US-Iran war impact: How can India shock-proof itself against future oil, LPG, LNG supply disruptions?

Experts be aware that whereas the home buffers for oil are comparatively robust, LPG and LNG provides want a lift. (AI picture)

India imports round 90% of its crude oil wants, and roughly 60% and 50% of its LPG and LNG necessities respectively. These usually are not simply mere statistics – it’s a telling image of the vitality wants and safety wants of one of many world’s largest economies. This dependence has been put to check amidst the continuing US-Iran war that has choked vitality supply from one of the necessary maritime routes – the Strait of Hormuz. The Middle East disaster has dropped at fore with readability an necessary reality – whereas India says it’s comfortably positioned on its oil, LPG, and LNG provides – there’s have to step up tempo on long-term plans to make sure India’s vitality safety can cater to longer disruptions as effectively. India has constructed strategic petroleum reserves over the previous few years and is best positioned than earlier than on its vitality safety, however the globally prescribed customary for reserves is 90 days, and India is beneath that.“West Asia remains a critical supplier for India’s energy needs. In 2025, about 48.7% of India’s crude oil imports, 68.4% of its LNG imports and more than 91% of its LPG imports came from the region. This high concentration exposes the Indian economy to sudden supply shocks,” notes Global Trade Research Initiative (GTRI) in its newest report.

What’s the present standing of India’s vitality safety?

Experts be aware that whereas the home buffers for oil are comparatively robust, LPG and LNG provides want a lift. According to the federal government, India has 25 days of crude oil, its petrol and diesel can final one other 25 days other than the strategic oil reserves it maintains. Cooking fuel shares can final round 25-30 days, and liquefied pure fuel shares of round 10 days can be found.India has the capability to carry 5.33 million tonnes of crude in underground caverns at Visakhapatnam, Mangaluru and Padur – roughly 40 million barrels, or about 9–10 days of nationwide demand. At current, round 80% of that is full. India has additionally stepped up purchases of Russian crude oil to tide over the fast supply deficit.Sourav Mitra, Partner – Oil & Gas, Grant Thornton Bharat believes that India has quietly constructed depth into its vitality safety. Price volatility could also be unavoidable – however the period of sudden bodily shortages is steadily receding.

During the present bout of regional uncertainty, cargo-tracking information counsel that just about 100 million barrels of economic crude, together with shipments already en route, are readily accessible – sufficient to cushion imports for one more 40–45 days if Hormuz flows are disrupted. The fast risk, briefly, is just not shortage however value, says Mitra.LPG provides are additionally on firmer footing. India now has two underground storage ‘anchors’ on reverse coasts – at Visakhapatnam and Mangaluru – offering about 140,000 tonnes of deep storage. According to Mitra, pure fuel stays the weak spot. “While India has eight LNG import terminals, it lacks a formal gas strategic reserve. Policymakers are now considering a practical workaround: earmarking a small, government-callable buffer within existing LNG tanks to manage supply or price shocks,” he says.

Which new strategic reserves initiatives are within the pipeline?

Oil (Strategic Petroleum Phase-II): As of the newest Parliamentary evaluation, land at Chandikhol and Padur-II was but to be handed over by state governments, whilst FY26 funding strains have been opened, so commissioning seems to be staggered later within the decade quite than fast. When operational, India’s strategic petroleum reserves (SPR) capability rises from 5.33 MMT to 11.83 MMT, taking SPR-only cowl from round 9–10 days in the direction of 20 days, relying on demand, says Sourav Mitra of Grant Thornton Bharat.LPG: The HPCL Mangalore cavern was commissioned in September 2025. This has lifted underground LPG capability to roughly 140,000 MT (Mangalore round 80,000 MT + Visakhapatnam 60,000 MT). In apply, nationwide ‘days of cover’ for LPG rely upon above-ground tanks and import cadence, however the two caverns now present east–west strategic anchors. LNG: The 10% terminal-level strategic buffer is at draft stage; as soon as notified, operators would part in extra tankage or designate buffer volumes with authorities call-off protocols and cost-recovery. The current chain of power majeure notices (QatarEnergy) has sharpened the case for fast notification, as a quick, low-capex manner so as to add a nationwide LNG backstop.

Insulating against future shocks: What ought to India do?

Experts stress the necessity for a multi-pronged technique to take care of any future supply shocks. Apart from diversified procurement sources, home reserves should be shored as much as forestall each short-term and long-term supply shocks.Gaurav Moda of EY-Parthenon India says that the subsequent part of strategic petroleum reserves ought to be prioritised. “India can benefit further from acceleration of strategic expansion for Phase II that shall raise the strategic petroleum reserves to 11.83 MMT (which is an additional 17 – 18 days buffer); a separate feasibility study for six new strategic petroleum reserve locations is also underway for the next set,” he says.

Sourav Mitra of Grant Thornton Bharat advocates a mild however necessary shift – from an LNG ‘strategy’ to an LNG ‘architecture’. The current Qatar–Hormuz shock reminded us that contracts and terminals are crucial, however actual resilience comes from proudly owning, transferring and buying and selling molecules as effectively, he says, advocating the next:

GTRI founder Ajay Srivastava is of the view that India ought to enter into long-term crude oil supply contracts with Russia. “Had India continued importing Russian oil at earlier levels – when it made up 35% of our crude imports – today’s energy concerns would likely be far less severe. India’s alternative supply options remain limited,” he says. Although imports from the United States rose 82% to $9.8 billion in 2025, the US itself runs a internet crude deficit and has restricted spare export capability. “West African and Latin American crude supplies involve higher freight costs and longer shipping times. Long-term contracts with Russia would provide India with stable volumes, predictable pricing and a stronger buffer against global market volatility,” he says.Gaurav Moda recommends that for LNG, India could profit from institutionalizing proposals to construct 10% extra LNG storage capability mandate for terminals and moreover facilitate financing for 3-4 bcm underground fuel storage reserves that might be led by a mix of GAIL, ONGC and OIL. On the LPG entrance, India could profit from coverage initiatives to develop underground LPG strategic reserves, with a particular concentrate on North and North-East, he says.“Countries like Japan and China have taken a larger view on such buffers to typically average 6 months plus in comparison,” he tells TOI.“In the long term, India may further strengthen and diversify its growth agenda through energy security via a three‑pronged strategic reserves framework similar to Japan, with a combination of national reserves, private storage mandates and joint stockpiling abroad at source,” he concludes.