About the Author
In the first week of March 2026, something unusual started happening at LPG distribution terminals across coastal India. Queues. Long ones. The kind that form when people don’t quite believe the government when it says supplies are fine.
They weren’t wrong to be skeptical. About 60% of India’s LPG, the cooking fuel that a billion households depend on, comes from imports. And roughly 90% of those imports had been moving through the Strait of Hormuz. Since February 28, when the US and Israel launched strikes on Iran and Iran responded by effectively closing the strait, that corridor had been shut.
What followed wasn’t just an Indian supply problem. It was the unraveling of a trade system that had been running quietly for decades: the India, China and Middle East LPG triangle. A system so efficient, so well-worn, that nobody had really thought about what would happen if the pipe in the middle got kinked. Now everyone’s thinking about it.
How the Triangle Worked, Before
The global LPG trade isn’t random. It has grooves worn into it by years of pricing, logistics, and contract relationships. The Middle East, meaning Saudi Arabia, Qatar, Kuwait, UAE, and Oman, supplied roughly 3.5 to 4 million metric tons of LPG per month to world markets. Asia absorbed most of it.
India and China, the two largest LPG-consuming countries in the world, were the dominant buyers, and their sourcing patterns had developed their own logic over time. India leaned heavily on Gulf supply. In 2025, Indian state refiners, Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum, imported 23.4 million tons of LPG. Of that, 90% came through the Strait of Hormuz, according to Kpler tracking data. The UAE alone supplied 8.1 million tons. Qatar sent 5 million. Kuwait 3.4 million. Saudi Arabia 3.3 million.
China, meanwhile, had historically sourced more from the US. That relationship worked partly because of geography and partly because US propane pricing often gave Chinese petrochemical buyers a competitive edge against naphtha. Middle Eastern volumes that might have gone to China often found their way to India instead. It worked. Then one strait closed it down overnight.
44.2 Million Tons Through One Bottleneck
Before the war, 30% of global seaborne LPG exports transited the Strait of Hormuz. That’s 44.2 million metric tons per year, roughly 121,000 metric tons per day, according to Argus Media’s March 2026 market analysis.
When Iran closed the strait on February 28, that entire flow didn’t just slow down. It stopped. Very large gas carriers (VLGCs) that had been loaded and waiting in the Persian Gulf had nowhere to go. Multiple carriers, tracked by Drewry, were observed changing course from the Gulf of Oman toward the US Gulf Coast in mid-March, searching for return cargo, effectively stranded.
The price response was immediate and severe.
LPG Price Movements: February 27 to March 18, 2026
| Benchmark / Market | Pre-war level | Peak post-closure | Change |
| Propane (Argus Far East Index) | Baseline | Surged 53% | +53% (Feb 27 to Mar 18) |
| Butane (Argus Far East Index) | Baseline | Surged 66% | +66% (Feb 27 to Mar 18) |
| ARA large cargo propane (Europe) | Baseline | $922.75/t | +64% (same period) |
| Propane spot premium, Japan delivery | $55/t over AFEI | $135/t over AFEI | +$80/t in 3 weeks |
| Aramco April LPG OSP to Asia | March base | 38% higher | Largest monthly hike in years |
Source: Argus Media LPG Market Outlook, March 2026
Argus described the situation plainly: the closure of the Strait of Hormuz had pushed the LPG market into a “deep deficit, comparable with peak winter heating season.” The problem was that inventories were already at their seasonal lows. There weren’t reserves to draw on.
The US had supply, but export terminals were bottlenecked, and on March 18, Targa Resources declared force majeure at its 472,000 barrel-per-day facility, cutting even that lifeline. Propane prices hit 12-year highs. Butane, which dominates LPG demand in South and Southeast Asia, followed even faster.
India’s Emergency Response: Operation Sankalp and the US Pivot
The Indian government’s reaction was fast and, in retrospect, well-coordinated. On March 5, the Ministry of Petroleum and Natural Gas invoked the Essential Commodities Act, directing all public and private refineries to maximize LPG production immediately. Feedstock that had been going to petrochemical production was diverted to cooking gas. Domestic LPG output climbed by roughly 30%. Commercial LPG deliveries to hotels, restaurants, and industrial buyers were cut to about 70% of normal allocation to protect household supply.
