India-flagged carriers loaded with liquefied petroleum gas (LPG) were passing through the Strait of Hormuz on Monday close to the Iranian coastline, in a sign that Iran is allowing some Indian vessels to transit the world’s most vital chokepoint for energy flows.
Around 60% of Indian households rely on LPG for their primary cooking fuel, and the blockage at the Strait of Hormuz, from where 90% of all Indian LPG imports pass, has been immediately felt by consumers.
India’s LPG demand this month has already slumped by 17% from a year earlier and by 26% compared to the first two weeks of February, according to preliminary data cited by The Hindu outlet last week.
Amid the supply shortage, the Indian government has cut LPG supplies to commercial establishments and industries to have more cooking gas available for household use.
The most recent shipping data suggest that Iran has agreed to ensure passage through the Strait of Hormuz to some India-flagged vessels, especially the LPG carriers that deliver the fuel.
The very large gas carriers Jag Vasant and the Pine Gas on Monday traveled from the UAE’s coast to the Iranian islands of Qeshm and Larak, which sit on the northern section of the Strait of Hormuz, according to vessel-tracking data compiled by Bloomberg.
The signals from both vessels were that they are India-owned. Although they did not show destination, the ships are likely now heading outbound from the Strait of Hormuz toward India, according to Bloomberg.
LPG exports from the Gulf have now plunged to their lowest levels in at least 12 months, maritime intelligence firm Windward said in a Sunday note.
Over the past seven days, approximately 1.5 million barrels of LPG were loaded, with most volumes directed toward Asia, Windward said, adding that vessels are moving now to Iranian-controlled routes.
“Bulk carriers and LPG vessels are increasingly using these Iranian-controlled routes instead of traditional corridors. In most observed cases, these vessels had previously called at Imam Khomeini port, reinforcing the role of Iran in enabling selective passage,” Windward noted.
By Tsvetana Paraskova for Oilprice.com
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