Indian Oil Signs Algeria LPG Deal Of 55,000 Tonnes LPG A Month After Hormuz Supply Disruptions
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Indian Oil Corporation has finalised a 2027 LPG deal with Algeria's Sonatrach for monthly cargoes of 45,000-55,000 tonnes, as India targets up to 25% of LPG imports from the US next year.
Indian Oil Corporation (IOC) has finalised an LPG import agreement with Algeria's state energy company Sonatrach for 2027. The arrangement comes after disruptions around the Strait of Hormuz affected LPG flows and led to rationing of cooking gas supplies in India.
The latest deal strengthens Algeria's role in India's supply network as the country looks for alternatives to Middle Eastern sources.
What Does The Indian Oil LPG Deal With Algeria Include?
Under the agreement, Indian Oil will receive one very large gas carrier every month during 2027. Each shipment will carry between 45,000 tonnes and 55,000 tonnes of LPG, made up of a mix of propane and butane.
The deal brings back an earlier supply relationship between Indian Oil Corporation and Sonatrach. IOC had previously bought LPG from the Algerian company under a term agreement before shifting more of its purchases towards Middle Eastern suppliers.
Pricing is another factor in the arrangement. Algerian LPG is priced below the Saudi Aramco Contract Price, according to the report. The IOC-Sonatrach agreement will be based on a free-on-board basis.
Why Is India Looking Beyond Middle Eastern LPG Suppliers?
The supply agreement follows disruptions around the Strait of Hormuz, a key route for energy shipments. The disruption affected LPG supplies and pushed India to ration cooking gas during the crisis.
India resumed LPG imports from Algeria in June. Preliminary LSEG trade-flow data indicates that the country could receive around 110,000 tonnes of Algerian LPG in August.
US supplies are also becoming part of India's diversification plan. India is looking to source as much as 25% of its LPG imports from the US in 2027, according to the report.
Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation are also expected to jointly tender for US LPG supplies
How Is Indian Oil Expanding Its LPG Supply Options?
The Algeria agreement is part of a wider effort to broaden India's LPG supplier base. Along with Algerian cargoes, the country has increased purchases of US LPG to make up for lower supplies from the Middle East.
The shift is aimed at reducing exposure to disruptions along the Middle East energy corridor. It also gives Indian refiners and fuel retailers additional sources for meeting domestic cooking-gas demand.
India is also encouraging consumers to move towards piped natural gas as it tries to reduce pressure on imported LPG supplies.
For Indian Oil, the 2027 arrangement with Sonatrach restores a supply link with Algeria while adding regular monthly cargoes to its LPG sourcing mix.
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Vishwa has spent 10+ years across fintech and FMCG doing what most people miss, connecting the dots, catching trends before they trend, and finding the angle nobody else thought to ask about.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide, turning market noise into something worth reading.
When she's not decoding markets, she trades charts for canvases, chasing art, painting, and architecture across cities she's yet to explore.
