Brent holds above $100 as India swaps Gulf LNG for US barrels
India limited LNG import losses to 5% through the Hormuz crisis by pivoting to US and African supply, but the trade relationship is showing political strain.
ICE Brent crude front-month traded at $100.94/bbl on Tuesday (2026-09-22), with Dubai crude at $115.46/bbl, a spread that signals Asian buyers are still paying up for non-Gulf barrels even as the headline complex holds a round number.1
S&P analysis put the Hormuz closure's impact at a 15 million b/d cut in Gulf liquids production, a disruption that should have gutted Indian imports. It did not. India's LNG imports fell only 5%, with May 2026 volumes down just 2% year-on-year, as New Delhi diversified supply toward Oman, the US, Nigeria and Angola.6
The pace of that shift is striking. The US became India's top LNG supplier in May 2026, shipping 900,000 tonnes, which was 40% of Indian needs and a threefold increase from April. It simultaneously took the top LPG slot, sending 630,000 tonnes, 60% more than India received from the Gulf that month.5
These were not casual spot purchases. India signed a one-year deal to import 2.2 million metric tons of LPG from the US in 2026, the first structured contract for American LPG in the Indian market. A single-year term suggests both governments are probing the commercial relationship without committing to it.2
The politics arrived alongside the commerce. In May 2026, Foreign Minister S. Jaishankar announced India would expand energy ties with the US following bilateral talks with Secretary of State Marco Rubio in New Delhi. Washington had already issued short-term sanctions waivers allowing purchases of Russian crude, after Russia's share of Indian crude imports dropped below 20% in January 2026.5,2
Then the relationship took a hit. On June 12 (2026-06-12), Jaishankar phoned Rubio to register a "strong protest" about the killing of three Indian seafarers, Foreign Policy reported. Diplomatic fractures between the two strategic partners are likely to outlast the conflict, the magazine said.4
India needs US barrels to cover the Gulf gap. But the security arrangement underpinning that supply is under strain. Policy analysts at the East Asia Forum noted the war has fuelled doubts about US security commitments in the Indo-Pacific and may encourage greater inter-Asian cooperation.1
The physical market has found partial workarounds. Alternative routing via the Red Sea and expanded ship-to-ship transfers east of Hormuz helped effective Middle East crude exports rebound to over 10 million b/d, per S&P. The "no war, no peace" stalemate described by CSIS means the disruption is persistent but not total.6,7
India's currency adds another complication. Foreign investors pulled over $20 billion from Indian equities in the first four months of the year, and the rupee hit a historic low against the dollar, Indian government data show. A weaker rupee raises the cost of dollar-denominated US LNG precisely as the supply relationship deepens.1
Washington's own calculus is expansionary. Speakers at the Atlantic Council's Global Energy Forum on June 10 (2026-06-10) noted that the US now produces over 13 million b/d of crude and 20 million b/d of total liquids. The Trump administration is keen to push Venezuelan crude onto the global market now that Washington controls an estimated 303 billion barrels of Venezuelan reserves, and analysts say the aim is to reshape global supply chains while reducing Iran's leverage in any peace talks.3,1
The one-year LPG contract expires before the diplomatic wounds heal. If Indian buyers extend or expand the deal, the May 2026 numbers signal a structural shift. If it lapses, the surge was a crisis hedge, not a new baseline — and New Delhi's search for a durable alternative to Gulf supply continues.2,5