India Buys First Iranian LPG Cargo Since 2019 As U.S. Eases Sanctions Amid Supply Crisis

India has bought its first cargo of liquefied petroleum gas (LPG) from Iran in years after the United States temporarily eased sanctions on Tehran’s oil and fuel exports.

The shipment is expected to arrive soon at the west coast port of Mangalore, according to trade data and industry sources.

India had stopped buying energy from Iran in 2019 due to Western sanctions. Data shows the tanker carrying this LPG cargo was earlier headed to China before changing its route.

The vessel passed through the Strait of Hormuz, where shipping has been affected by the ongoing conflict involving the US, Israel and Iran.

The cargo is being transported on a sanctioned tanker and is estimated at about 43,000 tonnes of propane and butane.

It is expected to be shared by three state-run fuel retailers, Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited.

Sources said the cargo was bought through a trader and payment will be made in rupees. India is also looking at buying more LPG from Iran.

At the same time, a senior official from the shipping ministry said he had no information about any Iranian cargo being loaded for India.

India is the world’s second-largest importer of LPG and is currently facing a serious supply shortage. The country used 33.15 million metric tonnes of LPG last year, with about 60% coming from imports. Nearly 90% of those imports are sourced from the Middle East.

The current cargo is small compared to demand and can meet only about half a day’s requirement. Supply problems have led the government to cut LPG supply to industries to make sure households continue to get cooking gas. In some places, delays in cylinder supply have been reported.

Several Indian LPG tankers, Shivalik, Nanda Devi, Pine Gas and Jag Vasant, were stranded near the Gulf region but are now being moved. India is also loading LPG onto empty vessels in the Persian Gulf to improve supply.

There are also ongoing talks to move more LPG cargoes safely through the Strait of Hormuz. Two vessels, Green Asha and Green Sanvi, are linked to these plans.

References: Bloomberg, India Today