How much did LPG imports fall due to Hormuz closure, and why demand may fall too

The Strait of Hormuz — the narrow waterway between Iran and Oman — is the key maritime chokepoint through which a sizeable chunk of global petroleum flows usually pass. The war in West Asia began with the US-Israeli strikes on Iran on February 28. Vessel movements through the Strait have crashed and reduced to a trickle since then — to fewer than 10 a day from 130-140 before the war erupted.

The closure has caused a major headache for various energy importing countries, including India. While the country’s crude oil and liquefied natural gas (LNG) supplies have also been impacted, LPG supplies have been impacted the most.

India depends on imports to meet about 60% of its LPG consumption, and a whopping 90% of those imports came via the Strait of Hormuz. This means that the Strait effectively saw the movement of around 54% of India’s LPG consumption. In the case of LNG imports, on which India depends to meet half of its natural gas requirement, the Strait accounted for 55-60% of the supplies. As for crude oil, about 40% came through the shipping corridor.

LPG imports halve: data

In the first 11 months of 2025-26 — April-February — India’s LPG imports averaged at about 2 million tonnes a month, according to vessel tracking data from commodity market analytics firm Kpler. In March, LPG imports crashed to 1.1 million tonnes, and dropped further to 0.95 million tonnes in April, the data shows.

India’s annual LPG consumption stands at a little over 33 million tonnes, or about 90,000 tonnes a day, with an import dependency level of 60%.

The disruption has forced India to ration LPG supplies to industrial and commercial consumers in a bid to prioritise crores of households that depend on the fuel to run their kitchens. There are over 33 crore households in India with LPG connections. As a demand management tool, the minimum gap between LPG refill bookings by households has also been increased.

Moreover, domestic refineries have been maximising domestic LPG production to partly offset the loss in imports, and refiners are scrambling for LPG cargoes from alternative geographies like the US, Australia, and Russia, among others. Through diplomatic efforts, India has also managed to get nine of its LPG tankers stuck in the Persian Gulf.

Efforts by refiners to maximise domestic LPG output have led to an increase of about 40% in India’s LPG production vis-à-vis pre-West Asia conflict levels, which means that the country’s own LPG production is now meeting roughly 55% of the demand versus 40% earlier. The supply gap, however, is still too wide to bridge.

Supply to be tight till Hormuz traffic normalises

“India is likely to continue facing tight LPG import availability in the near term. The situation remains sensitive, as disruptions to Middle East supply, India’s key sourcing region, are keeping import availability constrained. That said, as seen in March and April, India has been able to secure selective cargo movements through close coordination with Iran and Gulf producers. Several India-bound LPG vessels have successfully transited the Strait despite disruptions, offering some near-term relief,” said Sumit Ritolia, manager, modelling & refining at Kpler.

“Looking ahead, imports are expected to increase in May as diversification of LPG sourcing continues, with higher inflows anticipated from the US and Australia. However, despite this uptick and ongoing diplomatic efforts, the overall supply environment is likely to remain tight in the near term and is denting India’s overall LPG demand,” he added.

India’s annual LPG consumption stands at a little over 33 million tonnes, or about 90,000 tonnes a day, with an import dependency level of 60%. But with the disruption in flows through the Strait of Hormuz, the country’s LPG consumption has declined to about 80,000 tonnes a day, according to Petroleum Ministry estimates.

According to the latest available preliminary data released by the Ministry of Petroleum’s Petroleum Planning and Analysis Cell, India’s LPG consumption fell 16.2% year-on-year in April to 2.2 million tonnes. It was also slightly lower than March’s consumption level of 2.4 million tonnes. In March, LPG consumption had fallen 12.8% year-on-year.

On April 17, the Ministry had said that demand for LPG from households had declined significantly from the peak levels seen during the phase of panic bookings in March, and was expected to come down with the onset of summer. The seasonal dip in demand is likely to take some pressure off of LPG supplies. 

“Yes, LPG demand is expected to come down (in summer). Bookings have declined and now we are witnessing bookings in the range of 46 lakh to 50 lakh (per day), which was more than 50 lakh earlier. And the deliveries are normal,” Petroleum Ministry Joint Secretary Sujata Sharma had said on April 17. She added that the lower LPG demand during the summer season is a “natural trend”. Consumption of the fuel is higher during winters when its use for heating increases in addition to a growth in use for cooking as well.