At a tea stall in Chandni Chowk, the gas cylinder ran out on a Tuesday morning, and no replacement arrived. Across the city, a hotel kitchen in Connaught Place shut its burners by noon. In Tamil Nadu, restaurant owners queued outside distributor offices before dawn. These are not isolated incidents; they are the street-level face of a geopolitical crisis unfolding 2,500 kilometres away in the narrow waters between Iran and Oman.
The Strait of Hormuz, a 21-nautical-mile (39 km / 24 miles) chokepoint through which nearly 90 per cent of India’s LPG imports pass, has been thrown into turmoil by the escalating war between Iran, Israel, and the United States. Shipping has been disrupted; suppliers have declared force majeure; and cargoes have been delayed or diverted. For a country of 1.4 billion people, where cooking gas is not a convenience but a daily necessity, the consequences have been immediate and sharp.
On 10 March 2026, the government invoked the Essential Commodities Act, a wartime-era law last used during acute national shortages, to emergency-prioritise LPG distribution to the estimated 330 million households that depend on it for cooking.
What Happened: The War, the Chokepoint, and India’s Response
The immediate trigger is a war India did not start but cannot escape.
In late February 2026, a series of Israeli strikes on Iranian nuclear and military infrastructure, backed by active US naval and air support, drew a decisive Iranian counterstrike. Tehran launched missile barrages at Israeli territory and, critically, deployed its Revolutionary Guard Corps (IRGC) to mine and blockade portions of the Strait of Hormuz, the 21-nautical-mile passage between Oman and Iran that handles an estimated 20 per cent of global liquefied gas trade, according to the International Energy Agency.
Iran has long held the Strait of Hormuz as its principal strategic lever in any confrontation with the West. In 2012, during earlier nuclear standoffs, Tehran threatened to close it entirely. This time, it acted. The IRGC seized two commercial tankers in the first week of March 2026, according to maritime tracking firm Lloyd’s List Intelligence, and deployed mines across the northern shipping lane used predominantly by LNG and LPG carriers bound for Asia. Insurance premiums on Gulf-bound shipping surged by over 300 per cent within days, according to Reuters.
The impact was near-immediate. Qatar, which supplies India with more LPG than any other single nation, declared force majeure on existing contracts on 5 March 2026, citing the inability to guarantee safe vessel passage. Iraq suspended exports from its southern Basra terminals after drone strikes on port infrastructure. Kuwait followed with its own force majeure notice. Saudi Aramco, though it has not formally halted exports, warned of “catastrophic consequences” for global markets if the disruption extended beyond two weeks, according to Reuters. Together, these three countries supply over 80 per cent of India’s LPG imports, according to S&P Global.
For India, the geography is unforgiving. Unlike crude oil, where New Delhi has successfully diversified purchases to include Russia, the United States, and Africa, LPG supply chains are far less flexible. Approximately 80 to 90 per cent of India’s LPG imports transit the Strait of Hormuz. Alternative suppliers, the United States, Australia, and Norway, exist, but their cargoes take 35 to 45 days to reach Indian shores, compared to seven to eight days from the Gulf. There is no logistical shortcut.
India’s Government Response
Against this backdrop, the Ministry of Petroleum and Natural Gas issued the Natural Gas (Supply Regulation) Order, 2026, on 10 March 2026, one of the most sweeping energy emergency orders India has issued in the post-liberalisation era.
The order formally designated four priority sectors for guaranteed gas allocation: domestic piped natural gas (PNG), compressed natural gas (CNG) for transport, LPG production for household use, and essential pipeline operations. Supply to these sectors is to be maintained at 100 per cent of their average consumption over the preceding six months, according to the ministry notification.
The three state-owned oil marketing companies, IOCL, BPCL, and HPCL, were directed to halt commercial LPG supply and redirect all available stock to domestic consumers. Refineries received orders to shut down petrochemical feedstock operations and pivot to cooking gas output.
Aadhaar-linked biometric verification was made mandatory for PMUY consumers to prevent hoarding, and the minimum cylinder rebooking window was extended from 21 days to 25 days.
India’s LPG: Sources and Routes
India is the world’s second-largest importer of LPG, behind China. The country imports LPG predominantly from West Asia, with Qatar, the UAE, and Saudi Arabia collectively supplying the bulk of requirements. More than 90 per cent of the approximately 20.5 million metric tonnes India imported in 2024 came from West Asian suppliers.
