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Key Points
India imports about 80–85% of its LPG needs and more than 90% of those imports come from the Middle East, almost entirely passing through the Strait of Hormuz. Over 60% of India’s LNG supply is also sourced from the Gulf.
Government officials say current LPG stocks can last around 25–30 days, but prolonged disruption of tanker traffic could strain supply chains and raise costs. A directive has already been issued to restructure distribution systems to prioritize household consumers.
LNG shipments from Qatar have been hit after production halted at Ras Laffan, while companies like Petronet LNG and GAIL have already reduced gas allocations to some sectors. India’s crude reserves remain stable for now as global prices surge.
After joint US-Israeli strikes on Tehran and other major cities on 28 February 2026, Iran’s Revolutionary Guards informally closed the Strait of Hormuz – the only waterway into and out of the Persian Gulf. The narrow passage between Iran and Oman is one of the world’s most important energy chokepoints, handling a significant share of global oil and gas trade.
This closure was formalized on 2 March 2026. Disruptions in tanker movement through the Strait threaten supplies of cooking gas, natural gas and crude oil, raising concerns about India’s energy security.
According to estimates cited by analysts, roughly half of India’s crude oil imports and more than half of its liquefied natural gas (LNG) imports pass through the strait. Trade data from the Directorate General of Commercial Intelligence and Statistics (DGCIS) reveals that India buys nearly 47% of its LNG from Qatar alone.
Analysts warn that while crude oil supplies are relatively well protected by reserves, the immediate pressure could fall on liquefied petroleum gas (LPG), the fuel used in cylinders for household cooking. According to intelligence firm Kpler, India imports around 80-90% of its supply from Gulf countries and almost all shipments transit the Strait of Hormuz.
As tensions in the region intensified, insurers withdrew war risk coverage and several vessels halted transit through the waterway, effectively choking tanker traffic through the strait. Domestically, India’s energy industry is scrambling to adapt to the supply disruption. The government has already issued directives to restructure distribution systems, while exploring alternative sources for gas imports.
Liquefied petroleum gas is emerging as the most vulnerable link in India’s energy supply chain amid the ongoing conflict.
India is the world’s second largest buyer of LPG and buys around 80-90% of its supply from the Gulf. The country consumed more than 31 million tonnes of LPG in the financial year 2024-25, and nearly 90% of that consumption was for domestic cooking. More than 33 crore households rely on LPG cylinders, including about 10.5 crore beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY).
Government officials say the country currently holds around 25-30 days of LPG stocks. While this inventory provides a short-term cushion, analysts warn that delays in shipments scheduled for March could quickly tighten supplies if tanker traffic through the Strait remains disrupted.
Unlike crude oil, India does not maintain large strategic reserves of LPG. This means that the country has limited ability to absorb prolonged supply interruptions. Industry analysts say India has little flexibility to quickly secure large alternative volumes. Small cargoes could potentially be sourced from countries such as the US, Russia or Argentina, but these shipments would depend on spot market availability and freight costs.
Moreover, cargoes from distant suppliers would take significantly longer to reach India and would cost more too. Tankers from the Gulf typically arrive at Indian ports within five to seven days, while shipments from the Atlantic region can take 25-45 days.
To safeguard domestic supply, the Ministry of Petroleum and Natural Gas (MoPNG) has directed refiners to maximise LPG production. A government order issued on 5 March 2026 instructed refineries to prioritise the use of propane and butane streams for LPG production instead of diverting them to petrochemical manufacturing. Public sector oil marketing companies – Indian Oil, Hindustan Petroleum and Bharat Petroleum – have also been instructed to ensure that LPG produced domestically is supplied exclusively to household consumers.
These measures are intended to maintain uninterrupted supply to households even if international shipments slow down. Reports from distributors in several urban centres indicate that some consumers have begun booking additional LPG cylinders in anticipation of shortages. Officials have urged the public not to hoard cooking gas, warning that panic buying can strain distribution networks even before stocks actually run low.
While LPG shortages could directly affect households, the impact of the conflict is already being felt in India’s liquefied natural gas market. India imported about 27 million tonnes of LNG in 2024-25, accounting for roughly half of the country’s natural gas consumption. According to DGCIS, over 60% of India’s LNG imports come from the Gulf.
Of these, Qatar is one of India’s most important energy suppliers. According to trade data, it accounts for nearly half of India’s LNG imports. In FY2025-26 so far, India has imported roughly $4.74 billion worth of LNG from Qatar.
QatarEnergy halted LNG production at its Ras Laffan facility after Iranian strikes targeted key industrial installations. Ras Laffan is among the world’s largest LNG export hubs, and the shutdown has tightened global gas markets and triggered contractual disruptions.
Petronet LNG, India’s largest gas importer, issued force majeure notices after its tankers were unable to reach the Ras Laffan terminal due to security risks in the region. The company issued notices to domestic buyers including GAIL, Indian Oil Corporation and Bharat Petroleum Corporation, stating that deliveries could not be guaranteed under existing contracts. Gas supplies allocated to GAIL from Petronet LNG were reduced to zero from 4 March 2026.
Indian gas companies have already reduced LNG allocations to certain industrial consumers. Government officials indicated that if the disruption continues, authorities may re-prioritise gas allocation among sectors so that industries capable of switching to alternative fuels bear the initial impact. Some sectors have seen supply cuts of 10-30% as authorities prioritise essential uses such as fertilizer production, household gas and compressed natural gas (CNG) for transport.
Some companies have already responded to the tightening supply.
Adani Total Gas, which distributes city gas, has reportedly raised LNG prices for industrial users exceeding their contracted quotas from ₹40 to ₹120 per standard cubic metre. Industries such as ceramics, glass manufacturing and chemicals, which depend heavily on imported LNG, could face rising energy costs if the disruption continues.
Compared with LPG and LNG, India’s crude oil supply situation appears more stable for now.
The country maintains a combination of commercial and strategic reserves that together provide roughly six to eight weeks of crude oil and petroleum product stocks. Government sources say the country has about 50 days of crude and refined product stocks available.
India normally imports between 2.5 million and 2.7 million barrels of crude oil per day through the Strait of Hormuz, primarily from Iraq, Saudi Arabia, the United Arab Emirates (UAE) and Kuwait.
If shipments from the Gulf decline sharply, refiners could shift to alternative suppliers. Russia has indicated it is ready to increase crude oil shipments to India and China. The US has also granted a temporary 30-day waiver allowing Indian refiners to purchase Russian oil in order to ease pressure on global energy flows during the crisis.
However, these alternatives suffer from the same problem as rerouted LPG supplies – raised freight costs and extended delivery times, which could further fuel inflation. Crude oil prices have already climbed above $85 per barrel, and some forecasts suggest prices could reach $120 if disruptions through the Strait of Hormuz continue.
While existing reserves provide short-term protection, analysts warn that a prolonged disruption of tanker traffic through the Strait of Hormuz could significantly affect India’s energy supply chain.
LPG shortages would directly affect households, LNG disruptions would hit industries and power generation, and higher crude prices would raise the country’s import bill and fuel costs and widen the trade deficit.
India is discussing risk insurance arrangements with the US and international financial institutions to protect maritime trade passing through the Strait of Hormuz. A day after Iran formally blocked the Strait, Trump announced that the US Navy may escort oil tankers through it.
If tensions in the region ease quickly, current reserves and supply adjustments may be enough to prevent major disruption. But if the blockade of the Strait of Hormuz persists for weeks, the consequences could extend beyond markets and industries to everyday cooking fuel in millions of Indian homes.
Currently, the Government maintains that India remains in a “comfortable” position with regard to energy stocks.
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