India holds nearly 100 million barrels of commercial crude oil inventories — stored in refinery tanks, underground strategic petroleum reserves and cargoes currently en route to the country — which could meet about 40–45 days of demand if supplies through the Strait of Hormuz are disrupted, according to energy intelligence firm Kpler.
India imports around 88 per cent of its crude oil requirement, the primary feedstock for fuels, such as petrol and diesel. More than half of these imports come from Middle Eastern producers and pass through the strategically vital Strait of Hormuz. The narrow shipping lane has faced disruptions amid escalating tensions linked to the Iran crisis.
Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler, said a complete but temporary halt in Middle Eastern crude supplies would initially create logistical bottlenecks and drive up prices. Risks would intensify if shipping through the Strait remains blocked for an extended period.
A closure would first affect prompt cargo loadings, he explained. However, refiners typically maintain commercial inventories and vessels already on the water would continue discharging, providing short-term relief. In the event of a prolonged disruption, medium-term pressures would emerge in the form of higher crude procurement costs, increased freight exposure, and the need to source barrels from more distant suppliers.
India maintains strategic petroleum reserves (SPR) alongside commercial stocks held by refiners and oil marketing companies. These reserves are designed to cushion temporary supply shocks rather than prolonged outages. Based on Kpler’s inventory data, commercial crude stocks total roughly 100 million barrels, including volumes stored at SPR facilities in Mangalore, Padur and Visakhapatnam.
With imports through the Strait of Hormuz averaging about 2.5 million barrels per day—nearly half of India’s total crude imports of just over 5 million bpd—these reserves could theoretically cover 40–45 days in a disruption scenario. Additional inventories of refined petroleum products would further extend the effective coverage.
The more immediate impact, however, would be on prices. Global benchmark Brent crude has climbed above USD 80 per barrel, roughly 10 per cent higher since tensions involving Iran escalated. For India, rising crude prices directly translate into a higher import bill.
India spent USD 137 billion on crude oil imports in the fiscal year ending March 31, 2025. Between April 2025 and January 2026—the first ten months of the current fiscal—crude imports of 206.3 million tonnes cost USD 100.4 billion.
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Over the weekend, the United States and Israel carried out military strikes on targets in Iran. Tehran responded with missiles and drones aimed at Israel and countries hosting US forces, including the United Arab Emirates, Qatar, Kuwait, Bahrain, Iraq, Jordan and Saudi Arabia.
Reports indicate that the conflict has effectively shut the Strait of Hormuz, a critical artery for global energy trade. Around one-third of the world’s seaborne crude oil exports and about 20 per cent of liquefied natural gas shipments move through the narrow channel.
India, the world’s third-largest crude importer, sources nearly half of its oil through the Strait. Qatar—India’s principal liquefied natural gas supplier—also relies on the same route to transport LNG cargoes.
If the Strait remains closed, India could turn to alternative suppliers in West Africa, Latin America and the United States to offset reduced Middle Eastern flows. Russian crude could also help bridge the gap.
India had previously agreed to scale back purchases of Russian oil under a trade understanding with the US, but that arrangement is now uncertain after the US Supreme Court struck down country-based tariffs imposed by US President Donald Trump.
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