India’s structural import dependency has grown sharply over the past decade, from 47 per cent of domestic requirements in 2015 to approximately 67 per cent in 2024, according to Drewry’s LPG Forecaster. The IEA estimates India’s LPG demand will grow at 2.5 per cent annually through 2030, potentially reaching 37.7 million tonnes by the end of the decade.
Butane accounts for 52 per cent of India’s LPG imports. Middle Eastern cargoes arrive in a roughly 50:50 propane-butane mix, while US supplies are heavily propane-dominant at 80:20. This composition difference makes rapid switching to US supply technically complicated for Indian port terminals.
Cargoes from the Gulf, Iraq, Saudi Arabia, the UAE, and Kuwait arrive at Indian ports within seven to eight days. Shipments from the United States or Brazil take approximately 45 days. This transit gap means alternative supply cannot bridge shortfalls quickly in the near term.
Background and Context: A Structural Vulnerability Years in the Making
India imports approximately 85 per cent of its crude oil and meets nearly half of its natural gas needs through imports, making it deeply exposed to any disruption at the Strait of Hormuz. The strait is a 21-nautical-mile-wide passage between Oman and Iran and the only maritime route connecting Gulf energy producers to global markets.
Before the current conflict, India was receiving around 60 million standard cubic metres per day (mmscmd) of natural gas from the Middle East. The country’s total daily requirement stands at approximately 195 mmscmd.
Iraq has reportedly cut output from its southern oilfields by around 70 per cent, and Kuwait has declared force majeure, adding broader pressure on global supply. Saudi Aramco CEO Amin Nasser warned of “catastrophic consequences” for global oil markets if Hormuz disruptions continue.
LPG pricing carries significant political weight in India. Five states, Assam, Tamil Nadu, Kerala, West Bengal, and Puducherry, are scheduled for assembly elections in the first half of 2026. India’s LPG distribution network spans over 25,000 distributors, according to the Petroleum Planning and Analysis Cell (PPAC). Under PMUY, the government has extended 103 million subsidised connections to economically weaker households since the scheme’s launch in 2016.
Commercial shortages have been reported in Tamil Nadu, Karnataka, Maharashtra, and Punjab. The Chennai Hotels Association wrote to Prime Minister Modi seeking an uninterrupted supply. The Federation of Hotels and Restaurants Association of India (FHRAI) warned that thousands of small and medium establishments face closure.
India’s Diversification Efforts
India began exploring supply diversification in mid-2024 following earlier regional tensions. In February 2026, India signed contracts to import approximately 2.2 million tonnes per annum of LPG from the United States, roughly 10 per cent of total LPG imports. BPCL has also concluded an annual contract with Norway’s Equinor for 550,000 tonnes per annum of propane and butane.
India is sourcing cargoes from ADNOC of the UAE, Algeria’s Sonatrach, and suppliers in Australia and Canada. GAIL India has procured a spot LNG cargo from Oman, loaded on the vessel Orion Hugo and chartered by Shell, expected to arrive around 15 March 2026, according to Business Today.
Government sources told ThePrint that India has increased crude oil procurement from sources outside the Strait of Hormuz to 70 per cent of its total, up from 55 per cent ten days earlier. India currently holds approximately 70 days of crude oil storage capacity, according to ministry sources.
What Happens Next
The government has formed a three-member committee comprising executive directors of IOCL, HPCL, and BPCL to review commercial LPG supply requests on a case-by-case basis. Hotels, restaurants, and non-essential commercial users will need to submit requests that will be assessed based on necessity and product availability, according to an IOCL statement.
India is likely to increase coal-fired power capacity utilisation through the summer to compensate for the tightening LNG supply. The government is also in active negotiations with suppliers in Norway, the United States, and Australia for alternative long-term supply arrangements.
Prices of non-subsidised LPG have already risen. A 14.2-kg domestic cylinder in Delhi now costs Rs 913, up Rs 60 from Rs 853 previously. Further price revisions will depend on the duration of the Hormuz disruption and movements in the Saudi Contract Price, the global LPG benchmark.
Market analyst David Roche told CNBC that the Strait of Hormuz could partially reopen within two to three weeks, though this timeline remains contingent on the broader conflict. India’s ability to manage the crisis will depend on how quickly alternative supply chains can be operationalised and whether domestic production increases can cushion the import shortfall in the near term.
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