India Has Ample Crude Oil, Petro Product Stocks Amidst Iran Crisis
India maintains a comfortable 25-day reserve of crude oil and petroleum products, including in-transit stock, to mitigate the impact of the Iran crisis. The nation has significantly diversified its oil import sources, reducing reliance on the Strait of Hormuz, and built strategic reserves. While well-prepared with existing supplies and storage, the global crisis has pushed Brent crude prices above $80, leading to increased import bills and inflationary pressure, which could impact economic growth.
India is reportedly in a strong position regarding its crude oil, LPG, and LNG supplies, holding approximately 25 days of reserves for crude and petroleum products, which includes quantities in transit. This preparedness comes amidst disruptions caused by the Iran crisis, which has affected flows through the Strait of Hormuz, a critical route for about 50% of India's Middle Eastern oil imports. To enhance its energy security, India has strategically diversified its oil procurement, increasing imports from countries like Africa, Russia, and the US, thereby lessening its dependence on traditional Gulf suppliers.The country's oil marketing companies, including Indian Oil, Bharat Petroleum, and Hindustan Petroleum, possess several weeks of supply and continue to receive energy through multiple routes. The government has also instructed these companies to halt petroleum product exports to further boost buffer stocks. India has invested in substantial strategic oil reserves at locations such as Pudur (2.25 MMT), Visakhapatnam (1.33 MMT), and Mangaluru (1.5 MMT), with another facility under construction at Chandikhol. These reserves are crucial for managing emergencies and providing a cushion against soaring global oil prices, which directly impact national oil companies.However, the immediate repercussion of the Iran crisis is evident in global oil markets, with Brent crude surpassing $80 per barrel, marking a 10% increase since the crisis began. This surge is expected to significantly escalate India's crude oil import bill, which was $137 billion in FY25 and $100.4 billion for the first ten months of FY26. Such increases in import costs typically fuel inflation and could hinder economic growth, posing a challenge despite India's robust stock position and diversification efforts.
