Part IV of VI | India’s Energy Security Series
Energy security is not tested when supplies are stable. It is tested when the world becomes unstable.
Mumbai: When crude oil prices remain manageable and fuel stations continue operating normally, strategic reserves rarely become part of public conversation. They exist quietly in the background, largely invisible to ordinary citizens. But during geopolitical crises, wars, supply disruptions or shipping blockades, these reserves suddenly become one of the most important instruments of national resilience. This is where India faces an uncomfortable reality.
Despite being one of the world’s largest energy consumers and among the most import-dependent major economies, India’s strategic petroleum reserve system remains relatively limited when compared to the scale of its vulnerability. The issue is not whether India has reserves. It does. The real question is whether those reserves are sufficient for a country whose economic growth, transport systems, manufacturing activity and urban consumption depend heavily on imported fuel. That distinction matters.
India has 5.33 million metric tonnes of strategic petroleum reserve capacity in underground facilities at Visakhapatnam, Mangaluru and Padur. A second phase envisages another 6.5 MMT at Padur and Chandikhol; work for Padur-II has been awarded, while the Chandikhol project remains at an earlier stage of implementation. These reserves are intended to provide an emergency cushion during major disruptions in global oil markets. In principle, this is sound policy. The problem is scale.
India consumes millions of barrels of crude oil every day. The existing 5.33 MMT of strategic storage capacity is equivalent to roughly 9.5 days of the country’s crude-oil requirement, based on the 2019–20 consumption pattern. When storage capacity available with oil marketing companies is included, India’s total national capacity for crude oil and petroleum products is about 74 days. But storage capacity should not be confused with the volume of oil actually held at any given time, which can vary. For an economy so heavily dependent on imported crude, the limited strategic cushion therefore remains an important vulnerability during a prolonged global supply disruption. This vulnerability becomes more serious when geography is considered.
The Strait of Hormuz remains a critical vulnerability in India’s energy supply chain. Before the 2026 West Asia crisis, approximately 45 per cent of India’s crude imports transited the Hormuz route. As the conflict disrupted shipping, India increased non-Hormuz sourcing to about 70 per cent of crude imports — demonstrating both the country’s ability to diversify supplies and the scale of its exposure to a single maritime chokepoint. Military escalation involving Iran, Gulf states or external powers can quickly raise risks for global energy supply chains. Oil markets respond not only to physical disruption, but also to the possibility of disruption.
Shipping costs rise. Insurance premiums increase. Currency pressure intensifies. Import bills expand. And for countries heavily dependent on external energy, economic stress can emerge rapidly even before physical shortages appear. India has managed these shocks reasonably well so far through diversified sourcing, diplomatic balancing, and flexible purchasing strategies. The ability to buy discounted Russian crude after the Ukraine conflict demonstrated significant strategic adaptability. But adaptability is not the same as insulation.
India remains vulnerable because the core structure of its energy system continues to rely heavily on imported hydrocarbons. This is why strategic reserves cannot be viewed merely as storage infrastructure. They are part of national security architecture. Countries build military reserves because wars are unpredictable. Energy reserves serve a similar logic. They provide time — time for diplomacy, time for supply adjustments, time for markets to stabilise.
Without that cushion, economic pressure can escalate very quickly during international crises. Yet reserves alone are not enough. India’s challenge is broader than crude storage capacity. The country’s exposure extends into LNG imports, LPG dependence, shipping routes, refining logistics, and currency sensitivity linked to global energy prices. This means energy resilience must operate at multiple levels simultaneously.
The first requirement is expansion of strategic reserves themselves. India will likely need significantly larger reserve capacity over the coming decades as energy demand continues to rise.
Second, reserve management must become more dynamic. Several countries actively rotate reserves, utilise international storage partnerships, and integrate commercial strategies with emergency planning. India may eventually need a more flexible reserve doctrine rather than a purely static storage approach.
Third, diversification remains critical. Dependence concentrated in any one geography creates strategic risk. India’s approach of sourcing crude from multiple regions has reduced some vulnerability, but future resilience will depend on maintaining that flexibility under changing geopolitical conditions.
Fourth, gas security requires greater attention. Public debate often focuses mainly on crude oil, but natural gas dependence is also rising steadily. LNG infrastructure expansion without parallel long-term storage and supply planning can create future vulnerabilities similar to oil dependence.
Fifth, domestic alternatives must accelerate not only for climate reasons, but for strategic reasons. Renewable energy, nuclear expansion, electric mobility, biofuels, and green hydrogen are often discussed within environmental frameworks. Increasingly, however, they must also be viewed through the lens of national security and import reduction. Because every additional unit of domestically produced energy can reduce dependence on imported fuels. This is where India’s energy debate must evolve.
For too long, energy discussions have been divided into separate compartments — oil pricing, renewables, climate targets, electric vehicles, gas policy, or subsidies. But global instability is forcing countries to think differently. Energy security is no longer only about economics. It is now directly linked to geopolitical resilience.
India’s future growth trajectory will require enormous amounts of energy. Artificial intelligence infrastructure, data centres, industrial manufacturing, transport expansion and urbanisation will all intensify demand further. If this growth remains overwhelmingly dependent on external energy systems, vulnerability will deepen alongside economic expansion. That is the paradox India now confronts.
Strategic reserves can reduce risk. They cannot eliminate dependence. But in an unstable world, even reducing vulnerability becomes a strategic advantage and that may ultimately become one of the defining challenges of India’s rise.
Next in the Series
Part V: The Road to Energy Sovereignty — Can India Build a More Resilient Future?
Author Signature
Vivek Bhavsar is Editor-in-Chief of TheNews21. He writes on power, policy and the structural risks shaping India’s economic and strategic future.
