US Supply May Fall Short as Alternative for India’s LPG Needs: Sources

The U.S. may fall short as an alternative source for India’s LPG imports amid the ongoing Middle East conflict, despite being the main replacement option, market sources said.

India, the largest importer of Middle Eastern LPG in Asia, has faced tightening supply since the start of the conflict. Sources said that India imports around 1.3 million to 2 million metric tons of LPG each month from the Middle East, equivalent to roughly 30 very large gas carrier cargoes.

However, a mismatch in cargo composition may limit the suitability of U.S. supply. India typically requires an evenly split propane-butane mix for residential use, while U.S. exports are largely propane-heavy.

“Traditionally, U.S. production output and exports to Asia are more propane-heavy. Most cargoes arriving in Asia are also full propane cargoes, which may pose issues when supplying to India due to insufficient butane,” an analyst said.

Data from Vortexa showed that in 2025, U.S. exports to Asia comprised 79.1% propane (29.77 million mt) and 20.5% butane (7.71 million mt), with mixed cargoes accounting for just 165,200 mt, or 0.4% of total exports. In the first three months of 2026, propane continued to dominate at 79.9% (7.66 million mt), while butane made up only 20.1% (1.93 million mt).

Sources also noted that the U.S. retains butane domestically for gasoline blending, particularly during the winter season, limiting export availability to Asia.

“Butane exports to Asia typically start to decline from August to September as gasoline blending demand picks up in the U.S. If Middle East flows do not resume by then and India relies on the U.S. as an alternative supply source, there could be a shortage of butane-rich cargoes,” another analyst said.

The Indian government has introduced measures to address the supply shortage, including issuing an order in early March to ramp up domestic LPG production, with priority given to the household sector, OPIS reported earlier.

Domestic LPG production has increased by 40%, with refineries operating at high capacity, the Ministry of Petroleum and Natural Gas said in a news release on Wednesday.

—Reporting by Cheryl Lee, clee@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com