What Happened
- The Strait of Hormuz — the 34 km-wide chokepoint at the mouth of the Persian Gulf — is facing effective disruption after Iranian forces warned vessels against transit following the US-Israeli strikes on Iran in late February 2026.
- West Asia supplies 85-90% of India's LPG (liquefied petroleum gas) imports, most of which pass through the Strait of Hormuz.
- India imported 2.03 million tonnes of LPG in February 2026, with approximately 1.66 million tonnes sourced from Gulf nations (UAE, Qatar, Kuwait, Saudi Arabia).
- Existing LPG stocks in India could sustain demand for approximately 30 days, creating a narrow window for alternative sourcing.
- India has begun exploring US, Russian, and Argentine LPG supplies, but logistics and freight costs pose constraints on rapid substitution.
- LPG prices in India are under pressure, with global spot prices rising due to supply uncertainty.
Static Topic Bridges
The Strait of Hormuz: Geography and Strategic Significance
The Strait of Hormuz is a narrow waterway separating the Persian Gulf from the Gulf of Oman and the Arabian Sea. It is flanked by Iran to the north and the Musandam Peninsula (Oman/UAE) to the south, and serves as the only maritime exit from the Persian Gulf.
- At its narrowest, the Strait is approximately 33 km (21 miles) wide; the shipping lane is just 3 km wide in each direction.
- According to the US Energy Information Administration (EIA), approximately 20 million barrels of crude oil and petroleum products transited Hormuz daily in 2024 — roughly 20% of global oil supply and 25% of seaborne oil trade.
- About 20% of global LNG trade also passes through the Strait.
- Only two pipeline alternatives bypass Hormuz: Saudi Aramco's East-West pipeline (5 million b/d capacity, expandable to 7 million b/d) to Yanbu on the Red Sea, and the UAE's Abu Dhabi Crude Oil Pipeline (ADCOP) to Fujairah (1.5 million b/d capacity).
- These pipeline alternatives are insufficient to replace Hormuz volumes and do not cover LPG or LNG exports.
Connection to this news: India's acute LPG exposure stems from the near-total dependence on Gulf suppliers whose LPG tankers must transit Hormuz — and from India's lack of strategic LPG reserves comparable to its crude oil strategic reserves.
India's LPG Import Dependence and Supply Chain
LPG (a mix of propane and butane) is used primarily for cooking fuel in Indian households, with approximately 310 million active LPG consumer connections. India is the world's second-largest LPG importer after China.
- India imports 80-85% of its LPG requirements; domestic production from refineries and gas fields meets only 15-20% of demand.
- India does not maintain strategic LPG reserves — unlike crude oil (where India has Strategic Petroleum Reserves of 5.33 MMT in underground caverns at Vishakhapatnam, Mangaluru, and Padur).
- Major LPG suppliers to India: UAE, Qatar, Kuwait, Saudi Arabia (collectively 80-85% of imports).
- US LPG (from shale gas production) currently accounts for approximately 10% of India's annual LPG imports.
- The Pradhan Mantri Ujjwala Yojana has expanded LPG connections to rural poor households since 2016, making LPG price stability a significant social welfare concern.
Connection to this news: The absence of LPG strategic reserves means India's buffer is limited to commercial pipeline stocks (~30 days), making rapid alternative sourcing logistically urgent.
Energy Diversification and India's Strategic Petroleum Reserves (SPR)
India established the Indian Strategic Petroleum Reserves Limited (ISPRL) under the Ministry of Petroleum and Natural Gas to build emergency crude oil storage capacity. The SPR programme was launched after the Kargil War highlighted India's energy vulnerability.
- Current SPR capacity: 5.33 million metric tonnes (MMT) — distributed across Vishakhapatnam (1.33 MMT), Mangaluru (1.5 MMT), and Padur (2.5 MMT).
- This provides approximately 9.5 days of crude consumption from strategic reserves alone; combined with commercial stocks, total reserve cover is approximately 74 days.
- The IEA benchmark for member countries is 90 days of net oil imports — India has not yet achieved this.
- Expansion plans include new facilities at Chandikhol (Odisha, 4 MMT) and additional Padur capacity on PPP mode, targeting 15 MMT total SPR capacity.
- There is no equivalent strategic LPG reserve programme — a gap exposed by the current crisis.
Connection to this news: The 30-day commercial LPG buffer, without any strategic reserve backstop, underscores the structural vulnerability in India's energy security architecture specifically for LPG.
US LPG as an Alternative: Shale Revolution and Logistics
The US shale gas revolution has made the US the world's largest LPG exporter, primarily from the Gulf Coast (via the Houston Ship Channel and the Marcus Hook facility on the East Coast). US LPG is predominantly propane and is exported as LPG on Very Large Gas Carriers (VLGCs).
- The US exported approximately 1.6 million barrels per day of LPG in 2024, making it the world's top exporter.
- Freight from the US Gulf Coast to India takes approximately 25-30 days compared to 7-12 days from Gulf producers.
- US LPG is competitively priced when oil prices are elevated, but additional freight costs narrow the margin.
- India's Adani Enterprises and IOC have existing long-term agreements with US LPG exporters.
- Spot LPG procurement from the US, Russia (Sibur), and Argentina (YPF) can partially bridge supply gaps but cannot fully replace Gulf volumes in the short term.
Connection to this news: The US can supply additional LPG to India, but longer transit times, freight costs, and vessel availability constraints mean substitution will be partial and price-inflationary in the near term.
Key Facts & Data
- India has approximately 310 million active LPG consumer connections as of 2025.
- The Pradhan Mantri Ujjwala Yojana has provided free LPG connections to over 100 million below-poverty-line households since 2016.
- India's monthly LPG imports (Feb 2026): 2.03 million tonnes; Gulf share: ~1.66 million tonnes.
- Strait of Hormuz: 33 km wide at narrowest point; 20 million barrels/day of oil transits daily.
- India's SPR crude oil reserve: 5.33 MMT (~9.5 days of consumption from strategic stocks alone; ~74 days combined with commercial stocks).
- India has no strategic LPG reserve; commercial stocks provide approximately 30 days of cover.
- US LPG transit time to India: 25-30 days (vs 7-12 days from Gulf).