Energy Crisis and Strategic Petroleum Reserve

Energy Crisis and Strategic Petroleum Reserve

Recent geopolitical tensions and disruptions in key oil transit routes have exposed the structural vulnerability of India’s energy security framework. India imports more than 80% of its crude oil requirement, making it highly susceptible to global supply shocks, price volatility, and strategic coercion. Any disruption in regions such as West Asia or chokepoints like the Strait of Hormuz can immediately affect domestic availability and pricing, with cascading effects on inflation, fiscal stability, and industrial output.

India has established Strategic Petroleum Reserves (SPR) at locations such as Visakhapatnam, Mangaluru, and Padur, with a total capacity of about 5.33 million metric tonnes (MMT), which corresponds to roughly 9–10 days of crude oil consumption. When combined with commercial stocks held by oil companies, the total buffer extends to about 60–65 days, still significantly lower than the 90-day reserve norm followed by many developed economies under IEA standards.

The energy crisis highlights two critical issues:

First, inadequate reserve capacity, which limits India’s ability to withstand prolonged disruptions.
Second, high import concentration, particularly from geopolitically volatile regions, increasing exposure to external risks.