U.S. tops India LNG, LPG supply in May

The United States became the largest supplier of liquefied natural gas and liquefied petroleum gas to India in May as shipments from Gulf countries dropped due to traffic disruptions in the Strait of Hormuz.

India imports 60% of its liquefied natural gas (LNG) and almost all of its liquefied petroleum gas (LPG) through the critical waterway, which has been disrupted since the US and Israel first struck Iran on February 28.

According to data from Kpler, Washington supplied 630,000 tonnes of LPG to India in May; This is nearly 60% more than the 380,000 tonnes the country receives from all Gulf countries combined.

The United States exported 900,000 tonnes of LNG to India in May, accounting for more than 40% of India’s total needs and a threefold increase from April, Kpler said.

Conflict in the Middle East has boosted US exports, experts said, but added that the increase was also due to broader pressure from Washington to sell more American energy to India. Even before the start of the war, the two countries were deepening their energy trade.

“Going forward, India-US energy trade will increasingly focus on gas,” Sumit Ritolia, principal research analyst at energy intelligence firm Kpler, told CNBC.

He added that the United States, “with its abundant shale gas resources and expanding export infrastructure,” is in a unique position to benefit from India’s need to diversify its gas supply.

High freight costs helped prevent the United States from gaining a meaningful share of India’s gas market before the war. However, its disconnection from the Gulf has made India more open to US gas cargoes.

Middle East LPG supply “consistently outpaces U.S. cargoes on a landing cost basis,” limiting the U.S. ability to gain market share in India, Manish Sejwal, Rystad Energy’s senior vice president of commodity markets, oil-natural gas liquids/LPG and naphtha, told CNBC in an email.

Sejwal added that by the end of June, US LPG supply to India will likely exceed the 1 million tonne mark.

In India, LPG is primarily used as cooking fuel. Supply and price are as follows It is politically sensitive and the authorities have tried to protect it. Household consumers are affected by rising global prices.

The US is the “biggest beneficiary” of the shift in India’s gas supply, according to a report by global broker Nomura on Wednesday. The report stated that Washington’s exports to New Delhi increased eightfold compared to pre-war levels.

Bineet Banka, energy equity research analyst at Nomura in India, told CNBC that Washington wants India to reduce its trade surplus with the United States and “higher energy imports may be the best way to do that.”

The bank added that importing LNG from the US is more expensive than importing it from the Gulf, but “India doesn’t have many options”.

Since the start of the Iran war, India’s currency has weakened against the dollar, partly due to the country’s rising energy import bill. India of the world third largest crude oil importer, fourth largest LNG and second largest LPG importer