India has resumed importing liquefied petroleum gas (LPG) from Iran for the first time in nearly eight years, aiming to mitigate shortages of this essential cooking fuel caused by the ongoing Middle East conflict.
According to persons acquainted with the situation, Indian Oil Corp. has purchased liquefied petroleum gas from Iran for the first time in nearly eight years as the nation tries to prevent a worsening scarcity of the essential cooking fuel caused by the Middle East conflict.
India’s LPG Import from Iran
The individuals, who wished to remain anonymous due to the delicate nature of the trade, stated that the refiner will split the shipment with its state-owned competitors, Bharat Petroleum Corp Ltd. and Hindustan Petroleum Corp Ltd.
According to data analytics firm Kpler, Indian Oil recently purchased LPG from Iran in June 2018, and the current cargo is roughly 43,000 tons of propane and butane.
LPG Demand and Supply Challenges in India
In India, where LPG is frequently used as a cooking fuel, that amount would barely be sufficient to supply demand for half a day. Approximately two-thirds of the nation’s supplies are imported, with 90% coming from the Middle East, mostly via the Strait of Hormuz, which has been essentially blocked since the beginning of the conflict.
Some Indians have been forced to cook with firewood due to the shortages, and there have been clashes in queue to obtain LPG cylinders. In order to expedite the construction of natural gas pipelines, New Delhi has imposed emergency measures and limited supplies to commercial users including hotels and restaurants.
US Waiver and First Purchase from Iran
Since the US granted a temporary waiver earlier this month permitting India to acquire crude oil or petroleum products from the Islamic Republic, this is the first time India has purchased energy from Iran. The market has been keeping an eye out for indications of possible customers for Iranian cargoes that were previously thought to be unaffordable because of severe US sanctions.
No additional information about the cargo or the ship transporting it was given by those who were acquainted. However, according to ship-tracking data from Kpler, the LPG carrier Sea Bird is carrying Iranian LPG and indicating that it would reach the port of Mangalore in India on Thursday.
Shipping Route and Further Shipments
When the ship crossed the strait on March 17, it had previously indicated that it was going to China before cutting off its transponder signals. A few days later, it reappeared in the Arabian Sea, sailing eastward despite the fact that Dubai was its goal.
Additionally, discussions for the safe transit of two additional LPG shipments via Hormuz are nearing completion in India. BPCL has a contract for the ships Green Asha and Green Sanvi.
BPCL, HPCL, and Indian Oil did not respond to emails for comment. India purchased its first shipment of LPG from Iran in years, according to a previous Reuters story.
Frequently Asked Questions
1) Why has India resumed LPG imports from Iran?
India is importing LPG from Iran to address the shortage of cooking fuel caused by Middle East conflicts and the blockade of the Strait of Hormuz.
2) How much LPG is India importing from Iran?
The current shipment from Iran is roughly 43,000 tons of propane and butane, which will be shared between Indian Oil, BPCL, and HPCL.
3) What challenges is India facing in LPG supply?
Two-thirds of India’s LPG supplies are imported, mostly via the Strait of Hormuz. Supply disruptions have forced some households to use firewood, and commercial users face restrictions.
4) Which ship is carrying the LPG shipment?
The LPG carrier Sea Bird is transporting the Iranian LPG and is expected to arrive at Mangalore port, India.
5) Are there additional shipments planned?
Yes, India is negotiating the safe transit of two more LPG shipments via the Strait of Hormuz on the Green Asha and Green Sanvi vessels.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice.
