India eyes first US LPG deal as trade war shifts global fuel supply routes

RoydadNaft – India is moving to secure its first long-term liquefied petroleum gas (LPG) contracts from the United States, Bloomberg reported. The move comes as Washington’s trade tensions disrupt the global supply of LPG, a key fuel for cooking and an important raw material for plastics.

According to a tender document reviewed by Bloomberg, Indian state-owned oil companies plan to buy up to three very-large gas carriers of LPG each month in 2026, sourced from the US. These companies supply LPG to over 331 million households, with more than 60 per cent of the demand met through imports.

Traders said that this was the first time India was looking for a long-term arrangement with US suppliers. The move follows New Delhi’s commitment to increase US energy purchases.

Impact of US-China trade war

India’s interest in US LPG comes as the US-China trade conflict reshapes global energy flows. LPG has been hit by the rising tariffs between the two largest economies. China, which previously bought heavily from US shale producers, has shifted towards West Asia suppliers and often trades its US cargoes at a discount, Bloomberg reported.

In response, major suppliers in West Asia such as Saudi Arabia are cutting prices to protect their market share in Asia, including India. Traders said Saudi Aramco has also informed customers that its future contract pricing will be more closely linked to Asian benchmarks.

India boosts US oil purchases

Alongside LPG, India has sharply increased its crude oil purchases from the US in recent months. Shipments loaded in US ports for Indian delivery averaged 398,000 barrels per day (bpd) in August and 341,000 bpd in September 2025. This marks a steep rise from 254,000 bpd in June and 166,000 bpd in July, according to maritime intelligence firm Kpler.

Crude loadings represent volumes picked up from a producing country’s ports, with US cargoes typically taking around two months to reach Indian refineries.

Russia dominates Indian imports

Despite pressure from the West, Russia continues to be India’s largest oil supplier. India-bound Russian oil loadings stood at 1.5 million bpd in August and September, only slightly lower than June and July levels of 1.6 million bpd and 1.7 million bpd, respectively.