The 'technical' closure of the Strait of Hormuz has sent shockwaves through India’s energy sector, exposing a critical vulnerability in the nation’s supply chain. With India consuming approximately 33 million tonnes of LPG in 2025 and relying on the Middle East for 90% of its imports, the current blockade has left the country facing a projected supply shortfall of 1.0 million tonnes for March and April 2026. Unlike crude oil, which benefits from strategic reserves, India’s LPG infrastructure operates on a just-in-time basis with only seven to ten days of inventory.
To mitigate the shortfall, Indian buyers are pivoting toward Atlantic Basin suppliers, including the United States, Canada, and Argentina. However, this shift comes with significant logistical hurdles. Voyages from the US Gulf Coast require 35–40 days, compared to the 10–12 day transit time from Middle Eastern terminals. Furthermore, the chemical composition of US-sourced gas—largely propane-rich—differs from the butane-heavy blends required by the domestic Indian market, complicating rapid substitution efforts.
Simultaneously, the maritime safety landscape has deteriorated. The Suezmax tanker *Jag Laadki*, operated by The Great Eastern Shipping Company, recently faced a direct threat when a drone attack struck the Fujairah oil terminal during cargo loading. While the vessel and its crew remained unharmed and successfully departed for India, the incident has highlighted the escalating risks for Indian-flagged vessels operating in the region.
Government authorities are now on high alert, with the Directorate General of Shipping actively monitoring 22 Indian-flagged vessels—carrying over 600 seafarers—currently positioned west of the Persian Gulf. This heightened security environment has forced refiners to prioritize residential cooking fuel demand, potentially at the cost of throttling operating rates at petrochemical plants.
Adding to the industry's woes, TotalEnergies has reported that regional conflict has forced the shutdown or pre-emptive closure of offshore production assets in Qatar, Iraq, and the UAE. This disruption affects roughly 15% of the company's global output, further tightening global supply chains and keeping crude prices volatile.
As the crisis persists, Indian authorities continue to explore long-term strategies to buffer against such disruptions. From maximizing domestic LPG recovery to managing the transition toward diverse, albeit costlier, international supply routes, the nation faces a challenging path ahead. The stability of the Strait of Hormuz remains the linchpin, and until freedom of navigation is fully restored, the volatility in freight markets and supply reliability is expected to endure.