India Plans Larger Strategic Energy Reserves Following Hormuz Supply Concerns

India is preparing to strengthen its energy security framework by expanding strategic reserves of crude oil, LPG, and LNG after recent disruptions around the Strait of Hormuz highlighted the country's dependence on imported energy supplies.

According to media reports, the Ministry of Petroleum and Natural Gas has established a committee to evaluate potential storage locations and operational models for future reserves. The long-term objective is to build emergency stockpiles capable of supporting domestic energy demand for up to one month during supply disruptions.

At present, India maintains strategic crude oil reserves of around 39 million barrels, providing coverage for roughly eight days of imports. However, strategic storage capacity for LPG and LNG remains relatively limited. To address this gap, the government is moving ahead with plans to expand underground crude oil storage facilities, with a long-term target of exceeding 120 million barrels of capacity.

In parallel, state-owned refiners have been encouraged to increase emergency LPG inventories, while LNG importers are investing in additional storage infrastructure. These measures form part of a broader strategy aimed at reducing vulnerability to supply shocks and improving the country's ability to manage future disruptions.

The initiative comes in the aftermath of supply challenges linked to tensions in the Persian Gulf region. The disruption of key shipping routes exposed risks to India's energy supply chain and prompted temporary measures to manage fuel availability. Policymakers now appear focused on building larger strategic reserves to enhance resilience against similar events in the future.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211