India holds about 100 million barrels of commercial crude oil stocks — in storage tanks, underground strategic reserves and on ships voyaging towards the country — which could cover roughly 40-45 days of its requirement if flows through the Strait of Hormuz are disrupted, according to Kpler.
India imports about 88 per cent of the crude oil it needs — the raw material for fuels such as petrol and diesel — with more than 50 per cent supplied by Middle Eastern countries and transiting the narrow Strait of Hormuz, flows from which have been disrupted amid the Iran crisis.
If Middle Eastern crude supply were to halt completely for a temporary period, the immediate impact would be logistical and price-driven, with supply risks intensifying if movement through the Strait of Hormuz is disrupted for longer, said Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler.
A closure of Strait of Hormuz would at first impact prompt cargo liftings. “However, refiners typically maintain commercial inventories, and cargoes already on water would continue to arrive, providing some short-term cushioning to the system,” he said adding in the event of a prolonged disruption, medium-term pressures would build through higher import costs, freight exposure and the need to reroute supplies over longer distances.
“The country maintains strategic petroleum reserves alongside commercial inventories held by refiners and oil marketing companies. These buffers are intended to manage temporary supply shocks rather than sustained outages,” he said.
“Based on Kpler inventory data, commercial crude stocks are around 100 million barrels, including volumes in the strategic petroleum reserve (SPR) facilities at Mangalore, Padur and Visakhapatnam.”
With imports via the Strait of Hormuz averaging roughly 2.5 million barrels per day — about half of India’s just over 5 million bpd total crude imports — these combined reserves could theoretically cover around 40-45 days of imports in a crude disruption scenario, he said.
Additional refined product inventories would extend effective coverage further.
However, the immediate impact will be on prices. Brent, global benchmark, crossed $80 per barrel, roughly 10 per cent more since the Iran crisis. For India, higher prices means higher import bill.
India spent $137 billion on crude oil imports in fiscal year ended March 31, 2025. During April 2025 to January 2026 — first ten months of current fiscal — it spent $100.4 billion on import of 206.3 million tonnes of crude oil.
The United States and Israel launched military strikes on targets in Iran over the weekend. Tehran retaliated 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.
Media reports suggest the conflict has effectively closed the Strait of Hormuz, a key conduit for global energy flows. Roughly one-third of the world’s seaborne crude oil exports and about 20 per cent of liquefied natural gas shipments transit the narrow waterway.
India, the world’s third largest oil importer, imports roughly half of its crude needs through the narrow Strait. Its mainstay liquefied natural gas (LNG) supplier in Qatar also uses the strait to ship the fuel to India.
In case of closure, India can tap suppliers in West Africa, Latin Amercia and the US to make up for the shortfall from the Middle-East. India could also tap Russian oil to make up for the deficit.
India had agreed to wind down purchases of Russian oil as part of a trade deal with the US – a deal which now sits in limbo after the US Supreme Court struck down US President Donald Trump’s country-based tariffs.
“Russian cargoes currently floating in the Arabian Sea and wider Asian region without firm buyers could also be absorbed relatively quickly if required,” Ritolia said.
If the Strait of Hormuz — the narrow 33-kilometre passage connecting the Persian Gulf to the Arabian Sea — were disrupted or shipping were forced onto longer routes, India’s crude import bill would rise.
Even without a full blockade, higher freight, war-risk insurance and geopolitical premiums would lift landed costs.
“In a more severe scenario, policy intervention would likely become a key stabilising tool. The government could prioritise domestic energy security by asking refiners to moderate or temporarily curb refined product exports to ensure adequate domestic supply,” he said.
Given that India is among the world’s largest exporters of refined products, particularly diesel and jet, redirecting export volumes to the domestic market would provide an additional buffer.
India exported 23.7 million tonnes (474,000 bpd) of petroleum products or 10 per cent of the country’s fuel consumption, in 2024-25. During April-January, exports stood at 53.3 million tones.
“If the Hormuz situation were to deteriorate meaningfully, safeguarding domestic fuel availability and price stability would likely take precedence over export optimisation, reinforcing internal supply resilience even at the cost of lower export revenues,” he said.
The worst-case scenario would involve a prolonged and severe disruption to Hormuz flows combined with sustained geopolitical escalation. In that case, crude prices would spike sharply, freight markets would tighten, and refiners could eventually be forced to trim runs if replacement barrels are delayed.
“However, such a scenario would have major global economic consequences, making it a low-probability but high-impact risk,” he said adding the near-term risk is primarily price volatility and higher import costs rather than immediate physical shortage, for now.
India has diversification options and inventory buffers, but sustained disruption would materially increase the import bill and create macroeconomic pressures.
Published on March 3, 2026
