India is looking beyond the Middle East for cooking fuel—and Algeria is emerging as a key new supplier.
Indian Oil Corporation (IOC), the country’s largest state-owned commercial company and a major refiner, has reached an agreement with Algeria’s state energy company Sonatrach to import liquefied petroleum gas (LPG) from 2027.
The deal comes as disruptions around the Strait of Hormuz expose the risks of India’s heavy reliance on Middle Eastern energy suppliers.
It also gives Algeria a larger role in one of the world’s fastest-growing LPG markets.
India will receive up to 660,000 tonnes a year
Under the agreement, IOC is expected to purchase between 45,000 and 55,000 metric tonnes of LPG every month.
That translates into approximately 540,000 to 660,000 tonnes annually.
The shipments will be transported by very large gas carriers and will contain a combination of propane and butane, the gases widely used as cooking fuel in Indian homes.
For India, the agreement adds another source of supply at a time when securing reliable LPG imports has become an increasingly important energy-security issue.
Why Algeria is back in the picture
The agreement represents a revival of an earlier commercial relationship between IOC and Sonatrach.
IOC had previously maintained a term LPG arrangement with the Algerian company before shifting more of its purchases towards Middle Eastern suppliers.
Now, the economics have changed.
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According to sources, Sonatrach’s LPG pricing is more competitive than Saudi Aramco’s Contract Price, helping Algeria regain a position in India’s import market.
The deal could therefore benefit both sides.
For India, it provides another supplier outside the Gulf. For Algeria, it creates a larger foothold in an Asian market and expands its energy relationships beyond its traditional European customers.
India began importing LPG from Algeria in June, with preliminary trade-flow data indicating that around 110,000 tonnes could arrive in August.
Africa is becoming more important to India’s energy strategy
Algeria is not the only African energy producer gaining importance in India’s supply chain.
India has increasingly looked towards Africa and the wider Atlantic market as it seeks to spread its energy purchases across more suppliers.
Countries such as Nigeria, Angola and Algeria are already important partners.
Indian refiners have long bought African crude because several grades offer characteristics that fit their refinery systems.
Purchases in 2026 included Angolan grades such as Kissanje, Nemba and Dalia, alongside Nigerian crude grades including Agbami and Usan.
The growing trade suggests that Africa could play a broader role in India’s energy-security strategy—not only as a source of crude oil, but increasingly as a supplier of other fuels.
The Strait of Hormuz changed the calculation
India’s push to diversify became more urgent after disruptions around the Strait of Hormuz.
The waterway between Iran and Oman is one of the world’s most important energy corridors, carrying substantial volumes of oil and gas between producers in the Gulf and international markets.
For India, the vulnerability is significant because the country has historically sourced large quantities of LPG from Gulf producers.
In 2024, India’s LPG imports included approximately:
- 8.1 million tonnes from the UAE
- 5 million tonnes from Qatar
- 3.4 million tonnes from Kuwait
- 3.3 million tonnes from Saudi Arabia
That concentration leaves India exposed whenever shipping through the region is disrupted.
Recent supply problems reportedly contributed to LPG shortages and increased pressure on India to find alternative sources.
The United States is also gaining ground
India’s diversification strategy extends beyond Africa.
The country has increased LPG purchases from the United States while encouraging greater use of piped natural gas as another way to reduce dependence on imported cooking fuel.
Sources cited by Reuters say India could obtain as much as one-quarter of its LPG imports from the U.S. in 2027.
That would represent a significant shift in the structure of India’s LPG supply chain.
Instead of relying overwhelmingly on Gulf producers, Indian buyers would have access to a wider network stretching from North America and Africa to the Middle East.
A bigger opportunity for African energy producers
The shift could create new opportunities for African exporters.
Algeria’s return to India’s LPG market demonstrates that African producers can compete for Asian demand when they offer the right combination of price, reliability and shipping access.
Other energy-producing countries across the continent could benefit from the same trend if India continues to diversify its imports.
For Algeria, the IOC agreement is therefore more than a single supply contract.
It is a sign that Africa can become a larger part of India’s strategy to secure energy supplies in an increasingly uncertain global market.
And for India, the calculation is straightforward: the more suppliers it has, the less vulnerable it becomes when one critical energy route is disrupted.