India’s LPG consumption declined 17% amid Middle Eastern supply shocks caused by Strait of Hormuz tensions, prompting the nation to diversify imports towards the US, with early signs of stabilisation but ongoing vulnerability.
India’s liquefied petroleum gas consumption fell 17% year on year between April and July 2026 to 8.8 million tonnes, as disruption in Middle Eastern supply chains continued to squeeze one of the country’s most important household fuels. Official figures show the slowdown was driven less by weaker demand than by a supply shock linked to the Strait of Hormuz, where conflict in the region has restricted vessel movements and delayed cargoes bound for India.
The strain on imports has pushed New Delhi to accelerate a shift towards the United States. In November 2025, Indian state-run oil companies agreed to import about 2.2 million metric tonnes of LPG from the US in 2026, the country’s first structured contract for American LPG and roughly 10% of annual imports. Energy analysts said the move improves supply security but also lengthens shipping routes, raising freight costs and increasing exposure to currency swings.
That diversification has not fully offset the loss of traditional Gulf supply. The American Petroleum Institute said India’s LPG imports from the Middle East fell sharply between February and June 2026, while US shipments more than doubled. The same data suggested LPG consumption had dropped markedly from February levels, with households and small businesses among the hardest hit by the tighter market.
There were, however, early signs of stabilisation in July. Consumption rose 7.5% from June to 2.35 million tonnes after the government eased restrictions on commercial LPG sales, which had been imposed earlier in the year. Even so, the underlying risk remains clear: unlike crude oil, India does not hold large strategic LPG reserves, leaving the market vulnerable to any fresh disruption in shipping lanes, freight markets or regional tensions.
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