India successfully navigated the 100-day disruption of the Strait of Hormuz without any retail fuel shortages, thanks to a decade-long strategy of diversifying its energy supply sources and building resilient infrastructure. The crisis, which threatened over 40% of India's crude imports, 80% of LPG imports, and 55% of LNG imports, was absorbed by a system designed for flexibility and redundancy.
41-Country Supplier Base Enabled Rapid Sourcing Shift
India expanded its crude supplier base from 27 countries in 2006-07 to 41 countries today. This breadth allowed non-Hormuz sourcing to rise from roughly 55% to about 70% during the disruption. Barrels were replaced by cargoes from Russia, the Atlantic basin, the Americas, and West Africa—relationships built over years. In contrast, China cut crude imports by 45%, Southeast Asian refiners slashed throughput, and Japan and South Korea leaned heavily on strategic reserves. India maintained refinery runs at full capacity and ended the disruption with inventory intact.
LPG Supply Protected Through Domestic Production Boost and Import Terminals
With over 80% of LPG normally transiting Hormuz, cooking gas was the tightest commodity. The LPG Control Order of 8 March directed refineries to maximize yields, lifting domestic production from 35 TMT/day to 54 TMT/day. The 22 LPG import terminals now operating, compared to 11 in 2014, provided alternative entry points. The price to an Ujjwala beneficiary was held at Rs 642 while the global market convulsed, even as the import-linked cost exceeded Rs 1,600 per cylinder.
Refining Flexibility and Natural Gas Resilience
Indian refineries are configured to process a wide range of crude grades. When Gulf barrels stopped arriving, units changed their menu. Every PSU refiner maintained throughput at 100% without a single shutdown. Stocks of petrol, diesel, and aviation turbine fuel never fell below a 60-day cover. Natural gas supplies to PNG and CNG consumers experienced zero disruption, with total supply recovering to 96% of pre-war levels by June through alternate LNG sourcing and cross-ministry coordination. The PNG 2.0 drive tripled new daily household connections, permanently reducing dependence on imported LPG.
Cost of Stability: OMCs Absorbed Rs 61,000 Crore Losses
Keeping pump prices stable while Brent crude rose from about US$70 to roughly US$126 a barrel required absorbing the difference. Oil marketing companies carried losses of Rs 61,000 crore in the first quarter alone, on top of Rs 30,000 crore committed the prior year to hold cooking-gas prices. The government's excise duty cut held consumer-facing damage to that amount, taking the shock onto the public balance sheet—a deliberate consumer-first energy policy choice.
Strategic Reserves and Commercial Stocks Filled the Gap
India's preparedness extended beyond crude procurement. Strategic petroleum reserves, increased commercial inventories, flexible refinery configurations, and robust shipping arrangements provided additional layers of resilience. However, India holds only 9.5 days of strategic crude reserves; commercial stocks filled the gap this time. The article notes that expanding strategic petroleum reserves to Bikaner and Bina, establishing an Energy Security Fund, advancing the Oman-Gujarat deepwater pipeline, operationalising a joint fleet of 62 owned vessels, and capping any single supply region at under 40% of imports would strengthen the architecture for future disruptions.
Lessons for Energy-Importing Nations
India's experience demonstrates that diversification is a strategic investment in national energy security. By structurally breaking a decades-long reliance on the Strait of Hormuz and cultivating a diversified global import portfolio, India navigated the 2026 energy crisis effectively. The 41-country supplier base, configurable refineries, 22 import terminals, and 20% ethanol blending programme were built for resilience as a principle, and the emergency proved the principle sound. The question now is whether this becomes an archived episode or the baseline for a structural upgrade.
