LPG Disruption Drives India’s Petroleum Imports to Eight-Year Low

India’s refined petroleum product imports have sharply declined, averaging 765,000 barrels per day (b/d) in March 2026, the lowest level since December 2018. This significant drop, which marks a 25.5% year-on-year decrease, has largely been driven by a 397,000 b/d fall in liquefied petroleum gas (LPG) imports, significantly impacted by the closure of the Strait of Hormuz (SoH). Month-on-month, there has been a staggering 245,000 b/d decline in import volumes. The International Energy Agency (IEA) indicated that the West Asia conflict has contributed to a global energy crisis, with India’s LPG imports plummeting over 50% early in 2026, reflecting a critical supply disruption that poses serious implications for domestic consumption.

Global economic cues have played a vital role in the current price movements of oil and oil products. The strengthening US Dollar, shaped by Fed monetary policy, alongside geopolitical tensions, particularly surrounding the Middle East, have exerted upward pressure on crude prices while simultaneously constraining supply chains. The Fed’s policies aimed at combating inflation can affect oil demand forecasts, and as geopolitical instability affects trade routes, uncertainty invariably leads to increased price volatility in the energy markets. OPEC’s latest report reiterates the consequences of these geopolitical dynamics, further complicating supply scenarios as surging energy prices may hinder economic recovery in oil-importing nations like India.

For Indian investors, the impact of these trends on the Multi Commodity Exchange (MCX) is multifaceted. Expect heightened volatility in oil and LPG futures as supply constraints become more pronounced and demand may strain under deteriorating consumption trends. The sharp decrease in LPG consumption, marked by an almost 16% month-on-month decline, signals potential risk for downstream sectors reliant on stable energy supplies. Investors on MCX should closely monitor geopolitical developments and U.S. dollar fluctuations, as these factors will significantly influence price trajectories, while assessing the evolving domestic consumption patterns amidst heightened global energy pressures.