Indian Oil Corp finalised a deal with Algeria's Sonatrach to import liquefied petroleum gas in 2027, according to trade sources. Under the arrangement the refiner will lift one very large gas carrier carrying between 45,000 and 55,000 metric tonne (t) of LPG each month, a mixture of propane and butane. The shipments will be scheduled monthly through 2027 as India seeks alternative suppliers.

India has moved to diversify supplies after a blockade of the Strait of Hormuz disrupted energy flows and led to rationing of cooking gas. The refiner had held a term arrangement with Sonatrach in the past before shifting purchases to Middle East suppliers, trade contacts said. The shift back to Algeria is part of a broader strategy that includes greater intake from the United States.

Algerian LPG was reported to be priced below the Saudi Aramco contract price, and the deal is structured on a free on board basis, industry participants indicated. Indian Oil and Sonatrach did not reply to enquiries seeking comment. Analysts said the agreement is expected to ease near-term supply pressures for household consumers while market adjustments continue.

India began shipments from Algeria in June and preliminary trade flow data from LSEG suggested the country was due to receive about 110,000 t of LPG in August. The government and the state retailers have been increasing purchases from the United States to offset reduced Middle Eastern volumes, and officials have discussed plans to source up to a quarter of imports from US suppliers in 2027. The three state retailers are also reported to be preparing a joint tender to procure cargoes from the United States for domestic distribution.