US-Iran war: How can India shock-proof itself against future oil, LPG, LNG crisis

India imports astir 90% of its crude lipid needs, and astir 60% and 50% of its LPG and LNG requirements respectively. These are not conscionable specified statistic - it’s a telling representation of the vigor needs and information needs of 1 of the world’s largest economies.

This dependence has been enactment to trial amidst the ongoing US-Iran warfare that has choked vigor proviso from 1 of the astir important maritime routes - the Strait of Hormuz. The Middle East situation has brought to fore with clarity an important information - portion India says it is comfortably placed connected its oil, LPG, and LNG supplies - determination is request to measurement up gait connected semipermanent plans to guarantee India’s vigor information tin cater to longer disruptions arsenic well.

India has built strategical petroleum reserves implicit the past fewer years and is amended placed than earlier connected its vigor security, but the globally prescribed modular for reserves is 90 days, and India is beneath that.“West Asia remains a captious supplier for India’s vigor needs. In 2025, astir 48.7% of India’s crude lipid imports, 68.4% of its LNG imports and much than 91% of its LPG imports came from the region. This precocious attraction exposes the Indian system to abrupt proviso shocks,” notes Global Trade Research Initiative (GTRI) successful its latest report.

What’s the existent presumption of India’s vigor security?

Experts enactment that portion the home buffers for lipid are comparatively strong, LPG and LNG supplies request a boost. According to the government, India has 25 days of crude oil, its petrol and diesel tin past different 25 days isolated from the strategical lipid reserves it maintains. Cooking state stocks tin past astir 25-30 days, and liquefied earthy state stocks of astir 10 days are available.India has the capableness to clasp 5.33 cardinal tonnes of crude successful underground caverns astatine Visakhapatnam, Mangaluru and Padur - astir 40 cardinal barrels, oregon astir 9–10 days of nationalist demand.

At present, astir 80% of this is full. India has besides stepped up purchases of Russian crude lipid to tide implicit the contiguous proviso deficit.Sourav Mitra, Partner – Oil & Gas, Grant Thornton Bharat believes that India has softly built extent into its vigor security. Price volatility whitethorn beryllium unavoidable - but the epoch of abrupt carnal shortages is steadily receding.

During the existent bout of determination uncertainty, cargo-tracking information suggest that astir 100 cardinal barrels of commercialized crude, including shipments already en route, are readily accessible - capable to cushion imports for different 40–45 days if Hormuz flows are disrupted.

The contiguous threat, successful short, is not scarcity but cost, says Mitra.LPG supplies are besides connected firmer footing. India present has 2 underground retention ‘anchors’ connected other coasts - astatine Visakhapatnam and Mangaluru - providing astir 140,000 tonnes of heavy storage. According to Mitra, earthy state remains the anemic spot. “While India has 8 LNG import terminals, it lacks a ceremonial state strategical reserve. Policymakers are present considering a applicable workaround: earmarking a small, government-callable buffer wrong existing LNG tanks to negociate proviso oregon terms shocks,” helium says.

Which caller strategical reserves projects are successful the pipeline?

Oil (Strategic Petroleum Phase-II): As of the latest Parliamentary review, onshore astatine Chandikhol and Padur-II was yet to beryllium handed implicit by authorities governments, adjacent arsenic FY26 backing lines person been opened, truthful commissioning looks staggered aboriginal successful the decennary alternatively than immediate. When operational, India’s strategical petroleum reserves (SPR) capableness rises from 5.33 MMT to 11.83 MMT, taking SPR-only screen from astir 9–10 days towards 20 days, depending connected demand, says Sourav Mitra of Grant Thornton Bharat.LPG: The HPCL Mangalore cavern was commissioned successful September 2025. This has lifted underground LPG capableness to astir 140,000 MT (Mangalore astir 80,000 MT + Visakhapatnam 60,000 MT). In practice, nationalist ‘days of cover’ for LPG beryllium connected above-ground tanks and import cadence, but the 2 caverns present supply east–west strategical anchors. LNG: The 10% terminal-level strategical buffer is astatine draught stage; erstwhile notified, operators would signifier successful further tankage oregon designate buffer volumes with authorities call-off protocols and cost-recovery.

The caller concatenation of unit majeure notices (QatarEnergy) has sharpened the lawsuit for speedy notification, arsenic a fast, low-capex mode to adhd a nationalist LNG backstop.

Insulating against aboriginal shocks: What should India do?

Experts accent the request for a multi-pronged strategy to woody with immoderate aboriginal proviso shocks. Apart from diversified procurement sources, home reserves request to beryllium shored up to forestall some short-term and semipermanent proviso shocks.Gaurav Moda of EY-Parthenon India says that the adjacent signifier of strategical petroleum reserves should beryllium prioritised.

“India tin payment further from acceleration of strategical enlargement for Phase II that shall rise the strategical petroleum reserves to 11.83 MMT (which is an further 17 - 18 days buffer); a abstracted feasibility survey for six caller strategical petroleum reserve locations is besides underway for the adjacent set,” helium says.

Sourav Mitra of Grant Thornton Bharat advocates a gentle but important displacement - from an LNG ‘strategy’ to an LNG ‘architecture’. The caller Qatar–Hormuz daze reminded america that contracts and terminals are necessary, but existent resilience comes from owning, moving and trading molecules arsenic well, helium says, advocating the following:

GTRI laminitis Ajay Srivastava is of the presumption that India should participate into semipermanent crude lipid proviso contracts with Russia.

“Had India continued importing Russian lipid astatine earlier levels - erstwhile it made up 35% of our crude imports - today’s vigor concerns would apt beryllium acold little severe. India’s alternate proviso options stay limited,” helium says. Although imports from the United States roseate 82% to $9.8 cardinal successful 2025, the US itself runs a nett crude shortage and has constricted spare export capacity. “West African and Latin American crude supplies impact higher freight costs and longer shipping times.

Long-term contracts with Russia would supply India with unchangeable volumes, predictable pricing and a stronger buffer against planetary marketplace volatility,” helium says.Gaurav Moda recommends that for LNG, India whitethorn payment from institutionalizing proposals to physique 10% further LNG retention capableness mandate for terminals and additionally facilitate financing for 3-4 bcm underground state retention reserves that could beryllium led by a operation of GAIL, ONGC and OIL. On the LPG front, India whitethorn payment from argumentation initiatives to make underground LPG strategical reserves, with a peculiar absorption connected North and North-East, helium says.“Countries similar Japan and China person taken a larger presumption connected specified buffers to typically mean 6 months positive successful comparison,” helium tells TOI.“In the agelong term, India whitethorn further fortify and diversify its maturation docket done vigor information via a three‑pronged strategical reserves model akin to Japan, with a operation of nationalist reserves, backstage retention mandates and associated stockpiling overseas astatine source,” helium concludes.