A virtualized computer system employs a virtual disk. Multiple snapshots of the virtual disk can be created. After a snapshot is created, writes to the virtual disk are captured in delta disks. Two snapshots are consolidated by updating block references in snapshot meta data. Block reference update takes advantage of the fact that blocks for the two snapshot are managed within the same storage container and, therefore, can be moved in the snapshot logical space without incurring data copy operations. Consolidation of delta disks also gracefully handles failures during the consolidation operation and can be restarted anew after the system has recovered from failure.