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GS Paper: GS3-13.Infrastructure: Energy, Ports, Roads, Airports, Railways

  • India cushions energy security against the Strait of Hormuz disruption

    Why in the News?

    India’s Liquefied Natural Gas (LNG) imports rose despite disruption to shipping through the Strait of Hormuz during the West Asia conflict. Imports were diversified to the United States, Nigeria, Oman, and Angola as supply from Qatar collapsed. The Oil and Natural Gas Corporation (ONGC) will also reserve half its Mangaluru facility as a strategic petroleum reserve, exposing the link between supply diversification and physical storage in energy security.

    What is the Strait of Hormuz?

    1. The Strait of Hormuz is the narrow waterway between Iran and Oman connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is a critical energy chokepoint.
    2. Strategic weight: The strait usually carries about a fifth of global oil and LNG shipments. Its disruption during the conflict threatened a large share of India’s gas supply.

    What is Liquefied Natural Gas (LNG)?

    1. Definition: LNG is natural gas cooled to liquid form for transport by ship over long distances. It is regasified at import terminals for use.
    2. India’s dependence: LNG imports meet about half of India’s natural gas requirement. Around 60% of those imports came through the Strait of Hormuz, mainly from Qatar and the UAE.

    How did India cushion the disruption?

    1. Higher overall imports: LNG imports in May-July rose 15.4% year-on-year to 7.08 million tonnes. This followed a near 13% dip in March-April, the first two months of the war.
    2. Supplier diversification: The United States supplied 2.19 million tonnes, up sharply year-on-year. Oman, Nigeria and Angola also rose steeply.
    3. Russian Crude: Russia increased its share to supply roughly 40% of India’s crude imports, bypassing the Hormuz chokepoint entirely.
    4. Collapse of traditional sources: Supply from Qatar plunged 91.3% to 0.23 million tonnes, against a monthly average of 1 million tonnes in 2025. UAE fell 34.4% to 0.55 million tonnes.
    5. Supply over price: India prioritised securing volumes over price to meet demand from city gas, fertiliser, power, and ceramics. LNG prices are expected to stay high, near 19 to 20 dollars per million British thermal units.
    6. Infrastructure Adaptability: West coast terminals like Mundra handled very large crude carriers (VLCCs) from non-Middle Eastern channels.
    7. Ethanol Blending: E20 petrol implementation reduced overall crude import demand by substituting 20% of domestic petrol with local ethanol.

    What is a Strategic Petroleum Reserve?

    1. Definition: A strategic petroleum reserve is a stockpile of crude oil held to cushion supply shocks and price spikes. It is drawn down during import disruptions.
    2. ONGC facility: ONGC is developing a 1.75 million metric tonne facility at Mangaluru. Half of this storage will be reserved as strategic storage, with the rest for commercial operations.
    3. Current buffer: India’s existing crude and petroleum product storage can meet about 74 days of net crude import requirements. The government plans an additional 6.5 million metric tonnes, including at Chandikhol in Odisha and Padur in Karnataka.

    What are the challenges to India’s energy security buffer?

    1. Chokepoint concentration: A single waterway still carries most of India’s Gulf LNG. Any renewed closure of the strait re-exposes this dependence.
    2. Price-driven demand loss: High LNG prices push price-sensitive sectors like industry and power to alternative fuels. This demand destruction undercuts LNG’s role in the energy mix.
    3. Storage gap: A 74-day buffer sits below the 90-day cover the International Energy Agency recommends. Planned reserves are years from completion.
    4. Import dependence: India imports the bulk of its crude and much of its gas. Diversification reduces but does not remove the exposure to external shocks.
    5. Transit workarounds: Some suppliers exported by switching off tanker transponders to evade detection. Such tactics reflect the fragility of normal shipping through the region.

    Conclusion

    India managed the Hormuz disruption by rapidly re-routing LNG procurement to unaffected suppliers rather than cutting imports. The current status is a diversified supplier mix dominated by the United States and Oman, with strategic storage being expanded at Mangaluru and new sites. The next milestone is commissioning the additional 6.5 million tonnes of reserve capacity to lift the buffer toward international norms.

    Back2Basics

    Strategic Petroleum Reserve (SPR)

    1. Definition: A Strategic Petroleum Reserve (SPR) is an emergency crude oil stockpile to protect against supply and price shocks.
    2. Manager: India’s SPR programme is run by Indian Strategic Petroleum Reserves Limited (ISPRL) under the Ministry of Petroleum and Natural Gas.
    3. Phase I sites: Visakhapatnam, Mangaluru, and Padur, with a combined capacity of about 5.33 million metric tonnes.
    4. Global benchmark: The International Energy Agency recommends reserves covering 90 days of net oil imports.
    5. Hormuz significance: The Strait of Hormuz handles roughly a fifth of global oil and LNG trade, making it the world’s most critical oil chokepoint.

    PYQ Relevance

    [UPSC 2025] ‘Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.’ How would you integrate energy security with India’s foreign policy trajectories in the coming years?

    Linkage: UPSC recognises energy security as a key determinant of India’s foreign policy and strategic engagement with West Asia. The article shows how supplier diversification, strategic petroleum reserves, and secure maritime supply routes strengthen India’s energy security amid geopolitical disruptions.