New Delhi, June 29 -- Energy security is often tested not during periods of stability but during moments of geopolitical uncertainty. The recent disruptions surrounding the Strait of Hormuz demonstrated that countries dependent on imported energy require more than short-term crisis management-they need decades of strategic planning, diversified supply chains, robust infrastructure, and flexible procurement mechanisms.
When the Strait of Hormuz closed to commercial shipping in late February 2026, global energy markets braced for severe shortages. The Strait carries nearly one-fifth of global LNG trade, and for India, more than half of its imported LNG normally transits this narrow waterway. Within days, LNG vessel movements through the corridor-which had averaged 104 transits every month before the crisis-collapsed to near zero, while international spot LNG prices surged by 44 per cent.
India was unquestionably exposed. Total gas availability declined from about 193 million standard cubic meters per day (MMSCMD) before the crisis to nearly 145 MMSCMD at its lowest point in March-a reduction of almost one-fourth in less than three weeks. Yet, beyond the hundred-day mark, the most remarkable aspect of India's response was the complete absence of disruption. Households continued receiving piped natural gas (PNG), CNG stations remained operational, fertilizer production continued, and electricity generation was maintained without widespread interruptions.
This resilience was neither accidental nor improvised. It was the culmination of policy decisions, infrastructure investments, and procurement strategies pursued consistently over nearly three decades.
Building Resilience Before the Crisis
India's natural gas security strategy began long before LNG became a globally traded commodity. When India entered into its first long-term LNG contracts with Qatar in the late 1990s, the United States had not yet emerged as an LNG exporter, Australia's large export projects were still under development, and the global market was small and inflexible. Even then, policymakers recognized that depending on a single supplier or transportation route would eventually become a strategic vulnerability.
Over the following decades, India steadily diversified both its suppliers and its infrastructure. India's domestic gas output of roughly 90 million SCMD underpins supply, but LNG imports fill the gap. To secure these imports, long-term contracts were concluded with Qatar, Australia, and later the United States, while additional cargoes were sourced from Oman, the UAE, Russia, and other producers across multiple continents.
Infrastructure development progressed alongside procurement diversification. Successive governments invested in LNG receiving terminals across both coasts, expanding the national gas grid so that gas received at any landing point could be routed inland. Today, India boasts an integrated network of operating and developing LNG import terminals connected via expanding pipelines. This structural flexibility fundamentally changed India's energy security architecture, allowing the nation to redirect supplies and optimize flows across regions rapidly.
Diversified Procurement and Diplomatic Agility
The immediate response to the February 2026 crisis focused on replacing disrupted Gulf cargoes through alternative, chokepoint-free suppliers. Because India had built a diversified procurement portfolio rather than relying on one producing region, it quickly rebalanced its import basket. Long-term contracts ensured baseline availability, while public and private importers moved rapidly into international spot markets to secure replacement volumes from the United States, Australia, and other non-Gulf partners.
This commercial flexibility was reinforced by highly effective state diplomacy and security operations:
* Vessel Exemptions: India was one of only five nations to secure Hormuz vessel exemptions, with nine India-flagged vessels cleared by early April. This required years of deep relationship-building in the Gulf, rather than weeks of crisis lobbying.
* Operation Urja Suraksha: The Indian Navy provided vital naval escorts and security assurances throughout the crisis, protecting vulnerable shipping assets.
Demand Management: Triage by Social Cost
The hardest decision during March 2026 was determining how to allocate the 25 per cent drop in gas availability. The Government introduced a transparent allocation framework through the Natural Gas Supply Regulation Order. Rather than letting market disruptions indiscriminately impact vulnerable consumers, gas was prioritized according to national importance and social cost:
This calibrated demand management successfully minimized economic shock. The sectors that took the hardest hits were precisely those most capable of absorbing short-term reductions.
Price Pooling and Coordinated Recovery
Supply management was further stabilized through an innovative price pooling mechanism. During the peak of the disruption, global spot LNG prices surged by 44 per cent. By combining lower-cost, long-term contracted LNG with higher-cost emergency spot purchases, the Government moderated the overall cost increase. This distributed the financial burden evenly across priority consumers, preventing abrupt price shocks from cascading through sectors like city gas distribution and agriculture.
Through the coordinated action of government departments, Central Public Sector Enterprises (CPSEs), and private operators, supply chains were systematically resolved. A dedicated Joint Working Group kept petrochemical feedstock flowing to pharmaceuticals and critical industries. From the March trough of 145 MMSCMD, total supply was successfully rebuilt to 186 MMSCMD by late June-restoring 96 per cent of pre-war levels without widespread shortages or prolonged industrial shutdowns.
Remarkably, India even accelerated new PNG connections during this period. City gas distribution task forces tripled daily new household connections from 3,000 to 9,000, systematically reducing long-term dependence on imported Liquefied Petroleum Gas (LPG).
Future Roadmap: What Still Needs to Be Built
While the Hormuz crisis revealed the underlying strength of India's gas infrastructure, it also served as a live test highlighting critical gaps that still need to be addressed. Unlike major consuming nations that rely on massive underground storage to cushion supply shocks, India holds virtually no dedicated strategic natural gas reserve.
To move from supply resilience to total energy independence, the next logical steps are clear:
* Establish Strategic Gas Storage: Implement a phased roadmap for LNG-based and underground gas storage facilities to provide a buffer across prolonged disruptions.
* Accelerate the across-border Pipeline: Move the onland/deepwater pipeline from feasibility to financing.
* Scale Up Domestic Compressed Biogas: Leverage the SAMPURN GOBARdhan scheme to substitute imported LNG with domestic compressed biogas at scale, displacing foreign molecules with domestic production.
* Execute PNG 2.0: Advance the PNG 2.0 target to enhance piped connections beyond the current 1.7 crore households. Treat this as a national security program; each new connection permanently insulates another family from global LPG import shocks.
The Ultimate Lesson
The profound lesson of the Hormuz crisis is that true energy security cannot be built during an emergency. It requires decades of sustained investment, supplier diversification, and flexible policy instruments working together as an integrated system.
No country buys its way out of a crisis with reserves alone; it manages its way out using systems built long before the crisis begins. India did not get lucky in 2026. The diversified sourcing, terminal expansion, national pipeline grid, and robust allocation frameworks were strategic choices made patiently over decades. When the crisis arrived, those decisions did the work-and ensured that India's natural gas sector did not blink.
Views expressed are personal. The writer is a former Chairman and Managing Director of GAIL (India) Limited
Published by HT Digital Content Services with permission from Millennium Post.