Will the Crisis End? LPG Tanker Bound for China Diverted to India; First Shipment from Iran in 8 Years

According to LSEG data, this LPG tanker was initially bound for China but has now been diverted toward India, a move expected to provide some relief to domestic supplies.

LPG Imports: Amidst a severe shortage of LPG in the country—triggered by tensions in the Middle East—a piece of relieving news has emerged. For the first time in nearly six years, an LPG cargo shipment is arriving in India from Iran. Following a 30-day waiver on oil and gas purchases granted by US President Donald Trump, India has purchased LPG from Iran for the first time since 2019.

Prior to this, in 2019, India had halted energy imports from Iran due to sanctions imposed on the nation by Western powers. According to LSEG data, this LPG tanker was originally headed for China but has now been diverted toward India, a development expected to bring some relief to domestic supply levels.

First Purchase Since 2019

Attacks on Iran by the US and Israel—and the subsequent closure of the Strait of Hormuz—have created a major energy supply crisis for India. According to the news agency Reuters, the vessel carrying the LPG cargo, named 'Aurora', is expected to arrive today at the western coastal port of Mangalore.

According to reports, the LPG cargo was procured through a trading intermediary, and payment for the shipment will be made in Indian Rupees. Furthermore, India is actively pursuing efforts to procure additional LPG cargo shipments from Iran. This specific LPG shipment is slated to be allocated among three state-owned retail companies: Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum Corporation Limited.

Payment to Iran in Rupees

Earlier on Wednesday, during a press conference, Rajesh Kumar Sinha—Special Secretary at the Ministry of Shipping—had stated that the Ministry had no information regarding the arrival of any loaded cargo shipment from Iran to India. Notably, India is the world's second-largest importer of LPG; however, for the first time in several decades, such severe difficulties regarding LPG supply have emerged. Consequently, the government has been compelled to curtail industrial and commercial gas supplies in order to prioritize domestic consumers.

Last year, India consumed 33.15 million metric tonnes of LPG, approximately 60 percent of which was met through imports. A significant portion of these imports has historically originated from countries in the Middle East. Against this backdrop, prevailing regional tensions have further exacerbated India's energy supply challenges.