The conflict involving Iran and the Israel-US is beginning to impact India’s energy market, with natural gas and LPG supplies tightening as disruptions in the Strait of Hormuz affect global shipments. India relies heavily on imported gas to meet domestic demand.
The Strait of Hormuz is one of the world’s most critical energy transit routes. However, tanker traffic through the corridor has been disrupted amid rising security risks as Iran continues to target vessels passing through the region. Several global suppliers have already issued force majeure notices on gas shipments due to the disruption.
How it impacts India?
The global gas supply shock triggered by disruptions in the Strait of Hormuz is beginning to ripple through Indian markets, putting several sectors and listed companies in focus. Fertiliser, city gas distribution, quick-service restaurants (QSR) and consumer durables companies could face operational and cost pressures as LPG and LNG supplies tighten. Stocks such as Petronet LNG, GAIL, Chambal Fertilizers, IGL, Jubilant FoodWorks and Devyani International are likely to remain under the spotlight as rising fuel costs and supply constraints threaten to squeeze margins across industries.
“Amid disruptions to LNG imports, the impact across the oil and gas value chain is likely to follow the government’s revised gas allocation framework. Under the Natural Gas (Supply Regulation) Order, 2026, supplies are prioritised for domestic PNG, CNG used in transport and LPG production, with these segments receiving close to 100% of their recent consumption, while industrial and commercial users may be limited to roughly 80% of prior usage,” said Dhaval Popat, Energy Analyst at Choice Institutional Equities.
India imports more than 60% of its LPG consumption, and roughly 85–90% of these imports typically pass through the Strait of Hormuz, making the country particularly vulnerable to disruptions in the route.
LPG, which is widely used in household cooking cylinders and commercial establishments, is the most sensitive fuel during the crisis because supply constraints can quickly translate into higher household costs. India imported about 31.3 million tonnes of LPG in FY25, while domestic production stood at just 12.8 million tonnes, highlighting the country’s reliance on overseas supplies.
The crisis intensified last week after Qatar halted LNG production at a major export facility following an Iranian drone strike, disrupting cargo shipments to several countries, including India. QatarEnergy subsequently issued a force majeure notice to Petronet LNG, India’s largest LNG importer.
As a result, GAIL said gas supplies routed through Petronet LNG under its long-term contract had effectively dropped to zero during the disruption, tightening availability for downstream sectors.
The supply squeeze has already pushed prices higher. Domestic LPG cylinder prices have risen by about ₹60, while commercial LPG prices have increased by ₹114.5. European gas prices have also surged nearly 40%, reflecting the wider impact of the disruption on global markets.
The Indian government has moved to manage supplies during the crisis.
“In light of current geopolitical disruptions affecting fuel supply and constraints on LPG availability, the ministry has directed oil refineries to increase LPG production and divert the additional output towards domestic consumption,” the Ministry of Petroleum and Natural Gas said in a post on X.
“The ministry has prioritised domestic LPG supply to households and introduced a 25-day inter-booking period to prevent hoarding and black marketing. Imported LPG supplies are being prioritised for essential non-domestic sectors such as hospitals and educational institutions,” it added.
Moreover, the government has also issued the Natural Gas (Supply Regulation) Order, 2026, prioritising gas allocation for PNG, CNG and LPG production during the supply crunch. However, analysts warn that if tensions in the Middle East persist, gas supply disruptions could continue and keep energy prices elevated in India.
Sectors and Stocks to be impacted
Rising gas prices and supply disruptions triggered by the closure of the Strait of Hormuz are beginning to ripple across Indian stock markets, putting several sectors and listed companies under pressure.
Restaurant and food delivery companies are also likely to remain under the spotlight. Stocks including Eternal, Swiggy, Jubilant FoodWorks (Domino’s), Devyani International, Sapphire Foods (KFC and Pizza Hut), Westlife FoodWorld (McDonald’s) and Speciality Restaurants could face operational pressure as LPG shortages hit commercial kitchens. Restaurants in cities such as Mumbai and Bengaluru have already warned of possible closures due to limited fuel availability.
Gas-linked companies including Gujarat Gas, Adani Total Gas are also likely to feel the impact. Petronet LNG faces direct exposure to cargo disruptions from Qatar, while GAIL could see lower pipeline throughput as supply tightens. City gas distributors IGL and MGL may struggle to secure supplies while managing higher costs for CNG and PNG, posing risks to both volumes and margins.
“City gas distributors with higher exposure to industrial and commercial segments such as Gujarat Gas are likely to face the most negative impact through lower volumes and potential margin pressure. Conversely, distributors with greater exposure to transport (CNG) and household PNG segments, such as IGL and MGL remain relatively insulated due to their priority allocation status. For refineries, the disruption may require partial substitution away from LNG toward alternative fuels; however, the overall impact on refining operations is expected to remain relatively limited,” noted Popat.
Moreover, Fertiliser companies such as GNFC, Chambal Fertilizers, Rashtriya Chemicals & Fertilizers (RCF), FACT and Deepak Nitrite could face pressure if LNG shortages persist. Urea production relies heavily on imported LNG, and disruptions could impact supply just as farmers prepare for the summer and upcoming kharif crop seasons. India also imports nearly all of its muriate of potash and about 60% of di-ammonium phosphate (DAP).
TTK Prestige, Gandhi Mathi Appliances (Butterfly Gandhimathi), and Stove Kraft may also come into focus amid concerns over LPG supply disruptions linked to the Middle East conflict. Reports indicate that shortages of commercial LPG in several major cities have pushed hotels and restaurants to explore alternatives such as induction and electric cooking appliances. If the supply issues persist, consumers and businesses may temporarily shift to induction cookers, hot plates and other electric devices, which could support demand and sales for companies in the kitchen appliances segment.
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