India LPG imports may decline sharply this week. Rising tensions in the Middle East have disrupted shipping routes near the Strait of Hormuz. As a result, several LPG cargoes are stranded.
According to market analytics firm Vortexa, multiple India LPG imports vessels are waiting near Ras Laffan. Some ships are avoiding the Strait of Hormuz due to safety concerns. This situation may delay deliveries to India.
VLGCs Stranded Near Strait of Hormuz
Several Indian state-owned very large gas carriers (VLGCs) are impacted. These include Shivalik, Nanda Devi, and Jag Vasant. These vessels regularly transport cooking gas between India and the Middle East. However, they are currently waiting away from the Strait of Hormuz.
Meanwhile, another VLGC Sahyadri is expected to arrive at Mangalore this week.
Since 95% of Middle East LPG cargoes pass through the Strait of Hormuz, the disruption creates serious supply concerns.
India’s LPG Storage vs Demand
India has LPG storage capacity of around 1 million tonnes. However, the current storage level remains unclear.
In comparison, India consumes about 3 million tonnes of LPG every month. This gap raises concerns if supply delays continue.
Middle East suppliers account for nearly 90% of India’s LPG imports. In 2025 alone, India imported 21.53 million tonnes from the region. Although US supplies have increased, dependence on the Middle East remains high.
Saudi Aramco Halts Ras Tanura Operations
The situation worsened after Saudi Aramco halted operations at the Ras Tanura refinery. The 550,000 barrels per day refinery stopped operations as a precaution after Iranian drone debris struck the site.
Earlier, Aramco had already declared force majeure on March LPG loadings from the Juaymah NGL facility. This facility forms part of the Ras Tanura LPG complex and supplies nearly 15% of India’s LPG imports.
Due to this shutdown, propane prices surged. March propane contract prices rose to $562 per tonne. Argus Far East Index swaps climbed to $611 per tonne. Previously, prices were trading near $540 per tonne.
Market participants estimate export losses of up to 400,000 tonnes between late February and March-end.
Morbi Industrial Cluster Faces Propane Shortage
The impact may be strongest in Morbi, Gujarat. The industrial cluster depends heavily on prompt propane deliveries.
State-run suppliers have informed users about limited propane availability. Current supply stands below 2 million cubic meters per day. However, total demand is around 8 million cubic meters per day.
To manage the shortage, piped natural gas (PNG) from Gujarat Gas may replace some propane volumes. Additionally, several units may shut temporarily during the Holi festival on 3–4 March.
In January, propane usage in Morbi stood at 4–4.5 million cubic meters per day. This followed Aramco’s January propane contract price hike to $525 per tonne.
India’s state-run GSPC also booked three spot LNG cargoes in February. These cargoes were mainly meant to meet Morbi’s demand.
However, if Middle East term supplies remain disrupted, PNG supply may also face pressure.
