India's crude oil reserves have staged a strong recovery, rising close to their highest level in nearly a year after increased imports helped replenish
inventories that had fallen sharply during the June quarter amid geopolitical tensions. According to estimates from commodity intelligence firm Kpler, the country's crude oil inventory reached 104 million barrels at the end of June, a significant increase from 90.5 million barrels recorded at the end of April. The data covers strategic petroleum reserves, refinery holdings and commercial inventories, while excluding crude stored in pipelines and cargoes that are still en route to India. With daily crude oil consumption averaging around 5 million barrels, the current stockpile is sufficient to meet approximately 21 days of domestic demand. India entered the geopolitical crisis with relatively comfortable crude reserves. At the end of February, when the Iran conflict began, inventories stood at 107 million barrels, marking the highest month-end level in the previous 12 months. As the conflict affected global crude movements, domestic refiners relied on stored inventories to maintain refinery operations. As a result, crude stocks declined to 95.5 million barrels by the end of March and slipped further to 90.5 million barrels by the end of April. The decision to continue operating refineries at elevated levels was intended to prevent disruptions in fuel availability across the country. Keeping fuel supplies stable also helped avoid long queues at petrol pumps and potential public dissatisfaction. Confirming the situation, Oil Minister Hardeep Singh Puri said, "By and large, there was no disruption or shortage or queues (at pumps)." Although isolated reports of fuel shortages and rationing emerged in a few states, the government attributed them to panic buying, customers shifting from private fuel retailers to state-run outlets, and bulk buyers purchasing fuel from retail stations. Concerns over the possible closure of the Strait of Hormuz prompted Indian refiners to aggressively source crude oil from alternative suppliers around the world. Since nearly 40 per cent of India's crude imports typically pass through the strategic waterway, companies moved quickly to secure supplies, even at higher prices. The availability of Russian crude following the US sanctions waiver also helped soften the impact of supply disruptions, limiting the overall decline in imports. Kpler data shows crude imports fell to 4.47 million barrels per day (mbd) in March from 5.2 mbd in February. Imports improved marginally to 4.54 mbd in April before rebounding to 4.96 mbd in May. June imports remained steady at 4.93 mbd, reflecting a gradual normalization of supply. Supply Concerns Ease As Shipping Resumes The outlook for crude supplies has improved following an interim agreement between the United States and Iran, which has allowed partial restoration of shipping through the Strait of Hormuz. The reopening of transit routes has reduced fears of prolonged disruptions to India's energy imports. Providing an update on shipping activity, Puri said, "All our vessels are through." Referring to cargoes that had faced delays in the Persian Gulf, he added, "We are now in a situation where it's not problematic." With inventories rebuilding and crude imports stabilising, India appears to have strengthened its energy security after navigating several months of uncertainty caused by geopolitical tensions in the region.
