketing companies are ramping up LPG imports from the US, over and above their term contracts on the persisting conflict in the Middle East which has curbed ship movements around the strait of Hormuz.
State-run BPCL and IOC have made spot LPG purchases this week for May and June loadings at US Mont Belvieu prices at a premium of 47¢ per gallon and in the low-20s¢ to high-30s¢ per gallon, respectively, traders with knowledge of the matter told Argus.
These firms have been deploying Indian LPG time charters for the shipments, some of which transited the strait of Hormuz earlier this month.
Owing to lower clarity of LPG availability in the Middle East region, Indian OMCs are deploying more of their ships towards the Atlantic coast.
BPCL will load two 46,000t evenly split LPG cargoes onto BW Global United LPG and Global United Shipping India joint venture BW Global United LPG-owned BW Chinook and shipping firm Great Eastern Shipping-owned Jag Vasant on 30-31 May.
These vessels are likely to reach India by early to mid-July because the voyage takes close to 30 to 45 days.
These bookings were part of a spot deal with BW LPG Product Services (BWPS), the in-house trading arm of Oslo-listed BW LPG and refiner Marathon, traders said.
BPCL is also set to load another cargo onto BW Global United LPG-owned BW Tyr on 9-10 June, while state-run IOC will also load another very large gas carrier (VLGC) on 4-6 June, traders added.
Among these vessels, Jag Vasant and BW Tyr were among the nine LPG carriers that were stuck in the Mideast Gulf because of the US/Israel-Iran war and made a transit via the strait of Hormuz around late March and this month.
IOC, BPCL and HPCL signed their first LPG supply contracts with the US for 2026 for 2.2mn t of LPG imports from the US Gulf coast, which will meet around 10pc of India's annual requirements.
As part of the deal, IOC, BPCL and HPCL will receive one VLGC shipment each month this year from the US on a delivered basis, totalling 1.65mn t, from Chevron, Phillips 66 and TotalEnergies. The Indian refiners are expected to issue another import tender to make up the remaining target, market participants said.
India has already diversified its LPG imports, with shipments coming from Iran and Russia alongside increasing domestic output.
LPG production from domestic refineries has ramped up by 40pc, bringing daily LPG output to 50,000 t/d currently against a total daily requirement of around 80,000 t/d, an oil ministry note said.
