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

The conflict with Iran has cut India off from much of its traditional energy supplies through the Strait of Hormuz, pushing New Delhi to buy record volumes of American liquefied natural gas and liquefied petroleum gas. Data from energy tracker Kpler shows the United States shipped 900,000 tonnes of LNG to India in May, more than 40 percent of that country's total needs and triple the April figure. Washington also delivered 630,000 tonnes of LPG, roughly 60 percent more than all Gulf suppliers combined.

Those exports reflect both the immediate effects of traffic disruptions that began after U.S. and Israeli strikes on Iran in late February and a longer-running effort to expand energy trade between the two countries. Even before the fighting, American officials had been pressing India to take more U.S. shale gas. With Gulf cargoes now harder to secure, the shift has accelerated.

At the same time, the same conflict is drawing down America's own emergency stockpile at a rapid pace. Since March the administration has released 66 million barrels from the Strategic Petroleum Reserve to keep domestic supplies steady and blunt the impact on pump prices. The reserve stood at 349.2 million barrels on June 5 and is falling by nearly nine million barrels a week. If the draw continues, holdings will soon reach their lowest point since 1983.

Gasoline prices have already moved higher. The national average for regular stood at $4.15 a gallon this week, up more than a dollar from a year earlier. Analysts note that any further tightening in global markets could produce sharper spikes in the months ahead, especially if Hormuz remains effectively closed.

The pattern is familiar: an overseas confrontation raises costs for American consumers and taxpayers while creating new commercial openings for U.S. energy producers. India gains a reliable supplier, Gulf exporters lose market share, and the bill for keeping oil flowing lands on the Strategic Petroleum Reserve. How long that arrangement can be sustained without further pressure on domestic energy prices remains an open question.