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India's 25-Day Oil Buffer Shields Economy from Iran Crisis Price Surge

India maintains a comfortable 25-day stockpile of crude oil and petroleum products despite supply disruptions from the Middle East following the Iran war. The country has proactively diversified its import sources to include Africa, Russia, and the United States, reducing reliance on the Strait of Hormuz. Strategic petroleum reserves at locations like Pudur, Visakhapatnam, and Mangaluru provide an emergency buffer and price cushion. However, the crisis has pushed Brent crude above $80 per barrel, threatening to increase India's massive oil import bill and fuel inflation.

Key Points: India's 25-Day Oil Stockpile Amid Iran Crisis

  • 25-day strategic oil & product buffer
  • Diversified imports from Africa, Russia, US
  • Strait of Hormuz supply disruption
  • Brent crude crosses $80 per barrel
  • Strategic reserves at Pudur, Visakhapatnam, Mangaluru
2 min read

India has ample stocks of crude oil, petro products to tide over Iran crisis

India holds 25 days of crude and product reserves, diversifying imports from Africa, Russia, and US to counter Iran war disruption and price surge.

"India is in a reasonably comfortable position... with a stock of 25 days of reserve for crude and 25 days of products - Government Sources"

New Delhi, March 3

India is in a reasonably comfortable position as far as crude oil, LPG and LNG are concerned, with a stock of 25 days of reserve for crude and 25 days of products, including the quantity that is in transit on ships headed for the country's ports, according to government sources.

India imports over 85 per cent of its crude oil requirement, of which around 50 per cent is supplied by Middle Eastern countries through the Strait of Hormuz, flows from which has been disrupted following the Iran war.

However, India has diversified its oil sources by increasing imports from Africa, Russia, and the US and building resilience through strategic reserves.

An official said 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 from several routes.

In addition, the government has directed the oil marketing companies not to export petroleum products so that the buffer stock is further enhanced.

India has strengthened its energy security by diversifying its oil imports to countries outside the Gulf in the past few years, and a large volume of supplies does not come through the Strait of Hormuz now, a senior official said.

India has oil storage capacity at Pudur of 2.25 million metric tonnes (MMT), the Visakhaptnam facility has the capacity to store 1.33 MMT of crude oil, while Mangaluru has a storage capacity of 1.5 MMT. Besides, another strategic reserve facility is being built at Chandikhol, which is also on the sea coast.

The country can fall back on these strategic oil reserves in times of emergency. These reserves can also be dipped into at times when global prices skyrocket to provide a cushion to the national oil companies.

However, the immediate impact will be on prices. Brent, the global benchmark, crossed $80 per barrel, roughly 10 per cent more since the Iran crisis. The surge 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 ended March 31, 2025. During April 2025 to January 2026 - first ten months of the current financial year, as much as $100.4 billion was spent on the import of 206.3 million tonnes of crude oil.

- IANS

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Reader Comments

P
Priya S
Good planning, but what about the common man's pocket? Brent is already above $80. Strategic reserves are for emergencies, but daily price hikes are the real emergency for my household budget. The cushion for oil companies is fine, but we need a cushion for consumers too.
R
Rohit P
Importing from Russia and the US shows we are not putting all our eggs in one basket. That's the key to energy security. The Chandikhol facility will be a major addition. However, the article mentions inflation hurting growth - that's the part that worries me more than the physical stock.
S
Sarah B
As someone who follows global markets, India's move to build strategic reserves is very prudent. Many developed nations have similar policies. The directive to halt exports of petroleum products is a sensible short-term measure to build domestic buffer stock.
V
Vikram M
$100 billion spent in just 10 months on oil imports! That's a staggering number. While the strategic stockpile is good, this crisis should accelerate our push for renewables and electric vehicles. We cannot be this vulnerable to global geopolitics forever. Jai Hind!
K
Kavya N
My father is a truck driver. For him, even a ₹2 increase in diesel price is a big blow. I hope the government uses these reserves wisely to stabilize prices and not just protect company profits. The real test is whether the common citizen feels any security.

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