India Seeks More US LPG to Cut Mideast Reliance, Aid Trade Deal

(Bloomberg) — India’s state-owned refiners are in talks to secure more US liquefied petroleum gas under annual contracts for next year as the world’s biggest consumer of the cooking fuel seeks to diversify imports.

The government has asked Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. to source at least 15% of India’s 2027 LPG imports through US term contracts, according to people familiar with the matter. The South Asian nation arranged its first ever US term supplies earlier this year, contracting about 2.2 million tons, or 10% of its total inbound shipments.

Executives from the three companies are in the US to negotiate LPG supply deals, the people said, asking not to be named because the discussions are private. The move will help India widen its supply pool and narrow its trade surplus with the US as New Delhi pursues a trade deal with Washington.

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The push to reduce reliance on the Middle East, which previously accounted for more than 90% of India’s LPG imports, follows acute shortages as the war in Iran disrupted flows through the Strait of Hormuz. The US has already emerged as the country’s top supplier of the oil product, with shipments reaching a record 3.9 million tons this year through August.

The state refiners plan to jointly issue a tender for US LPG after assessing potential suppliers and offers, the people said. India’s oil ministry, and spokespeople for the three companies didn’t immediately reply to emails seeking comments.

The Trump administration has repeatedly sought to boost energy exports to India, one of the world’s largest oil and gas importers. Trade talks between Washington and New Delhi have dragged on since last year without a deal.

Meanwhile, the impasse over Hormuz and stalled US-Iran talks remain a threat to India’s cooking-gas supplies. LPG consumption plunged more than 16% year-on-year to 2.35 million tons last month, as shortages pushed households and industries toward piped natural gas and more polluting fuels such as biomass and kerosene.

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