The United States became India's largest supplier of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) in May as disruptions linked to the Iran war reduced fuel shipments from Gulf exporters and forced Indian buyers to seek alternative sources.
The shift comes as the war in Iran continues to affect energy markets and shipping routes. President Donald Trump threatened further military action against Iran on Thursday if Tehran fails to reach an agreement with Washington.
Iran's military command said vessels attempting to transit the Strait of Hormuz would be targeted, while the U.S. military claimed commercial shipping traffic continued to move through the strait.
Against that backdrop, the United States supplied 630,000 metric tons of LPG to India in May, compared with about 380,000 metric tons received from all Gulf countries combined, CNBC reported Thursday, citing data from energy intelligence firm Kpler.
U.S. LNG exports to India reached 900,000 metric tons during the month, accounting for more than 40% of India's total LNG requirements and marking a threefold increase from April, according to Kpler data cited by CNBC.
India imports roughly 60% of its LNG and nearly all of its LPG through the Strait of Hormuz, CNBC noted. The waterway has faced disruptions since the United States and Israel first struck Iran on Feb. 28, affecting trade flows across the region.
The increase in U.S. shipments reflects both the impact of the conflict and the steady expansion of energy trade ties between Washington and New Delhi. Sumit Ritolia, lead research analyst at Kpler, told CNBC that gas is expected to play an increasingly important role in bilateral energy trade.
"The India-US energy trade will increasingly focus on gas," Ritolia told the outlet , adding that the United States' large shale gas reserves and expanding export infrastructure have strengthened its position as a supplier.
The United States has significantly expanded its role in global LNG markets over the past decade. Data from the U.S. Energy Information Administration show the country became the world's largest LNG exporter in recent years after a wave of export terminal expansions along the Gulf Coast.
LPG remains a politically sensitive fuel in India because it is widely used for household cooking. The government has frequently intervened to shield consumers from sharp increases in international fuel prices.
Bineet Banka, an energy analyst at Nomura India, told CNBC that higher energy purchases from the United States could also help narrow India's trade surplus with Washington. Banka added that LNG imported from the United States remains more expensive than supplies from Gulf producers, but India's options have become more limited because of disruptions affecting traditional supply routes.
India remains highly exposed to changes in global energy markets. The CNBC report also noted that the country is the world's third-largest crude oil importer, fourth-largest LNG importer and second-largest LPG importer. Since the start of the conflict, the Indian rupee has weakened against the U.S. dollar amid concerns over rising energy import costs and supply disruptions.
