The United Arab Emirates has overtaken the United States as India’s biggest source of liquefied petroleum gas this month, signalling a dramatic shift in regional supply dynamics driven by trade logistics and geopolitical influences.
The United Arab Emirates has overtaken the United States as India’s biggest supplier of liquefied petroleum gas this month, underscoring how quickly West Asian flows have returned to prominence as shipping patterns shift and supply economics tighten. Data cited by Business Standard showed that the US accounted for 16 per cent of India’s LPG imports so far in September, down sharply from more than half in August, while the UAE’s deliveries rose to 212,000 barrels per day, about three times August’s level.
That reversal marks a swift change from July and August, when India leaned heavily on American cargoes after disruptions across the Gulf pushed refiners to seek alternative barrels. In July, the US supplied a record share of India’s LPG imports, and in August it remained the largest source, according to Business Standard and Livemint. By August, Algeria had also emerged as India’s third-largest supplier, highlighting how buyers have been spreading purchases more widely as tensions in West Asia persist.
Refining sources told Business Standard that the UAE’s rise has been helped by cargoes moving both through the Strait of Hormuz and via ship-to-ship transfers in Omani waters, as tracked by maritime intelligence firm Kpler. They said the turnaround reflects not only availability but also the practical advantages of shorter voyage times. West Asian cargoes can reach Indian ports in days, while shipments from the US take weeks and are generally booked months ahead.
That commercial logic matters because LPG is central to Indian household cooking demand, making both price and reliability critical. The same sources said the market has become more difficult to manage as premiums on delivered LPG cargoes to India have climbed back to near-record levels, reaching about $450 a tonne after violence intensified around the Bab el Mandeb strait. Argus reported that this forced the government to halt propane deliveries to Morbi, Gujarat’s main ceramic tile hub, where fuel costs are particularly sensitive.
The pressure is being felt across India’s refining system. Senior refining sources said the recent rise in international prices for propane and butane, which state oil marketing companies blend in equal proportions for customers, could deepen under-recoveries to record levels. India’s state fuel retailers are already absorbing losses of as much as ₹61,000 crore on LPG sales, while ICRA said the shortfall had eased to about ₹200 per 14.2-kilogram cylinder in August. According to a Mumbai-based analyst who follows Morbi’s fuel market, the situation is especially difficult for industrial users there because LPG supplies are tight and imported spot LNG remains too expensive to be a practical substitute.
The broader pattern reflects India’s effort to balance energy security with cost. Reuters and Business Standard have previously reported that India has increasingly diversified into US LPG since late 2025, including a landmark 2.2 million-tonne supply agreement for 2026. But with West Asian flows now recovering and freight economics improving, traders say the market is tilting back towards the region that has long dominated India’s cooking-fuel imports.
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