Brent crude surged past $85 a barrel on Tuesday, soaring for a third straight session as the widening US-Israeli conflict with Iran disrupted fuel shipments and effectively shut off the Strait of Hormuz, triggering fresh volatility in global energy markets.
Even as oil prices hit their highest level since July 2024, officials here said it remained comfortably stocked with around 50 days of crude and petroleum product inventories, cushioning the immediate impact of the crisis.
Crude oil benchmarks rose about 8% on Tuesday. Brent crude futures were up $6.05, or 7.8%, at $83.79 a barrel by 1143 GMT after touching $85.12—their highest since July 2024. US West Texas Intermediate (WTI) gained $5.31, or 7.5%, to $76.54 after hitting $77.53, its strongest level since June.
The rally followed a 13% surge at the start of the week as markets priced in the risk of prolonged disruption in the Strait of Hormuz, which carries nearly 20% of global oil flows and roughly one-third of seaborne crude exports.
India, however, remains in what officials described as a stable position. “India holds sufficient crude and fuel inventories to meet domestic demand for petrol, diesel and other fuels for six to eight weeks,” a top government source said.
Oil stocks held by state-run oil marketing companies (OMCs)
State-run oil marketing companies (OMCs) currently hold crude stocks sufficient for about 25 days and petrol and diesel inventories for another 25 days, taking the cumulative buffer to nearly 50 days, over and above strategic petroleum reserves.
A senior oil ministry official said the government is monitoring the situation “on a daily and hourly basis” and is confident of navigating through the crisis even if it lasts “a week or ten days.” The ministry has established a 24×7 control room to continuously monitor supply and stock positions across the country.
Shipping through the Strait between Iran and Oman has slowed sharply after Iranian warnings to vessels and insurers withdrew coverage following US and Israeli strikes on Iranian government, military and nuclear facilities.
Tehran retaliated with missile and drone attacks targeting Israel and countries hosting US forces. About half of India’s crude and LPG imports transit through the Strait of Hormuz, making the corridor critical to energy security.
What did oil minister say?
“The country is well stocked with crude oil and inventories of key petroleum products including petrol, diesel and ATF to deal with short-term disruptions arising from the Middle East,” the petroleum ministry said after Oil Minister Hardeep Singh Puri briefed the media.
However, the natural gas and LPG positions are relatively tighter. India’s main LNG supplier, Qatar, uses the Strait of Hormuz for shipments, and production disruptions there have raised concerns over global LNG availability.
Jan-Eric Fahnrich, Senior Analyst, Gas & LNG Research at Rystad Energy, said: “With Qatari LNG output halted and the Strait of Hormuz closed, global LNG supply is set to tighten sharply, a trend already reflected in recent price movements. The scale of lost volumes will depend on the extent of any infrastructure damage, which is still being assessed, and the duration of the Strait’s closure to maritime traffic.”
He added that in a limited disruption scenario involving a 15-day halt, global LNG output in 2026 could decline by 4.3%, equivalent to about 3.3 million tonnes (Mt).
“A more prolonged disruption could result in 5.6 Mt of lost supply, while a full-scale interruption lasting four to five weeks before the Strait reopens to commercial traffic would translate into a loss of approximately 11.2 Mt for the full year 2026,” Fahnrich said.
“Given the central role of LNG exports in Qatar’s economy and in global trade flows, we expect production to be restored within weeks rather than months,” he added.
For India, LPG stocks currently cover 21–25 days, and OMCs are already in the market for fresh contracts. The new supply deal with Canada is expected to help meet India’s cooking gas demand, while additional LPG supplies from the United States — which began arriving in January this year — are also supporting diversification.
Officials said alternative suppliers are being tapped to ensure continuity if disruptions through Hormuz persist. Some industrial gas supplies have already been curtailed as a precautionary measure.
India’s commercial crude stocks — including strategic reserves at Mangaluru, Padur and Visakhapatnam — total around 100 million barrels. With imports via Hormuz averaging roughly 2.5 million barrels per day out of total imports slightly above 5 million bpd, these reserves could theoretically cover 40–45 days of crude imports in a disruption scenario. Additional refined product inventories would extend effective coverage further.
However, higher crude prices, rising freight and war-risk insurance costs could inflate India’s import bill and stoke inflation. India spent $137 billion on crude oil imports in FY25 and $100.4 billion in the first ten months of the current fiscal year alone.