At sea, the Indian Navy launched Operation Sankalp. Between March 14 and March 24, five Indian-flagged LPG carriers were escorted through the Gulf of Oman under naval protection, crossing Hormuz and then sailing through open water with warships alongside. It was a remarkable moment: a government deploying military assets to escort cooking gas tankers. In those 40 days, India managed to bring in 8 LPG shipments via Hormuz, totaling about 340,000 metric tons, roughly 11 days of import requirements. Not enough to be comfortable. Enough to avoid a full crisis.
The US Supply Pivot, Faster Than Anyone Expected
Indian state refiners had already signed contracts for 2.2 million metric tons of US-origin LPG before the conflict, part of a broader India-US trade alignment under Prime Minister Modi’s Washington visit in February 2026. When the Middle East shut down, those contracts shifted from opportunistic to essential. Middle Eastern LPG’s share of India’s weekly imports dropped to just 34%. US and alternative regional volumes surged to fill the gap, at a significant cost premium.
The switch isn’t free. US LPG arriving in India on delivered terms costs more than Gulf supply: longer voyage, higher freight, wider spot premiums. Reliance Industries accelerated domestic production at its Jamnagar complex to offset some of the cost pressure. But for state refiners selling LPG at government-regulated household prices, the margin math has become painful.
China’s Exposure: A Different Kind of Problem
China’s situation is more complicated, and arguably less well-managed than India’s.
Historically, China sourced more LPG from the US than India did. But since early 2025, a combination of US tariff disputes and trade tensions had already been pushing Chinese buyers away from American supply. When the Hormuz crisis hit, China found itself caught between two problems: reduced access to Middle Eastern LPG and a strained relationship with its largest alternative supplier.
Richardson Lawrie’s April 3 market report flagged the risk directly: China was facing a potential LPG supply crunch, with Middle Eastern propane, butane, methanol, ethylene, and polyolefins all simultaneously disrupted. The option to increase US imports existed on paper, but logistical and pricing factors made a rapid pivot difficult in practice.
The dynamic that OPIS analysts had predicted in January, that India’s US buying might cause Middle East suppliers to redirect volumes to China, has partially materialized. But the Middle East volumes those redirected cargoes are supposed to come from are still mostly stuck behind the blockade. The redirection is happening in principle; the physical supply hasn’t fully followed.
For Chinese PDH (propane dehydrogenation) plants and petrochemical feedstock buyers, the shortage has pushed some toward naphtha and LNG substitution. That’s an imperfect fix because naphtha supply from the Middle East is also disrupted, and it’s created a secondary crunch in Asian petrochemical operating rates that’s still working its way through the system.
Qatar’s Wound: The Ras Laffan Problem
Of all the damage the Hormuz crisis has done to global LPG and energy markets, what happened to Qatar may take the longest to repair.
Iranian drone and missile strike on energy infrastructure hit Ras Laffan, Qatar’s massive LNG and LPG export complex and the largest single LNG-producing facility in the world. The attacks knocked out 17% of Qatar’s LNG export capacity. QatarEnergy has estimated the damage will sideline 12.8 million metric tons per year of capacity, with repairs expected to take three to five years. The company declared force majeure on some long-term contracts and is projecting $20 billion per year in lost revenue during the repair period.
LPG exports from Ras Laffan, which had been growing toward the QatarEnergy North Field expansion targets, are effectively offline. The April 6 episode, when two loaded Qatari LNG tankers, the Al Daayen and the Rasheeda, turned back after approaching the strait, showed how fragile the situation remained even after ceasefire talk began.
It wasn’t until April 17, when Iran’s Foreign Minister Abbas Araghchi formally announced the strait was open to all shipping traffic for the duration of the Lebanon ceasefire, that Qatari vessels began moving in earnest. On April 18, ship-tracking data confirmed five loaded vessels from Ras Laffan approaching Hormuz: the Al Ghashamiya, Lebrethah, Fuwairit, Rasheeda, and Disha. Two destined for Pakistan, two likely for India.
It was a moment. But with 12.8 million metric tons per year of capacity sidelined for years and inventories depleted globally, five vessels approaching a strait is the beginning of a very long repair job, not the end of the disruption.
