The Iran-US conflict has already impacted India's energy landscape, particularly its liquefied petroleum gas (LPG) market. Now, the focus shifts to the country's piped natural gas (PNG) network, which is under scrutiny due to the potential disruption in the Strait of Hormuz. This narrow maritime passage is a critical route for LNG imports, and any disruption could have significant implications for India's gas supply.
India's piped gas supply is a delicate balance of domestic production and imports. While the country has a substantial domestic gas supply, sourced from onshore and offshore fields by companies like ONGC and Reliance, a significant portion of its gas needs are met through imports. In 2025, India imported around 24-25 million tonnes of LNG, making it one of the world's largest buyers. Over half of these imports are sourced from Qatar, with smaller volumes coming from the US, Australia, Russia, and parts of Africa.
The Strait of Hormuz is a critical chokepoint for these imports, and the conflict has raised concerns about the flow of LNG cargoes. Tankers loaded before the conflict escalated are still sailing, but exports from Qatar's Ras Laffan LNG complex have been halted since March 2nd. This means that the vessels carrying these shipments could be among the last until safe passage through Hormuz resumes.
The impact of this disruption is twofold. Firstly, it highlights a structural vulnerability in India's gas supply. Unlike crude oil, India does not maintain strategic reserves of LNG, and its gas is stored mainly as working inventory at regasification terminals. These stocks are modest and cover only about one to two weeks of imports, depending on terminal operations and cargo schedules. Secondly, the disruption could lead to higher prices and weaker industrial demand.
The immediate risk for urban consumers using piped gas is price rather than shortage. If the disruption at Hormuz persists, India's gas market will adjust through higher prices and reduced industrial demand. Households may continue to use their kitchen taps, but at a higher cost. In the end, both homes and factories will pay more, with industry bearing the brunt of the deeper cuts. This situation underscores the importance of diversifying India's energy sources and ensuring a robust supply chain to mitigate the impact of global conflicts on its energy security.
