India’s oil shield: How strong is it really?
India has so far kept the petrol pumps running despite the turmoil around the Strait of Hormuz, but the claim of 80 days of fuel security masks a thinner strategic cushion
Seven months after the US-Israel war on Iran began, the Strait of Hormuz remains a battlefield, not a shipping lane. Brent crude rose to about $107 on Monday after President Donald Trump rejected an Iranian proposal, nearly 50 per cent above its pre-war price. The June 17 memorandum to reopen the strait collapsed, and Houthi strikes on Saudi energy sites have widened the war. In Kolkata that same day, Petroleum Minister Hardeep Puri said India holds over 80 days of fuel and has “insulated” itself from the turbulence. How true is that optimism? Partly.
On supply, the record is creditable: pumps have not run dry, refiners now buy from 41 countries against 27 earlier, Russia has cushioned the loss of Gulf barrels, and Gulf supplies have recovered to roughly three million barrels a day. The 80-day figure, however, flatters. India’s strategic caverns at Visakhapatnam, Mangaluru and Padur hold 5.33 million tonnes at full capacity, about 9.5 days of crude, and were only 64 per cent full in March. The rest is refinery and commercial inventory, working stock rather than emergency reserve. Japan holds around 254 days; China 110 to 140. IEA members must keep 90. India’s Phase-II expansion at Chandikhol and Padur, approved in 2021, is still stuck in land acquisition and tendering. Puri conceded last Thursday: “I cannot say that if the crisis exacerbates, we can still continue.” That is more honest than the headline number. Nor has the insulation come free. The Indian crude basket touched $117 a barrel on September 21, against a 2025-26 average of about $66, while retail petrol and diesel prices have not moved since the May 25 hike. Oil marketing companies are losing roughly `530 crore a day. The April-July crude import bill jumped 57 per cent to $63.4 billion, and Motilal Oswal warns the current account deficit could reach 1.7 per cent of GDP if crude stays above $90. LPG, which Puri himself calls his most critical concern, remains exposed, and Washington’s pressure on buyers of Russian oil threatens the largest single supplier.
What is the way out? Four steps. First, diplomacy. As BRICS chair and a friend to Tehran, Washington and the Gulf alike, India should press for the phased deal negotiators are reportedly exploring, with Hormuz reopened in exchange for the US easing its blockade. Second, stocks. Fill every cavern now, fast-track Chandikhol and Padur, and build LPG and gas storage so 90 days means emergency cover, not accounting. Third, sourcing. Convert spot dependence into long-term contracts with Atlantic-basin suppliers, so Russian crude stays a choice, not a necessity. Fourth, demand. Ethanol, CNG, electric mobility and public transport are the cheapest barrels India will ever find, and prices must reflect costs through staggered pass-through with targeted relief, not an open-ended freeze.
Puri says every crisis is an opportunity. It is one only for governments that use it. Eighty days buys time; what India does with that time is the strategic question.
