The United States has become India's largest supplier of both liquefied natural gas and liquefied petroleum gas, after disruptions to the Strait of Hormuz cut shipments from Gulf nations, according to CNBC.
American gas exports to India have grown eightfold from pre-war levels as Strait of Hormuz traffic remains choked
Bloomberg / Getty Images
The United States has become India's largest supplier of both liquefied natural gas and liquefied petroleum gas, after disruptions to the Strait of Hormuz cut shipments from Gulf nations, according to CNBC.
India imports 60% of its LNG and nearly all of its LPG through the strait, which has faced traffic disruptions since U.S. and Israeli strikes on Iran began on Feb. 28. In May, the U.S. supplied 630,000 tonnes of LPG to India — about 60% more than the 380,000 tonnes India received from all Gulf countries combined, according to data from energy intelligence firm Kpler. American LNG exports to India reached 900,000 tonnes in May, covering more than 40% of the country's total requirement and representing a threefold increase from April.
U.S. exports to India have grown eightfold from pre-war levels, according to a report from global brokerage Nomura. Bineet Banka, equity research analyst for energy at Nomura in India, said that Washington wants India to narrow its trade surplus with the U.S., and that higher energy imports may be the most effective way to do so. Importing LNG from the U.S. costs more than sourcing from the Gulf, Banka added, but "India doesn't have many options."
Before the war, high freight costs kept U.S. gas from gaining a meaningful foothold in India. Manish Sejwal, senior vice president of commodity markets at Rystad Energy, said that Middle Eastern LPG had long undercut U.S. cargoes on a landed-cost basis, limiting American market share. Being cut off from Gulf supply has shifted that calculus.
Sumit Ritolia, lead research analyst at Kpler, said that U.S. gas exports to India will focus more on gas going forward, citing America's shale resources and expanding export infrastructure as factors that position it to meet India's need for supply diversification.
LPG serves as a primary cooking fuel for Indian households, making its supply and price politically sensitive. India is the world's third-largest crude oil importer, its fourth-largest LNG importer, and its second-largest LPG importer. Since the start of the Iran conflict, the Indian rupee has weakened against the dollar, in part because of the country's rising energy import bill.
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