India's IOC Nears Deal to Import LPG from Algeria Amid Middle East Crisis
India's state-run refiner Indian Oil Corp (IOC) is nearing a deal to import liquefied petroleum gas (LPG) from Algeria's Sonatrach in 2027. The move aims to diversify India's LPG sources, which have been affected by the recent blockade of the Strait of Hormuz.
According to three trade sources aware of the matter, IOC will lift one Very Large Gas Carrier containing 45,000 to 55,000 metric tons of LPG, a mix of propane and butane, every month. This is in addition to India's existing imports from Algeria, which began in June.
India has been increasing its intake of US LPG to offset the loss of Middle Eastern supplies, with plans to buy up to a quarter of its LPG imports from the United States in 2027. The country has also incentivized city gas suppliers to boost domestic piped connections and reduce reliance on imported cooking gas.
IOC used to have a term deal with Sonatrach until a few years ago, but later switched to purchases from the Middle East. Algeria's LPG prices are lower than Saudi Aramco Contract Price, making it an attractive option for IOC.