The US became India's main LNG supplier as the Strait of Hormuz was blocked

The United States became India's main supplier of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) in May. The US-Israeli war against Iran cut India off from suppliers in the Persian Gulf because the Strait of Hormuz was blocked as a result. India, however, has been increasing its energy purchases from the US for some time, CNBC reported today.

India imports 60 percent of its LNG and almost all of its LPG through the Strait of Hormuz. LPG is used mainly for cooking in the country. The Strait of Hormuz is a key shipping route for transporting commodities from the Middle East, where the conflict escalated on February 28.

According to data from Kpler, Washington supplied India with 630,000 tonnes of LPG in May, about 60 percent more than the 380,000 tonnes the country received from all Persian Gulf countries combined. The US exported 900,000 tonnes of LNG to India in May. That accounted for more than 40 percent of India's total consumption and was three times higher than in April.

The conflict in the Middle East has boosted US exports. Analysts say, however, that the increase is also due to Washington's broader efforts to increase sales of US energy to India. The two countries had been expanding their energy trade even before the war began. But high shipping costs had previously prevented the US from gaining a meaningful share of the Indian market.

Importing LNG from the US is more expensive than sourcing it from Persian Gulf countries. “But India does not have many options,” said Bineet Banka, an analyst at Nomura's Indian subsidiary. He noted that Washington wants India to reduce its trade surplus with the US, and that higher energy imports could be the best way to achieve this.