No real alternative to Middle Eastern LPG for India: S&P Global's Pulkit Agarwal

India's energy sector is closely monitoring the Strait of Hormuz for the restoration of LPG flows, as the Middle East continues to be its most reliable and essential source of supply. Pulkit Agarwal, Head of India Content at S&P Global Energy, stated that while India attempted to increase LPG purchases from alternative markets such as West Africa and the United States during recent disruptions, these sources could not fully meet the country's demand. Agarwal explained that physical constraints limit the volume of LPG India can procure from alternative markets, even from the world's largest producer, the US. Consequently, LPG imports into India have noticeably declined in recent months. A return to normal traffic through the Strait of Hormuz is expected to ease supply pressures. Agarwal noted that the recent episode has underscored India's dependence on Middle Eastern energy supplies, potentially influencing future sourcing and trading strategies for energy commodities. He added that while LNG offers greater flexibility due to its global availability from multiple regions, higher prices during the disruption led to significant demand destruction in India. Landed LNG prices remained above $16-17 per mmBtu for most of the crisis period, a level at which LNG becomes less competitive for discretionary consumers. Demand for LNG could recover if prices fall to around $11-12 per mmBtu.

“

Middle East continues to remain and today still is one of the most reliable and the only source of LPG which can supply the kind of LPG that India needs.