LPG prices correct nearly 20% from peak as Middle East tensions ease; will it benefit India? IOC, BPCL, HPCL among stocks to watch - Markets | Latest News Updates

As geopolitical tensions in the Middle East show signs of easing, energy prices have started moving in favour of consumers. Crude oil prices have surrendered most of the gains made during the recent conflict and are now trading close to their pre-crisis levels.

According to a report by JM Financial, the correction in global LPG prices could reduce India’s import bill, improve supply availability and provide a positive tailwind for companies involved in LPG imports, storage and distribution.

The recent rally in LPG prices was largely driven by concerns over escalating tensions between the US and Iran and the possibility of disruptions in the Strait of Hormuz, one of the world’s most vital energy shipping routes.

The Strait of Hormuz handles a significant share of global seaborne LPG trade. Any disruption to shipping through the route can immediately affect supplies to Asia, including major importers such as India.

As concerns over supply interruptions mounted, buyers rushed to secure cargoes, pushing up global LPG rates.

The US propane benchmark at Mont Belvieu, a key pricing hub for global LPG exports, witnessed a sharp rise during this period. Since Mont Belvieu is closely linked to export flows, increased international demand and higher freight costs pushed spot prices significantly higher.

LPG prices begin to cool

With the risk of major supply disruptions now gradually fading, the market has started unwinding the geopolitical premium that had been built into prices.

“With potential de-escalation of US-Iran tensions, the LPG futures index indicates a price correction. US benchmark pricing for propane (Mont Belvieu) is down around 20 per cent from its peak in May 2026, although it remains about 9 per cent higher than the pre-crisis period,” JM Financial said.

As cargo movements through the region normalise and panic buying subsides, the additional risk premium that had lifted prices is steadily disappearing.

In simple terms, fears of war and supply disruptions pushed LPG prices sharply higher, while the easing of tensions has triggered a correction. The nearly 20 per cent decline in Mont Belvieu propane prices from the May peak reflects traders removing the emergency premium that had been priced in when supply shortages appeared imminent.

India is among the world’s largest LPG importers and relies heavily on overseas supplies to meet domestic demand. Lower global LPG prices could therefore translate into a lower import bill and improved margins for companies involved in the LPG value chain.

A sustained decline in prices could also help ease input costs for industries that use LPG and support the profitability of importers, storage operators and distributors.

Additionally, the government on Thursday (June 25) said it has removed all sector-wise restrictions on the supply of non-domestic packed LPG and restored commercial supplies to levels that existed before the crisis. It has also partly restored bulk LPG supplies, which had been suspended when the global supply situation worsened.

Lower global LPG prices and easing Middle East tensions could benefit companies across India’s LPG value chain.

Bottom Line

Any renewed geopolitical flare-up, particularly around the Middle East or the Strait of Hormuz, could quickly reignite supply concerns, push LPG prices higher again and reverse the relief currently being enjoyed by importers and consumers.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)

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