In response to the Israel–Iran war and Strait of Hormuz blockage that has led to rising oil prices, the supply of crude oil has been impacted for both India and the world. But India seems fairly well placed and has enough buffer stocks for 7-8 weeks.
Current Crude oil Storage and Supply Situation (March 2026)
In response to the Israel–Iran war and Strait of Hormuz blockage that has led to rising oil prices, the supply of crude oil has been impacted for both India and the world. But India seems fairly well placed and has enough buffer stocks for 7-8 weeks. India has more than 250 million barrels of crude oil and finished oil products like petrol, diesel, LNG, LPG, etc., as per the government data. This amounts to about 4,000 crore litres of fuel reserves. These reserves are not kept in one particular physical form or a single location. They are kept in above ground storage tanks, strategic caverns underground, pipeline Infrastructure, terminal storage facilities, and now even offshore storage vessels, employing a mix of methods no doubt to aid supply security and logistically flexibility.
• Strategic Storage Locations: Key Strategic Petroleum Reserves (SPRs) are located at Visakhapatnam, Mangalore, and Padur.
• Supply Security and Diversification: To reduce supply risks, India has increased crude oil imports from Russia, the United States, and African countries, lowering its dependence on the Persian Gulf region. However, around 40% of India’s oil imports still pass through the Strait of Hormuz, which is currently facing disruptions.
• Contingency Measures: The United States has granted India a 30-day waiver to continue importing Russian crude oil, enabling India to secure and purchase shipments that are currently stranded at sea due to logistical and geopolitical challenges.
Source: ChemAnalyst
The chart indicates a rapid climb in crude oil prices in the beginning of March, which increased by about 10% over that of the last week. The rise was led by mounting geopolitical tensions in the Middle East, especially the war with Iran, which raised fears that oil supply to the world might be disrupted.
The disruption was compounded by disruptions to shipping in the Strait of Hormuz, a key pathway for moving oil around the world. Tanker movements yet to be determined, rising freight and insurance costs, the possibility of short supply created bullish sentiment in crude oil.
Hence, global crude benchmarks rallied and it had a direct impact on Indian crude oil prices, as the country is heavily reliant on crude oil imports. Market players were quick to respond to supply risks, pushing prices up in the week.
Energy to Industry Impact Chain – Middle East Conflict 2026
Current LPG Storage and Supply Situation (March 2026)
Amid disruptions in the Middle East after the outbreak of a new strife, India has begun taking emergency steps to ensure its supplies of LPG, with the key shipping lanes such as the Strait of Hormuz coming under restriction. The government has directed the state-run refiners — IOC, BPCL and HPCL — to enhance LPG production and curtailed use of propane and butane in petrochemicals to guarantee availability of cooking fuel to millions of domestic users. Refineries can out their entire production of LPG by ensuring that no propane or butane streams are diverted into petrochemical feedstock or any other downstream product.
• Storage Constraints: India’s strategic reserves for LPG are not as large as that for crude oil. Existing onshore stockpiles and shipments that have already passed through the Strait of Hormuz are believed to meet domestic consumption only for two to three weeks (21–22 days).
• Import Reliance: 80-90% of India’s imports of LPG are from the Middle East - Qatar, UAE, Saudi Arabia, and Kuwait - which adds to the volatility of the supply chain.
• Increasing Production: It has been measuring such as asking producers to “carry out all possible production” under the PMO that refer to the Petroleum Products (Production Control) order, 1999, while applying the ECA, 1955.
• Managing Demand: Officials have limited commercial supply of LPG and are keeping a close eye on household consumption to prevent panic buying that could lead to shortages.
Strategies for Diversification and Contingency Planning
• Imports from the United States: In line with a 2026 pact, India is to import 2.2 million tonnes of LPG from the US Gulf Coast, meeting about 10 per cent of its annual demand and reducing dependence on supplies from the Middle East.
• Diversifying Places to Get Gas: India is also attempting to source more LPG from the Atlantic Basin, such as the US, Latin America and Russia. Although products from these areas usually need a transit time of 25-45 days.
• Infrastructure Development: India has established its largest underground LPG storage in Mangalore recently, which provides limited short- term storage back-up, but it falls short to compensate disruptions in long-term supplies.
Besides, over 40% of India's LNG imports is met from Qatar, and recently production in Qatari plants came to a halt and LNG tankers were stranded, making Indian firms pare gas supplies to the industry. In some areas, supply reductions have been as much as 40 percent.
To cope with the deficit, gas to industrial users has been rationed and spot LNG prices have soared to over $25 per million British thermal units (MMBtu).
As part of emergency measures, the government of India is mulling re-prioritising the gas supply, which could possibly mean giving a higher priority to critical application areas including fertilizer production and city gas distribution (CNG, piped natural gas/PNG).
Key Regions Affected by LNG Supply Disruptions
In the near term, energy markets are likely to face sharp fluctuations, driven by geopolitical developments, freight costs, and supply disruptions, keeping both global and Indian energy prices sensitive to unfolding events.
