India’s state-run refiners have locked in their first-ever long-term deal to import U.S. liquefied petroleum gas (LPG), awarding tenders to Chevron, Phillips 66, and TotalEnergies Trading for delivery beginning in 2026—a move that marks a geopolitical and commercial break from the Middle East and a step toward appeasing Washington.
The deal covers around 2 million metric tons of LPG—some 48 very large gas carrier cargoes—jointly purchased by Indian Oil, Bharat Petroleum, and Hindustan Petroleum. It’s the first time the three refiners have banded together for long-term U.S. supply of the fuel, which is still subsidized at home. While pricing details haven’t been disclosed, the contracts give suppliers leeway to source one in four cargoes from outside the U.S., a flexibility likely designed to manage logistics and pricing swings.
India currently imports about 65% of its LPG consumption—roughly 31 million tons annually—nearly all of it from Middle Eastern suppliers such as Saudi Arabia, Kuwait, Qatar, and the UAE. The shift toward the U.S. reflects both energy security diversification and trade diplomacy: Washington’s 50% tariff on Indian goods has become a sore point for Prime Minister Narendra Modi, and buying more American energy is part of New Delhi’s effort to rebalance that ledger.
It’s also a message to Riyadh. Saudi Aramco recently cut official selling prices for propane and butane to two-year lows after India signaled plans to diversify away from Gulf dependence. For producers like Aramco and ADNOC, the loss of India’s long-term security as a captive market comes just as China’s demand has slowed.
Behind the trade shuffle lies realpolitik. Trump’s administration has pushed India to curtail Russian crude purchases, and in return, Washington has opened its export gates to U.S. LPG. For India, securing cleaner, affordable fuel while easing tariff pressure is a diplomatic two-for-one deal—one that quietly redraws the map of global LPG flows.
By Julianne Geiger for Oilprice.com
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