US LNG surge to India amid Hormuz disruptions, SPR near 40-year low

Energy buyers in India turned sharply to American suppliers in May after traffic through the Strait of Hormuz slowed. Washington delivered 900,000 tonnes of LNG, more than 40 percent of India’s monthly needs, and 630,000 tonnes of LPG, according to Kpler data cited by multiple traders. Those volumes marked a threefold jump in LNG from April and exceeded combined Gulf shipments of LPG by roughly 60 percent.

The shift followed reported strikes by the United States and Israel on Iranian targets beginning February 28. India normally routes 60 percent of its LNG and nearly all its LPG through the strait; higher freight costs that once limited U.S. cargoes became secondary once alternative Gulf volumes were curtailed. Analysts at Kpler and Rystad Energy noted that the change also built on earlier U.S.-India trade talks aimed at narrowing New Delhi’s surplus.

At the same time, U.S. crude stocks in the Strategic Petroleum Reserve fell to 349.2 million barrels by June 5, the lowest since 1983, after releases averaging nearly 9 million barrels a week since March, Fortune reported. GasBuddy’s Patrick De Haan said further draws would leave officials with fewer tools if prices spike. The national average for regular gasoline stood at $4.15 a gallon on June 10, up from $3.12 a year earlier, AAA data showed.

Executives warned that sustained closures or renewed fighting could push markets higher within weeks. India’s rupee has already weakened partly on the larger energy bill, while Nomura noted U.S. exports to India have risen eightfold from pre-disruption levels. No independent confirmation exists for additional reported U.S. helicopter losses or subsequent strikes on twenty Iranian targets mentioned in some accounts.