What The Trade Triangle Looks Like Now
The old system, India buying from the Gulf, China buying from the US, the Middle East supplying both, has been bent significantly. Here’s where things stand as of late April 2026.
| Player | Pre-crisis position | Current position | Direction of change |
| India | 90% of LPG imports via Hormuz, predominantly Gulf supply | US contracts at 2.2 MMt; Middle East share down to 34% of weekly imports | Accelerating US pivot |
| China | Mixed US plus Middle East; retreating from US over tariffs | Supply crunch; Middle East blocked, US difficult; feedstock substitution under pressure | Vulnerable and exposed |
| Saudi Arabia | Dominant supplier to Asia; stable Aramco OSP pricing | OSPs hiked 38% for April; Juaymah disruptions; limited Hormuz access | Repriced, not recovered |
| Qatar | World’s 2nd largest LNG exporter; LPG growing via North Field expansion | Ras Laffan hit; 17% LNG capacity offline; 12.8 MMtpy sidelined for 3 to 5 years | Structurally impaired |
| US (Mont Belvieu) | Alternative supplier; growing capacity | The only fully functional large exporter; capacity bottlenecked; Targa force majeure resolved | Price-setting marginal supplier |
| Europe (ARA) | Received Middle East cargoes; steady market | Asian buyers bidding for European barrels; ARA propane up 64%; local stocks pressured | Importing Asian demand pressure |
Sources: Argus Media, Kpler, QatarEnergy, EIA, BOE Report, Drewry
What This Means For LPG Procurement Right Now
If you’re buying LPG in volume, whether that’s for residential distribution, petrochemical feedstock, industrial heating, or fleet use, the market you’re operating in now is fundamentally different from the one that existed on February 27.
Gulf Term Contracts Are No Longer The Safe Default
For years, a term contract with a Gulf-based bulk fuel supplier, Aramco, ADNOC, or QatarEnergy’s trading arm, was the conservative, reliable choice. Lower volatility, predictable pricing benchmarks, shorter voyages to Asian markets. That equation has changed. With Ras Laffan damaged and Hormuz access still conditional on ceasefire fragility, Gulf-origin LPG carries counterparty and logistics risks it didn’t carry 60 days ago. Diversification isn’t a nice-to-have anymore. It’s necessary.
US LPG Is The Market’s Relief Valve, With Real Limits
Mont Belvieu-origin propane and butane have become the effective market of last resort. Enterprise Products Partners’ expanded Houston Ship Channel capacity and Neches River Terminal are adding significant volume in 2026. But those barrels travel farther, cost more to ship, and are being competed for aggressively by both Indian and Asian buyers simultaneously. Spot premiums for delivered Japan cargoes hit $135 per ton over AFEI, up from $55 before the conflict. US LPG is available. It’s just expensive.
Supplier Qualification Has Never Mattered More
In a market where supply chains are this disrupted, the difference between a verified fuel supplier with real cargo access and a broker quoting paper supply they don’t physically hold has never been more consequential. Procurement teams finalizing LPG supply agreements right now should be doing deeper due diligence on carrier relationships, terminal access, and compliance documentation than they’d normally require.
The Dubai Corridor Remains A Critical Hub
Despite the disruption, Dubai and the UAE Fujairah anchorage have continued to function as staging and blending points for LPG and petroleum products moving through alternative Red Sea and Cape routes. For buyers seeking LPG supply through a Dubai-based wholesale fuel supplier or Gulf trading desk, that infrastructure remains available, though volumes and pricing are not where they were before the crisis.
Managing The Broader Fuel Portfolio
LPG buyers are often also managing bulk diesel and jet fuel across the same supply chains. The same Middle East refinery shutdowns that hit LPG have also affected EN590 diesel and aviation fuel production. Companies managing fuel supply and trading across a mixed product portfolio should be treating this as a unified supply event, not three separate commodity problems. Integrated procurement thinking is more important right now than it’s been in years.
The Recovery Timeline: An Honest Read
The Strait of Hormuz is technically open again as of April 17. Qatar vessels are moving. That’s real progress. But ‘open’ and ‘recovered’ are very different things.
