WLGA 2026: Diversification of Supply Key to More Resilient South Asian Market
ISTANBUL, Turkey – Speakers at the World Liquid Gas Association (WLGA) conference noted on Wednesday a need for greater diversification, supply security and collaboration, as resilience now outweighs pure efficiency.
Geopolitical disruptions have caused an upheaval of global trade flows in 2026 with greater reliance placed on securing tonnage from further afield for many buyers in Asia, according to speakers at the Structural Shifts and Resilience in Asian liquefied petroleum gas (LPG) Markets session.
Given the proximity of the Middle East to buyers across south, southeast and even northeast Asia, the need to source from the U.S. and other regions has resulted in greater costs, as well as bringing additional logistical headaches and constraints, which ultimately have resulted in demand destruction.
India and Bangladesh have actively sought new suppliers this year, including the U.S., Argentina, Africa and Australia to mitigate risks and ensure there is product available.
Sri Lankan buyers have tried to leverage their geographic position and explore new business models, to enhance resilience, Laugfs Gas vice-chairman Mithila Wegapitiya said.
Panellists from India, Sri Lanka and Bangladesh all agreed they would accept higher costs and longer voyage times for greater security of supply, noting that the trauma of recent supply shocks will have a lasting memory, making a full return to pre-crisis sourcing patterns unlikely.
Indian Oil Corp. (IOC) country head Niraj Nimje noted the shift away from the Middle East to the U.S., moving away from a 90/10 split with the U.S. supply making up over 50%. However, Nimje added that Indian market is evolving with diversification but its proximity to the Middle East cannot be ignored.
Butane makes up a significant portion of buying in India, Sri Lanka and Bangladesh that makes the Middle East more valuable, as the U.S. is a predominantly propane market, and so sourcing butane from the U.S. is not the most cost effective.
Demand destruction has followed the war in the Middle East, with countries implementing moderation strategies such as capping refill slots and encouraging shifts to other fuel sources like liquefied natural gas (LNG). This has particularly been the case in India where there has been a shift to increase domestic production of LPG by 60-65%, or around 54,000 metric tons/day, Nimje said.
Bangladesh has faced logistical constraints given the size of its ports. United Aygaz director Rayeesa Jameel noted that the country is constrained by its geography with access to ports capped to small vessels with no deep sea ports, just river terminals.
Bangladesh is one of the fastest growing markets in the world with demand reaching around 1.55 million mt/year in 2026, Rayeesa added. Comparatively, demand in the country was around just 18,000 mt/year in 2013. When it comes to supply, the country has made steps to diversifying its portfolio with new partnerships with Tanzania.
“As much as we would want to switch back to the Middle East for 100% supply we have to learn from this …. don’t put all your eggs in one basket,” said Rayeesa.
LPG affordability is also a problem with no government subsidies available unlike those for natural gas.
Sri Lanka is also feeling the cost of diversifying away from the Middle East but taking a position is a sensible call in the mid-term, as Argentina and Brazil are also optional sources, Wegapitiya added.
“When you look at the shipping orderbooks, you’d expect a stabilization in freight rates ahead which will make things easier,” he said.
Unlike Bangladesh, Sri Lanka has deep seaports with around 30,000 mt in storage capacity and is geographically located in an active shipping lane which opens up greater flows from further afield.
Liquid Gas Week was organized by the WLGA in Istanbul, Turkey, and held from Oct. 12 through Oct. 16.
Reporting by Jamie Aldridge, jaldridge@opisnet.com; Editing by Rob Sheridan, rsheridan@opisnet.com