India now sources 67% of its liquefied petroleum gas (LPG) from the United States, Petroleum Minister Hardeep Singh Puri said last week. That marks a sharp rise from an earlier target of about 10%. The shift follows an almost 85% fall in India's LPG imports from West Asia between February and June 2026, driven by disruptions in the Strait of Hormuz.

Why has India's LPG sourcing shifted so sharply toward the U.S.?

  1. Sharp Fall from West Asia: India's LPG imports from West Asia fell almost 85% between February 2026 and June, per data from Vortexa.
  2. Long-Term U.S. Deal: State-run refiners signed a long-term deal for 2.2 million tonnes of U.S. LPG in 2026 as part of crisis management.
  3. Rising U.S. Volumes: India's LPG imports from the U.S. reached 0.77 million metric tonnes in June alone.
  4. Hormuz Exposure: Nearly 90% of India's West Asian LPG normally passes through the Strait of Hormuz, making that route highly exposed to disruption.

What risks and costs does greater reliance on U.S. LPG carry?

  1. History of Sanctions: The U.S. has historically used financial sanctions, export controls, and technology restrictions as foreign-policy tools, including in cases involving Iran, Iraq, Cuba, North Korea, Russia, and Venezuela.
  2. The Graham Act, 2026: The proposed Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 would impose tariffs of up to 100% on the top five buyers of Russian oil and gas, a barrier that could affect Indian buyers.
  3. Less Predictable Supply: Unlike West Asian supplies, which largely rest on long-term Strategic Partnership Agreements, U.S. energy exports could be swayed more easily by trade and political considerations.
  4. Longer Shipping Times: U.S. shipments take 25-35 days to reach India, compared with 5-10 days from the Gulf, reducing India's proximity-pricing advantage.
  5. Widening Under-Recoveries: If domestic LPG prices are held down while global prices rise and the rupee depreciates, oil marketing companies' under-recoveries widen, adding to fiscal and external-sector strain.
  6. ₹59,000 Crore Burden: The government told Parliament that the accumulated under-recoveries of public-sector oil marketing companies stood at over ₹59,000 crore as of July 31, 2026.

How has India responded on the supply side?

  1. Maximising Refinery Output: Refineries have been directed to maximise LPG output by diverting propane, butane, and other streams into the LPG pool.
  2. Production Growth: LPG production rose 35.73% year-on-year to 4.26 million metric tonnes (MMT) in the first quarter of FY27.
  3. Crisis-Peak Ramp-Up: At the peak of the crisis, public-sector oil marketing companies raised their cumulative daily LPG production from 34,000 tonnes to 55,000 tonnes.
  4. Still Trailing Demand: Even so, LPG production of 4.3 MMT in Q1 FY27 still trailed consumption of 6.5 MMT in the same quarter.
  5. The Australian Option: Australia offers a shorter shipping route than the U.S. and lies outside the Strait of Hormuz, but its export volumes are much smaller.

Conclusion

Energy security is not about replacing one supplier with another; it is about ensuring that no single country holds all the leverage. India must strengthen local production, diversify its supply chains further, and build larger strategic reserves.

Mains Angle

GS Paper III — Infrastructure and Energy: India's energy security and import dependence. Practice question: India's LPG imports from the U.S. have risen to about two-thirds of its total requirement. Examine the risks this poses to India's energy security and suggest measures to diversify supply. (250 words)