New Delhi, March 3: India is in a reasonably comfortable position regarding crude oil, LPG, and LNG, with a reserve of 25 days for crude and 25 days for products, including those in transit on ships heading to the country's ports, according to government sources.
India imports over 85% of its crude oil requirement, with approximately 50% of that supply coming from Middle Eastern countries via the Strait of Hormuz, whose flow has been disrupted due to the Iran war.
However, India has diversified its oil sources by increasing imports from Africa, Russia, and the US, and has built resilience through strategic reserves.
An official stated that the country's oil marketing companies (Indian Oil, Bharat Petroleum, and Hindustan Petroleum) have supplies for several weeks and continue to receive energy supplies through various routes.
Furthermore, the government has directed the oil marketing companies not to export petroleum products to further enhance the buffer stock.
India has strengthened its energy security by diversifying its oil imports to countries outside the Gulf in recent years, and a large volume of supplies no longer comes through the Strait of Hormuz, a senior official said.
India has oil storage capacity at Pudur of 2.25 million metric tonnes (MMT), the Visakhapatnam facility has the capacity to store 1.33 MMT of crude oil, while Mangaluru has a storage capacity of 1.5 MMT. Additionally, another strategic reserve facility is being built at Chandikhol, which is also located on the coast.
The country can rely on these strategic oil reserves during emergencies. These reserves can also be tapped into when global prices surge to provide a cushion for national oil companies.
However, the immediate impact will be on prices. Brent, the global benchmark, crossed $80 per barrel, roughly 10% higher since the Iran crisis. The increase in oil prices leads to an increase in India's oil import bill and pushes up the rate of inflation, which hurts economic growth.
The country spent $137 billion on crude oil imports in the financial year ending March 31, 2025. During April 2025 to January 2026 (the first ten months of the current financial year), $100.4 billion was spent on importing 206.3 million tonnes of crude oil.