The United States has become the leading supplier of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) to India in May, following significant disruptions in shipments from Gulf countries due to ongoing conflict in the Middle East and traffic issues in the Strait of Hormuz. India, which typically imports 60% of its LNG and nearly all of its LPG through this critical waterway, saw its supply chain impacted after the U.S. and Israel struck Iran on February 28, leading to a shift in sourcing strategies [1].
In May, the U.S. supplied 630,000 tonnes of LPG to India, approximately 60% more than the combined 380,000 tonnes received from all Gulf countries, according to Kpler data. U.S. LNG exports to India reached 900,000 tonnes, accounting for over 40% of India's total requirement and marking a threefold increase from April. Experts attribute this surge not only to the Middle East conflict but also to Washington's broader push to expand American energy exports to India, a trend that predates the war [1].
Sumit Ritolia, lead research analyst at Kpler, noted that the India–U.S. energy trade will increasingly focus on gas, with the U.S. well-positioned to benefit due to its abundant shale resources and expanding export infrastructure. Previously, high freight costs and competitive Middle Eastern LPG pricing limited U.S. market share in India. However, the current supply constraints have made India more receptive to U.S. cargoes. Manish Sejwal of Rystad Energy projected that U.S. LPG supply to India could exceed 1 million tonnes by the end of June [1].
A report from Nomura highlighted that the U.S. is the 'biggest beneficiary' of India's shift in gas sourcing, with exports to India growing eightfold from pre-war levels. Bineet Banka, an equity research analyst at Nomura, emphasized that while importing LNG from the U.S. is more expensive than from the Gulf, India has limited alternatives. The report also noted that the Indian currency has weakened against the dollar since the start of the Iran war, partly due to rising energy imports [1].
CONCLUSION
The U.S. has rapidly increased its share of India's LNG and LPG imports as Gulf supplies falter due to Middle East conflict. This shift has significant market implications, benefiting U.S. exporters and altering India's energy trade dynamics, despite higher costs and currency pressures for India.