LPG supply recovery timeline
| Milestone | Timeline | Key risk |
| Hormuz transit for tankers | Now, conditional | Ceasefire dependent; could reverse |
| Gulf LPG exports near pre-crisis levels | 2 to 3 months | If ceasefire holds; infrastructure restart; mine clearance |
| Qatar Ras Laffan partial capacity return | 12 to 24 months | Repair complexity; 12.8 MMtpy sidelined |
| Qatar Ras Laffan full capacity return | 3 to 5 years | Structural market deficit for the medium term |
| Global LPG price normalization | Q3 2026 at earliest | Propane at 12-year highs; slow unwinding |
| India’s US LPG sourcing: long-term shift? | Yes, strategic | India-US trade deal framework intact |
Sources: Argus Media, Kpler, QatarEnergy, EIA, BOE Report
The honest answer to ‘when does LPG get back to normal?’ is that it doesn’t. Not fully. The Ras Laffan damage alone has permanently altered Qatar’s export capacity for the next several years. The trade triangle that India, China, and the Middle East built over two decades will look different in 2027 and 2028 than it did in 2025.
Buyers who are still planning on pre-crisis pricing assumptions and supplier relationships need to update those assumptions now, not after their next tender closes.
Frequently Asked Questions
What percentage of global LPG trade passes through the Strait of Hormuz?
Approximately 30% of global seaborne LPG exports transited the Strait of Hormuz before the February 2026 closure, equivalent to 44.2 million metric tons per year, or roughly 121,000 metric tons per day. For India specifically, 90% of its 23.4-million-ton annual LPG imports were routed through Hormuz, according to Kpler data.
How much did LPG prices rise because of the Hormuz crisis?
Between February 27 and March 18, 2026, the propane Argus Far East Index surged 53% and butane AFEI rose 66%, according to Argus Media. ARA large cargo propane in Europe rose 64% to $922.75 per ton. Saudi Aramco raised its April LPG official selling prices to Asia by 38%. Propane prices hit 12-year highs during the disruption.
What happened to Qatar’s LPG and LNG exports during the Hormuz closure?
Iranian strikes on the Ras Laffan complex knocked out 17% of Qatar’s LNG and LPG export capacity. QatarEnergy estimates 12.8 million metric tons per year of capacity has been sidelined, with repairs expected to take three to five years. The company declared force majeure on some long-term contracts and projected $20 billion per year in lost revenue during the repair period.
Why is India pivoting to US LPG?
India has been reducing its Gulf LPG dependence for both supply security and trade policy reasons. Even before the crisis, Indian state refiners had committed to 2.2 million metric tons of US-origin LPG for 2026 as part of the broader India-US trade framework. The Hormuz closure accelerated this shift. When Middle Eastern supply dropped to 34% of India’s weekly imports, US volumes filled the gap, at higher cost but with better supply security.
What is the outlook for LPG prices in the second half of 2026?
With Ras Laffan capacity offline for 3 to 5 years, full LPG price normalization is unlikely before Q3 2026 at the earliest under a base case of ceasefire holding. The structural capacity loss from Qatar means the global LPG market will remain tighter than pre-crisis projections through at least 2027. Buyers should plan for elevated propane and butane benchmarks for the medium term.
Where can I source LPG reliably in the current market?
Petrolodex operates as a global fuel supply and trading platform connecting verified buyers with qualified suppliers for LPG, Jet A-1, EN590 diesel, MGO, and crude oil. We are a Dubai-based wholesale fuel brokerage with supply chain access across the Middle East, US, and Asia-Pacific. Contact us at petrolodex.com to discuss term supply and verified sourcing options.
Work With A Verified Fuel Supplier
The LPG market has been structurally altered. The India, China and Middle East trade triangle that defined global LPG flows for two decades is being redrawn. Buyers who move quickly, locking in verified supply, qualifying new source origins, and building supply chain redundancy, are the ones who will manage Q3 and Q4 with the least pain.
Petrolodex provides fuel supply solutions for buyers who need reliable, documented access to LPG, Jet A-1, EN590 bulk diesel, MGO, and crude oil. We operate as a Dubai wholesale fuel supplier and global broker, connecting refineries, industrial operators, petrochemical buyers, and fleet operators with compliant, verified supplier networks.
If you’re reviewing your LPG supply strategy for Q2 and Q3 2026, we’re available to discuss what fuel supply and trading looks like in the current market.
Contact Petrolodex: petrolodex.com | info@petrolodex.com
LPG | Jet A-1 | EN590 | MGO | Crude Oil | HSFO
