Sonatrach set for major return to Indian market with LPG supply deal

This deal marks Sonatrach's strategic re-entry into the Indian market after years of reduced presence, during which India primarily sourced LPG from Middle Eastern suppliers. Under the proposed agreement, IOC will receive one large LPG tanker, with a capacity of 45,000 to 55,000 tons, monthly on a Free on Board FOB basis. This move by India is part of its broader strategy to diversify energy supplies, particularly after disruptions in the Strait of Hormuz impacted Middle Eastern flows, leading to LPG distribution and consumption quotas.

India has already resumed importing Algerian LPG in June, with approximately 110,000 tons expected in August. The 2027 agreement will transition the cooperation from sporadic purchases to regular monthly deliveries, solidifying Algeria's position in the major Asian market. India is also increasing its LPG imports from the United States to further diversify its energy sources.

Neither Indian Oil nor Sonatrach has commented on the information.