Indian PSUs Boost US LPG Term Volumes in 2027 Amid Mideast Supply Concerns

Indian public sector undertakings Bharat Petroleum Corp., Indian Oil Corp. and Hindustan Petroleum Corp. are seeking 2.75 million metric tons of U.S. LPG for loading and delivery in 2027, up 25% from volumes sought under their previous term tender, according to a tender document dated Sept. 24.

The latest tender marks the second time the Indian PSUs have sought term U.S. LPG volumes, after their first joint tender in October 2025, which sought 2.20 million mt for 2026 delivery.

The companies are seeking four 46,000 mt very-large gas carrier cargoes of evenly split propane and butane per month for delivery on a CIF basis. They are also seeking one 45,000 mt VLGC cargo of evenly split propane and butane per month for loading on an FOB basis.

For CIF cargoes, up to 25% of the total awarded cargoes can be of non-U.S. origin. However, if fewer than four cargoes are awarded per month, all awarded cargoes must be of U.S. origin, the tender document showed.

The pricing basis for FOB cargoes will be the OPIS Mont Belvieu Non-TET monthly average for propane and normal butane for the loading month, plus a terminal fee quoted by the supplier.

The tender closes Oct. 8, with offers valid until Oct. 22.

India has traditionally relied heavily on Middle East LPG supplies, but began increasing imports of U.S. cargoes in 2025 amid the U.S.-China trade war. As tariffs restricted Chinese buyers’ access to U.S. LPG, they increasingly competed with India for Middle East cargoes, prompting Indian importers diversify their supply sources and ramp up U.S. purchases.

U.S. LPG flows to India have accelerated further since the Middle East war began in late February, as disruptions to regional exports reduced flows to Asia.

The latest tender comes as Middle East supply risks continue to weigh on the Asian LPG market, with sources noting that Indian buyers remain focused on securing alternative supply.

Vortexa data shows U.S. LPG volumes to India from the start of the year through September are estimated at 4.45 million mt, up from 1.23 million mt during the same period last year.

Monthly U.S. volumes to India rose from 180,800 mt in February to 333,700 mt in March, reaching a record 944,300 mt in July. September volumes are currently projected at 398,200 mt.

Middle East LPG flows to India, meanwhile, fell to 696,600 mt in March from 1.86 million mt in February. Monthly volumes remained below 1 million mt in subsequent months, compared with a pre-war monthly average of around 1.5 million to 2 million mt, the same data showed.

Despite India’s efforts to diversify supply sources and increase domestic production, some analysts said the country continues to face a supply shortfall, pointing to lower overall LPG import volumes.

“On average, pre-war import volumes were around 2 million mt. Since the war started, they have dropped to around 1.2 million mt. While the U.S. is a key alternative, it also supplies other key Asian markets like China and Japan, which take up huge volumes,” an analyst said.

The OPIS Mont Belvieu Delivered India assessment for an evenly split VLGC cargo — reflecting the delivered cost of U.S.-origin LPG into India — closed at $1,024.01/mt last Friday, up from $790.10/mt a month earlier.

—Reporting by Cheryl Lee, cheryl.lee@dowjones.com; Edited by Mei-Hwen Wong, mei-hwen.wong@dowjones.com