REUTERS, New Delhi

India’s imports of liquefied petroleum gas (LPG) from the US are set to top 1 million metric tons in June, a record high, industry sources said, as New Delhi turned to costlier suppliers to offset disruption from the Middle East.

Before the US-Israeli war on Iran and the closure of the Strait of Hormuz, India depended on Middle Eastern producers for 90 percent of its LPG imports, which totalled about 2 million tons per month.

Imports of LPG, widely used as cooking fuel in Indian households, declined to as low as 696,000 tons in April because of the strait blockade, government data showed.

The imports, however, recovered to 1.15 million tons in May, the data showed.

Before the disruption, New Delhi had planned to raise US LPG purchases to about 10 percent of total imports as part of its effort to rebalance trade with Washington.

The closure of the waterway accelerated spot buying from the US, with Indian refiners purchasing unprecedented volumes at hefty spot market premiums as the government’s priority was to maintain uninterrupted cooking gas supplies, said a trade source who is aware of the purchases.

The sources declined to be named publicly as they are not authorised to speak to the media. India also asked refiners to maximise LPG output, prioritised LPG sales to households and accelerated the rollout of piped gas connections. The efforts have already started to reduce India’s LPG consumption by 15 percent to 20 percent, one of the sources said.

India is on track to receive about 1.1 million to 1.2 million tons of US LPG in June, while supplies from the United Arab Emirates have started to recover to around 300,000 to 400,000 tons this month, two sources at Indian refiners said. The UAE offered LPG cargoes loaded from Oman’s Sohar port on a free-on-board basis at a premium of about $100 per ton to Saudi CP prices, the sources said, adding that Abu Dhabi National Oil Co deployed four to five vessels that get LPG up to Sohar port.

Indian refiners will also be getting about 45,000 tons of LPG from Kuwait in June, the sources said. The partial opening of the strait will improve LPG supplies from the Middle East in the coming months, which will help to reduce prices, the sources added.

India imported 648,300 tons of LPG from the US and 134,700 tons from the UAE in May, according to Kpler data. Imports from Iran, mainly by small players with negligible links to the US, stood at 145,000 tons, while shipments from other traditional suppliers, including Saudi Arabia, Oman and Qatar, remained limited, Kpler’s data show.

Kpler’s preliminary June data indicate India is scheduled to import about 1.07 million tons of LPG from the US, around 223,800 from the UAE, 116,200 tons from Iran and 108,600 tons from Kuwait, with some volumes expected from Oman, Saudi Arabia, Algeria, Qatar and Nigeria.