25% of India’s Gas Supply Hit by Iran-US War; Government Secures Alternative Energy Routes

India’s energy security has come under pressure amid the ongoing conflict involving Iran, the United States and Israel, with officials confirming that nearly 25% of the country’s natural gas requirements have been disrupted due to force majeure conditions declared by overseas suppliers.

Senior government officials said the disruption has forced India to source gas and crude supplies through alternative routes and suppliers in order to maintain stable fuel availability in the country.

The developments highlight the vulnerability of global energy supply chains during geopolitical conflicts, particularly for import-dependent economies like India.

Nearly One-Fourth of Gas Supply Affected

India currently consumes about 189 million metric standard cubic metres per day (MMSCMD) of natural gas. Of this, roughly 97.5 MMSCMD is produced domestically, while the remaining portion is imported to meet demand.

According to Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, 47.4 MMSCMD of imported gas has been affected due to force majeure clauses invoked by international suppliers as a result of the escalating conflict in West Asia.

Force majeure clauses allow suppliers to suspend or reduce deliveries when extraordinary events such as wars or geopolitical disruptions make it difficult or unsafe to continue operations.

Speaking at a briefing, Sharma explained that the government and energy companies are working rapidly to offset the disruption by securing gas from new sources.

Two liquefied natural gas (LNG) cargoes purchased from alternative suppliers are already on their way to India and are expected to help stabilize supplies in the near term.

Strait of Hormuz Disruption Raises Energy Concerns

A key factor behind the supply disruption is the situation in the Strait of Hormuz, one of the world’s most critical oil and gas shipping corridors.

The narrow maritime passage connects the Persian Gulf to the Arabian Sea and is used by major oil-producing nations in the Middle East to export energy supplies to global markets.

Nearly 50% of India’s crude oil imports normally pass through the Strait of Hormuz, making it a vital route for the country’s energy security.

However, tensions in the region have severely restricted tanker movement through the corridor, raising fears of supply disruptions and price volatility.

India is heavily dependent on energy imports, meeting about 85% of its oil demand through foreign suppliers, making such disruptions a serious concern for policymakers.

Government Says Crude Oil Supply Remains Secure

Despite the disruption to natural gas imports, officials have assured that India’s crude oil supply remains stable.

India consumes approximately 5.5 million barrels of crude oil per day, and officials said the country has diversified its supply sources to reduce reliance on the Gulf shipping corridor.

According to Sharma, India currently imports crude oil from around 40 different countries, which helps ensure continuity of supply even when a particular route or supplier faces disruption.

In fact, the government says diversification efforts have resulted in 70% of India’s crude imports now coming through routes outside the Strait of Hormuz, compared to around 55% earlier.

Officials added that two crude oil cargoes sourced from new suppliers are expected to reach India within the next few days, further strengthening the country’s energy supply position.

Refineries Running at Maximum Capacity

To maintain adequate fuel availability, Indian refineries have ramped up operations.

Officials said several refineries are currently operating at their highest capacity levels, with some running at more than 100% utilization.

Higher refinery throughput is helping boost the domestic production of petroleum products and liquefied petroleum gas (LPG), which is widely used as cooking fuel across Indian households.

Government Invokes Essential Commodities Act

To ensure that critical sectors receive adequate gas supplies, the government invoked the Essential Commodities Act on March 9.

The measure allows authorities to prioritize gas allocation to essential sectors, including:

• Household cooking gas supply
• The automobile sector, particularly vehicles using compressed natural gas (CNG)
• Public transportation systems

Officials said the move is aimed at protecting essential consumption while managing limited supplies.

LPG Supplies Also Under Pressure

India imports about 60% of its liquefied petroleum gas (LPG) requirements, and a significant portion of these imports travels through the Strait of Hormuz.

According to officials, nearly 90% of India’s LPG imports normally pass through the strait, making the conflict-affected route crucial for household cooking gas supply.

To address the shortfall, the government directed Indian refineries on March 8 to increase LPG production.

These measures have resulted in a 25% rise in domestic LPG output, helping meet the cooking gas needs of households across the country.

Priority Allocation for Essential Institutions

With supply disruptions continuing, authorities have introduced a priority-based LPG distribution system.

Non-domestic LPG supplies will first be directed toward essential institutions such as:

• Hospitals
• Educational institutions

To manage commercial LPG distribution, a three-member committee consisting of senior officials from state-run oil marketing companies (OMCs) has been established.

The panel is consulting with state governments and industry groups to finalize a plan that ensures fair distribution of available LPG supplies among commercial users such as restaurants and hotels.

Supply Adjustments for Industrial Consumers

While essential sectors are being protected, some industrial consumers are expected to face reduced gas supplies.

Officials said:

• Commercial customers connected to the gas grid, including the tea industry, will receive around 80% of their average gas supply over the past six months.
• Refineries and petrochemical plants may experience supply reductions of around 35%.

These adjustments are intended to ensure that households and essential sectors continue to receive uninterrupted fuel supplies.

Government Absorbing LPG Price Shock

The geopolitical tensions have pushed up global fuel prices, but the government has taken steps to shield consumers from the full impact.

Officials said the government has absorbed a significant portion of the increase in LPG costs to keep household cooking gas affordable.

Currently, the price of a domestic LPG cylinder in New Delhi stands at ₹913 after a recent ₹60 increase.

Without government intervention, officials said the price would have been substantially higher.

To compensate oil marketing companies for selling LPG below market rates, the government has approved ₹30,000 crore in compensation to cover under-recoveries.

Measures to Prevent Panic Buying

Authorities have also warned against panic buying and hoarding of LPG cylinders.

Officials said misinformation circulating on social media has triggered concerns among consumers, prompting the government to monitor distribution closely.

Officers from oil marketing companies and anti-adulteration units are coordinating efforts to ensure smooth deliveries and prevent stockpiling.

India Strengthens Energy Security Strategy

The current crisis has once again highlighted the importance of diversification in India’s energy strategy.

Experts believe India will likely accelerate efforts to:

• Increase domestic gas production
• Expand LNG import infrastructure
• Diversify crude oil suppliers
• Invest in renewable energy sources

Such steps are aimed at reducing dependence on geopolitically sensitive supply routes such as the Strait of Hormuz.

As tensions in West Asia continue, energy markets remain volatile, and policymakers are closely monitoring developments that could affect global supply chains.

Summary

• Nearly 25% of India’s natural gas imports have been disrupted due to force majeure conditions linked to the conflict involving Iran, the United States and Israel.
• Around 47.4 MMSCMD of imported gas supply has been affected, officials said.
• The disruption is linked to tensions in the Strait of Hormuz, a key route for global oil and gas shipments.
• India has sourced alternative LNG cargoes and diversified crude imports to maintain supply stability.
• Refineries are operating at maximum capacity and domestic LPG production has increased by 25%.
• The government has invoked the Essential Commodities Act to prioritize gas supplies for households and essential sectors.
• LPG prices are being partially subsidized, with ₹30,000 crore compensation approved for oil marketing companies.

Disclaimer

This article is based on publicly available information and official statements. The content is intended for informational purposes only. The publication does not independently verify third-party claims or assertions mentioned in the international developments.