West Asia crisis: India holds 6–8 weeks of oil cover as Hormuz disruption tests energy flows

India has crude oil and petroleum product inventories sufficient to last six to eight weeks, placing the country in a “reasonably comfortable” position to prevent any immediate supply disruption amid the escalating conflict in West Asia, a senior official from the Ministry of Petroleum and Natural Gas (MoPNG) said.

The crisis — triggered after Israeli and US strikes on Iran and Tehran’s retaliatory attacks on neighboring territories hosting American military assets — has severely disrupted cargo movement through the strategically vital Strait of Hormuz. A significant share of India’s oil and gas imports transit through this narrow chokepoint.

Crude cushion intact, LNG buffer thinner

According to the official, Indian refiners currently hold crude stocks sufficient for about 25 days. Roughly half of this inventory is expected to be replenished continuously through supplies routed via non-Hormuz regions. These figures include oil stored in refinery tanks, pipelines and cargoes in transit.

In addition, India’s strategic petroleum reserves provide an estimated additional week’s cover, based on the country’s daily crude consumption of approximately 5.6 million barrels per day. Stocks of key fuels such as petrol, diesel and LPG are also adequate for nearly 25 days of domestic demand, with dynamic replenishment extending effective coverage.

However, the situation is more delicate in the case of liquefied natural gas (LNG). Unlike crude, LNG is significantly harder to stockpile in large quantities. India depends on LNG for nearly half of its natural gas consumption, and about half of these imports — primarily from Qatar and the UAE — pass through Hormuz.

Compounding concerns, Qatar — India’s largest LNG supplier — has reportedly paused production at select facilities following attacks, raising fears of tighter supplies if the halt extends beyond a brief period. Officials indicated that a disruption lasting a week to 10 days would likely be manageable, but prolonged outages may necessitate calibrated domestic supply adjustments.

Import dependence remains high

In recent months, approximately 2.5–2.7 million barrels per day of India’s crude imports — nearly half of total inbound shipments — have transited Hormuz, mainly from Iraq, Saudi Arabia, the UAE and Kuwait. India, the world’s third-largest crude consumer, meets over 88% of its oil demand through imports.

LPG exposure is even more concentrated. Over 80% of India’s LPG import volumes move through Hormuz, making it particularly sensitive to shipping disruptions. Cargo movement slowed sharply after Iran warned of potential attacks on vessels, prompting insurers and shipping firms to avoid the route.

Diversification strategy activated

The MoPNG said India has diversified its energy sourcing significantly in recent years to bolster resilience. A 24×7 control room has been set up to monitor supply and stock positions nationwide.

“Indian energy companies now have access to supplies not routed through the Strait of Hormuz. Such cargoes will help mitigate temporary disruptions,” the ministry said in a statement, adding that safeguarding consumer interests remains the highest priority.

Indian refiners are actively exploring additional spot purchases from alternative markets including Russia, the US, West Africa and Latin America. Russian crude cargoes in the Indian Ocean and Arabian Sea region — including volumes in floating storage — remain accessible options.

On the gas front, LNG importers are scouting short-term cargoes from non-Gulf suppliers. Companies are also sourcing additional LPG from new producers, including the United States, under recently signed term contracts. Domestic refineries retain the ability to raise LPG output if required.

Duration of crisis will determine impact

Government officials and industry experts agree that the ultimate fallout will hinge on how long energy flows through Hormuz remain constrained.

India appears well-positioned to avert any major short-term supply shock in crude oil. However, it is unlikely to escape the financial impact. Global prices of crude oil and LNG have already surged amid the conflict, increasing the risk of higher import bills and inflationary pressures.

If the disruption proves temporary, India’s diversified sourcing and existing inventories may prove sufficient. But a prolonged blockade of Hormuz could test the limits of the country’s energy buffers — particularly in LNG and LPG — and intensify price volatility across markets.