India Diversifies LPG Sources Amid Middle East Supply Halt

India stopped buying LPG from Iran in 2019 after sanctions were imposed. On Thursday, India bought its first cargo of LPG from Iran after the US temporarily lifted sanctions

Facing a massive shortage of liquefied petroleum gas (LPG) following a virtual stop in supplies from the Arabian Gulf, India has spread the acquisition net wide, roping in distant countries including Argentina and the US for supplies to tackle the crisis back home. It has also bought LPG from Iran for the first time since 2019.

But the gas has to travel long distances – 20,000 km in the case of Argentina – to reach Indian shores.

Mariano Agustin Cousino, Argentina’s ambassador to India, told the media that the ongoing war in the Middle East would see the two countries work together and build mutual understanding.

 His country’s relatively small population and abundant natural resources, enables it to supply large quantities of energy to countries like India, he said.

The distance from Bahia Blanca in Argentina to Dahej in Gujarat is almost 20,000 km, which would raise transportation costs and result in longer delivery timelines.

In the first quarter of 2026, Argentina exported 50,000 tonnes of LPG to India – more than double the 22,000 tonnes shipped in 2025.

Earlier this month, Argentina sent 11,000 tonnes of LPG to India to help it tackle the current crisis. Supplies from Argentina are spot market transactions, not long-term contracts, as those with the US.

Meanwhile, India had stopped buying LPG from Iran in 2019 after western sanctions were imposed on those buying from the country.

 However, according to media reports on Thursday, India bought its first cargo of LPG from Iran after the US temporarily withdrew sanctions on its oil and refined fuels.

An Iranian tanker carrying LPG to China was expected to reach Mangalore port in western India on Thursday.

Supplies from the US Gulf coast are also reaching India, but the freight costs are much higher.

Other sources of LPG for India include Canada, Norway and Russia, though the costs are much higher than the ones bought in the Gulf.

There are more than 330 million homes with LPG connections in India, but mostly in cities. The Indian government has urged consumers to shift to piped natural gas (PNG), available in many cities across the country.

According to Sujata Sharma, a joint secretary in the Petroleum ministry, 250,000 new PNG connections have been given over the past 25 days.

The renewed purchase from Iran marks a significant shift in India’s energy sourcing strategy, reflecting both the urgency of the domestic LPG shortage and the evolving geopolitical landscape. Analysts note that while Iran’s supplies provide relief in the short term, India will need to balance its energy imports carefully to manage costs, shipping times, and compliance with international sanctions.

Experts also highlight that diversifying suppliers—including Argentina, the US, Canada, Norway, and Russia—strengthens India’s energy security. However, long-distance shipments and higher freight costs mean that domestic efforts, such as expanding piped natural gas (PNG) networks, will be critical in easing pressure on urban households and ensuring consistent fuel availability across the country.

A man loads LPG cylinders onto a cart at a warehouse in Mumbai amid supply disruptions due to theongoing US-Israel-Iran war.