Indian Oil Corp. has bought LPG from Iran for the first time in almost eight years, according to people familiar with the matter, as India scrambles to tider over an LPG shortage spurred by the Iran war.
The refiner will share the shipment with its state-owned peers Bharat Petroleum Corp Ltd. and Hindustan Petroleum Corp Ltd., said the people, who asked not to be named due to the sensitivity of the trade.
Indian Oil last bought LPG from Iran in June 2018, according to data intelligence firm Kpler, which said the current cargo is about 43,000 tons of butane and propane.
That amount would only be enough to meet half a day’s demand in India, where LPG is commonly used as a cooking fuel. The country imports about two-thirds of its supplies, and 90% of that comes from West Asia, largely through the Strait of Hormuz that’s been effectively blocked since the start of the Iran war.
The LPG shortage seen some Indians being forced to cook with firewood, and have led to fights in lines to get LPG cylinders. New Delhi has curtailed supplies to commercial users such as hotels and restaurants and invoked emergency measures to accelerate the development of natural gas pipelines.
It’s the first Indian purchase of energy from Iran since the US issued a temporary waiver earlier this month allowing the country to buy crude oil or petroleum products from the Islamic Republic. The market has been watching for signs of potential buyers for Iranian cargoes that were long considered out of reach due to harsh US sanctions.
The people familiar didn’t provide any further details on the cargo or the vessel that’s carrying it. However, ship-tracking data from Kpler shows LPG carrier Sea Bird is transporting Iranian LPG and signalling it will arrive at India’s Mangalore port on Thursday.
The ship had previously signalled its intention to head to China, as it passed through the strait on 17 March, before turning off its transponder signals. It then reappeared in the Arabian Sea a few days later, sailing east, even though its destination was Dubai in the opposite direction.
India is also in the final stages of negotiations for the safe passage of two more LPG cargoes through Hormuz. The vessels Green Asha and Green Sanvi are contracted by BPCL.
Indian Oil, BPCL and HPCL didn’t reply to emails seeking comment. Reuters reported earlier that India had bought its first LPG cargo from Iran in years.
