New Delhi: With renewed tensions in West Asia clouding the outlook for shipping through the Strait of Hormuz, Indian refiners are increasingly turning to the spot market for cooking gas—or liquefied petroleum gas (LPG)—and liquefied natural gas (LNG) to secure supplies. More LPG is being sourced from the US, while LNG is being bought from the US, Angola, Algeria and Oman, said two people familiar with the development.
In the case of crude oil imports, the arrangements for procurement remain the same as it was before the signing of the memorandum of understanding (MoU) between Iran and the US on 18 June, even as the pact has effectively been scrapped since.
"Spot purchases continue to be dominant. The escalation and fresh disruption have put the focus back on ensuring availability," said one of people mentioned above.
Queries emailed to state-owned refiners, Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp., were not immediately answered.
India remains heavily dependent on West Asia for cooking gas; it traditionally procured about 90% of its imports from the region, with most of the supplies coming from Qatar, Saudi Arabia, the UAE and Kuwait prior to the war. However, during the war, the US emerged as the top supplier of cooking gas; it shipped 773,780 tonnes of LPG to India in June, up 19.4% from May, data from commodity analytics firm Kpler showed.
Refiners said India has been making spot purchases over and above the contracted LPG shipments. Iran was among the emerging suppliers of LPG to India after the one-month waiver on sanctions by the US. However, those supplies may now dry up as the waiver has been withdrawn by the US, said another official with a refiner.
"LPG has been greater concern, more than LNG or crude. Now, propane imports from the US are going up," the official added.
LPG used in India generally comprises 60% butane and 40% propane. West Asian exports are better suited for this, as they are primarily butane-dominated, since their LPG production is a byproduct of oil processing. On the other hand, US supplies are propane-dominated, as LPG production in the US is a byproduct of natural gas processing.
Another official with a refiner said: "It will, however, have to be seen how much LPG from the US—which is propane—can be added to the mix, as it is not a traditional fuel for cooking gas in India. Much greater dependence on the US may not be viable."
The increase in imports from the US also comes with a logistics cost: it takes about 45 days for cargo from the US to reach Indian coasts while that from West Asia takes less than a week.
India meets about 65% of its 33-million-tonne annual LPG demand through imports, footing a bill of nearly $11 billion.
In the case of LNG, availability is not much of a concern for the near term, said industry stakeholders. However, it is a seller's market with the recent rise in prices after they had declined in the past few weeks.
Rajesh K. Mediratta, managing director and chief executive officer of the Indian Gas Exchange said: "Gas availability at the moment is not a matter of concern. You just need to pay the higher prices. If one can pay around $17-18 per MMBtu (metric million British thermal unit, you would have the gas. It's an issue of pricing."
The Japan Korea marker (JKM) benchmark of LNG is around $16.6 per MMBtu, compared to $15.4 on 18 June after the US-Iran MoU.
Johan Utama, principal research analyst at S&P Global Energy, attributed the diversified procurement for the supply situation. "India, as world’s fourth-largest LNG buyer, relies heavily on Qatar and the UAE, which accounted for 59% of its imports in 2025. Despite the crisis, Indian LNG imports were only down 5% and 2% year-over-year in April and May 2026, respectively. This was achieved by successfully diversifying LNG supply sources, increasing volumes from Oman, the US, Nigeria, and Angola," Utama said.
"India is expected to retain some of this diversified LNG sourcing considerations to mitigate future disruptions, potentially influencing its long-term sourcing strategies," he said.
After the US and Iran resumed attacks last week, the Iran Revolutionary Guard Corps has declared that the Strait of Hormuz, a crucial pathway for energy trade, is shut until "US intervention in the region" continues. The US, however has claimed that the channel is under its control and the traffic is flowing normally.
Contrary to the claim, ship-tracking service, Marine Traffic on Monday tweeted: "Strait of Hormuz traffic turns defensive. Vessel activity through the Strait of Hormuz declined sharply over 10-12 July, with confirmed crossings down by around 52% week on week."
It said traffic has also shifted back toward more defensive routing patterns and the use of the Iranian and dark routes increased, while activity on the International Maritime Organization (IMO) and Omani corridors fell to minimal levels, indicating that operators continue to prioritize perceived security over more direct transit options.
Even as crude supplies are not much of a concern for India now—given that it has diversified its oil imports with most of it coming from Russia, and West Africa and South America being the other suppliers—the logistical benefit that West Asia brings is crucial.
For India, which imports about 90% of its crude oil requirements, any disruption in the Strait of Hormuz poses a significant risk. About 20-25% of its crude imports currently pass through the waterway, down from 60-70% before the conflict began on 28 February.
A spike in oil prices could fuel broad-based inflation and weigh on growth at a time when the El Niño weather phenomenon and a weaker monsoon are already expected to put pressure on the economy.
The Reserve Bank of India had last month lowered its growth forecast for the current fiscal year to 6.6% from 6.9%, citing rising risks from the West Asia conflict, elevated energy prices, supply disruptions and weather-related uncertainties.
Amid the escalating tensions, US President Donald Trump wrote on his Truth Social platform on Monday that Hormuz is open and the US Navy is reinstating the naval blockade on Iran to stop on Iran's ships and customers from entering or leaving. He further said the US would guard the strait and would be reimbursed at the rate of 20% of all the cargo crossing through the channel.
“All other countries will have fair and open use of the Strait,” he said, adding that "the process and formation will begin immediately".