India's LPG imports are likely to take a big hit this week as supplies from the Middle East face disruption due to escalating tensions in the region and shipping disruptions around the strait of Hormuz.
Several LPG time charters carrying the cooking fuel are stranded around Ras Laffan and away from the strait of Hormuz, satellite images from market analytics firm Vortexa show. Some of the state-owned very large gas carriers (VLGCs) — Shivalik, Nanda Devi, Jag Vasant — that mostly travel between India and the Middle East were waiting away from the strait of Hormuz. While another VLGC Sahyadri is arriving at Mangalore this week, Vortexa data show.
India has storage capacity for around 1mn t of LPG though there is no official data how much is in storage currently, traders told Argus. This compares with India's monthly LPG demand of 3mn t, oil ministry data show.
Middle East supply accounted for 90pc, or 21.53mn t, of India's LPG imports in 2025 despite an increase in US supplies. And 95pc of this Middle East supply goes through the straits of Hormuz, according to data from ship tracking firm Kpler.
Saudi Aramco, meanwhile, has halted operations at the 550,000 b/d Ras Tanura refinery on the Persian Gulf coast for precautionary measures after it was struck by Iranian drone debris early on Monday, according to sources with knowledge of the matter and state-owned Saudi Press Agency.
Aramco had already declared force majeure on March loadings from the Juaymah NGL facility which is part of the Ras Tanura LPG complex on 25 February. The facility supplies around 15pc of India's LPG imports.
The shutdown of the Juaymah facility had pushed up outright prices with March propane contract price and Argus Far East Index swaps trading as high as $562/t and $611/t, respectively, from $540/t and $566.5/t at Asian market close on 25 February.
Market participants had expected LPG export losses of up to 400,000t between 23 February and the end of March due to the Juaymah shutdown. The shutdown had also delayed announcement for March LPG contract prices (CPs) which were kept unchanged at $545/t for propane and $540/t butane — largely within market expectations.
Morbi demand
India's propane availability at the industrial cluster of Morbi is expected to be hit the most as it depends entirely on prompt deliveries.
Indian state-run propane suppliers in the region, including Indian oil and other suppliers, have informed users of limited propane availability below 2mn m³/d out of their total demand of 8mn m³/d.
Piped natural gas supplies from Gujarat Gas are likely to replace the propane volumes to sustain operations, traders said. Several units in the cluster may shut operations for the holi festival which falls on 3-4 March.
Propane usage in the region was at 4-4.5mn m³/d in January after Aramco increased its January propane CP to $525/t, up by $30/t from December.
India's state-run GSPC booked three spot LNG cargoes for deliveries in February this year mainly to cater to its demand in the Morbi industrial cluster.
If its term supplies from the Mideast face disruption, Gujarat Gas may also have to lower its PNG supply in the region, traders said.
