What Happened
- Following the effective closure of the Strait of Hormuz due to the West Asia conflict, India rerouted approximately 70% of its crude imports through alternative maritime routes, away from the Strait.
- The government issued a refinery directive on March 8, 2026 under the LPG Control Order, mandating all refineries to maximise LPG production by channelling the entire output of C3 and C4 hydrocarbon streams — comprising propane, butane, propylene, and butenes — exclusively to OMCs for domestic cooking gas.
- As a result of this emergency production prioritisation, domestic LPG output from refineries increased by approximately 25% within five days, reducing the demand–supply gap.
- Energy supplies for the country were declared secure, with officials assuring that both crude oil stockpiles and refinery production capacity are being fully utilised.
- The route diversification represents a dramatic shift from the previous year, when roughly 45% of India's crude imports transited through the Strait of Hormuz.
Static Topic Bridges
Strait of Hormuz — Strategic Chokepoint
The Strait of Hormuz is a narrow waterway approximately 33 kilometres wide at its narrowest point, located between Iran to the north and Oman and the UAE to the south. It is the world's single most important oil transit chokepoint: approximately 20–21 million barrels of oil per day, or roughly 20–21% of global petroleum liquids consumption, transit through it. For India, historically about 55–60% of crude oil and nearly 90% of LPG imports passed through the Strait, making any disruption an existential energy security risk.
- Location: Between Iran and the Oman/UAE coastline, connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea
- Width at narrowest point: ~33 km, with a shipping lane of only 3.2 km in each direction
- Daily oil transit: ~20–21 million barrels (approx. 20% of global oil liquids trade)
- LNG transit: ~25–30% of global LNG exports pass through the Strait
- Bordering countries: Iran (north), Oman (south), UAE (south)
- Alternative routes for Persian Gulf producers: The Arab Pipeline (East-West Pipeline) across Saudi Arabia to Yanbu on the Red Sea
Connection to this news: India's success in rerouting 70% of crude imports away from the Strait demonstrates both the risk concentration that existed before and the practical limits of such rerouting — only a proportion can be redirected at short notice due to tanker contracts, port capacity, and crude grade availability.
India's Crude Import Diversification Strategy
India is the world's third-largest crude oil importer and the third-largest consumer of petroleum. Historically over-dependent on Gulf suppliers, India has pursued a strategy of diversifying crude sources over the past decade — expanding from 27 to 41 countries by 2026. Key non-Hormuz sources include Russia (which dramatically increased its share post-2022 sanctions), the United States (via Atlantic Basin routes), Brazil (deep-water crude), Africa (Nigeria, Angola, Libya), and Central Asian pipelines (Iran via Chabahar when sanctions permit).
- India's crude oil import bill: ~$100–130 billion per year, accounting for the largest share of India's import basket
- Russia's share in India's crude imports rose from under 1% pre-2022 to over 40% by 2025
- Non-Gulf sources (Russia, USA, Brazil, Africa) reduced reliance on Hormuz-route crude
- India expanded crude import sources from 27 to 41 countries over the past 11 years
- Refinery configuration: Indian refineries are configured to handle varying grades of crude, enabling supply flexibility
Connection to this news: The ability to reroute 70% of crude imports to non-Hormuz routes is a direct dividend of the diversification strategy pursued over the past decade, illustrating how UPSC tests the strategic logic behind policy decisions.
LPG Refinery Production Process and C3/C4 Streams
LPG (Liquefied Petroleum Gas) is a blend of propane (C3) and butane (C4) — light hydrocarbons that are extracted during crude oil refining and natural gas processing. In a refinery, the atmospheric distillation unit separates crude into fractions; the C3/C4 cut is typically sent to catalytic cracking or alkylation units for petrochemical production or fuel blending. By redirecting this stream entirely to LPG production, refineries can boost LPG output at the cost of reduced petrochemical and motor fuel production — a trade-off the government chose to protect household cooking gas supply.
- India's refining capacity: approximately 254 MMTPA (million metric tonnes per annum) as of 2025, one of the largest in Asia
- LPG yield in a refinery: typically 3–7% of crude processed; can be maximised by adjusting distillation settings and allocating C3/C4 streams
- C3 = propane; C4 = butane/butylene/propylene — the primary feedstocks for both LPG and petrochemicals
- Key public sector refiners: Indian Oil (Panipat, Mathura, Barauni), BPCL (Mumbai, Kochi), HPCL (Mumbai, Visakh), MRPL (Mangaluru), CPCL (Chennai)
- Private refiners: Reliance Industries (Jamnagar — world's largest refining complex), Nayara Energy (Vadinar)
Connection to this news: The 25% production boost achieved by the March 8 Control Order demonstrates that refinery flexibility is India's primary short-term buffer against import disruption — a key concept for understanding India's energy resilience.
Key Facts & Data
- 70% of India's crude imports rerouted outside the Strait of Hormuz following the West Asia conflict
- Prior dependence: ~45% of crude imports transited the Strait historically
- LPG domestic production increased ~25% within 5 days of the March 8, 2026 refinery directive
- India imports ~60% of its LPG; ~90% of those imports historically via the Strait of Hormuz
- India's refining capacity: ~254 MMTPA, among the highest in Asia
- Strait of Hormuz carries ~20–21 million barrels/day, approximately 20% of global petroleum liquids
- India expanded crude import sources from 27 to 41 countries over the past 11 years
- Strategic Petroleum Reserves: 5.33 MMT at Vishakhapatnam (1.33 MMT), Mangaluru (1.5 MMT), and Padur (2.5 MMT)