India Purchases Iranian LPG Cargo After Years of Sanctions

India restarts Iranian LPG imports to mitigate a domestic gas shortage, with the cargo shared among major state retailers and payments planned in rupees. Disruptions near the Strait of Hormuz continue to spur diversification of supply and route adjustments.

India has quietly resumed purchases of Iranian liquefied petroleum gas, with a sanctioned shipment headed for Mangalore. LSEG trade data and three industry sources said the cargo marks India’s first Iranian LPG import in several years, enabled after the United States briefly lifted sanctions on Tehran’s crude and refined fuel exports.

The move comes as India, the world’s second-biggest LPG importer, deals with a severe gas squeeze. Government authorities have reduced LPG supplies to industries so households do not face cooking gas shortages. India used 33.15 million metric tons of LPG last year, and imports provided about 60% of that demand.

India Iranian LPG imports and shifting supply sources

Officials say India still relies heavily on Middle Eastern suppliers, which provided around 90% of its LPG imports last year. At the same time, India has faced disruption to energy flows through the Strait of Hormuz, linked to the U.S.-Israeli war with Iran, forcing planners to search for alternative sources and routes.

The incoming Iranian LPG shipment is being carried by the tanker Aurora, which is under sanctions, according to LSEG data and industry sources. The vessel was first scheduled to discharge in China but changed course and is now expected to dock at the west coast port of Mangalore shortly, the sources added.

India Iranian LPG imports, cargo sharing and payments

Sources said the Iranian LPG cargo was purchased from a trader rather than directly from Iran. The load will be divided among the three main state fuel retailers, Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp. Payment is expected in rupees, and India is assessing options to secure additional Iranian LPG parcels.

Official acknowledgement of these flows remains limited. At a press conference on Wednesday, federal shipping ministry special secretary Rajesh Kumar Sinha said, "(There are) no loaded cargoes from Iran, we have not heard of that." India’s oil ministry and the three companies did not immediately reply to Reuters queries seeking clarification.

India is also working to ease earlier disruptions near the Strait of Hormuz. Four stranded LPG tankers, Shivalik, Nanda Devi, Pine Gas and Jag Vasant, have already moved out of the zone. Authorities are additionally loading LPG onto Indian vessels that had been left empty and stuck in the Persian Gulf.