Indian Oil Corp. bought liquefied petroleum gas from Iran for the first time in nearly eight years, according to people familiar with the matter, as the country seeks to stave off worsening shortages of the vital cooking fuel sparked by the Middle East war.
The refinery will share the shipment with its state-owned partners Bharat Petroleum Corp Ltd. and Hindustan Petroleum Corp Ltd., said the people, who asked not to be named due to the sensitivity of the deal.
Indian Oil last bought LPG from Iran in June 2018, according to data intelligence firm Kpler, which said the current load is about 43,000 tonnes of butane and propane.
This amount would only be enough to cover 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 the Middle East, mostly through the Strait of Hormuz, which has been effectively blocked since the start of the war.
The shortage has seen some Indians forced to cook with firewood and led to fights in queues to get LPG cylinders. New Delhi has cut supplies to commercial users such as hotels and restaurants and imposed emergency measures to speed up pipeline development.
It is India’s first energy purchase from Iran since the US earlier this month issued a temporary waiver allowing the country to buy oil or petroleum products from the Islamic Republic. The market was watching for signs of potential buyers for the Iranian cargo, which had long been considered unavailable due to tough US sanctions.
The people in the know did not provide any further details about the cargo or the vessel carrying it. However, ship tracking data from Kpler shows that the LPG carrier Sea Bird is carrying Iranian LPG and signals that it will arrive at the Indian port of Mangalore on Thursday.
The ship had previously signaled its intention to head for China when it passed through the strait on March 17 before turning off its transponder signals. It then reappeared in the Arabian Sea a few days later and sailed east, although 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 did not respond to emails seeking comment. Reuters had earlier reported that India had bought its first LPG cargo from Iran in years.
