India's Energy Security: Navigating Global Gas Markets and Domestic Production

India's petroleum and natural gas minister, Hardeep Singh Puri, recently reassured the public that the country possesses sufficient energy supplies to meet demand and manage short-term disruptions, despite escalating geopolitical tensions in West Asia involving Iran and disruptions around the Strait of Hormuz. These tensions have raised concerns about potential fuel shortages and price spikes, particularly as roughly one-fifth of the world’s oil supply passes through the Strait of Hormuz, a critical energy transit route.

India maintains a robust energy buffer, holding over 250 million barrels of crude oil and refined petroleum products combined, which translates into 7 to 8 weeks of buffer coverage across the full supply chain. These stocks are strategically distributed across above-ground storage tanks, underground strategic caverns, pipeline systems, terminal tankage, offshore storage vessels in transit, and three dedicated strategic petroleum reserve facilities located at Mangalore, Padur, and Visakhapatnam. Government officials also noted that India currently holds around 25 days of crude oil supply, along with additional reserves of refined fuels.

To mitigate risks, India has significantly diversified its crude oil import sources, expanding its supplier base from 27 to 40 countries across six continents over the last decade. This strategy ensures that only around 40% of India’s crude imports pass through the Strait of Hormuz, with about 60% routed through unaffected alternative supply routes. Russia remains India’s largest crude oil supplier, with Indian refiners importing approximately 1.0 to 1.7 million barrels of Russian crude per day in February 2026, accounting for 25–30 per cent of total oil imports. This continued procurement, including discounted Russian oil, has helped maintain stable fuel prices, with retail petrol prices remaining stable for four consecutive years. Public sector oil companies like IOC, BPCL, and HPCL collectively absorbed losses of ₹24,500 crore to keep petrol and diesel prices frozen for Indian consumers following the Ukraine conflict.

Furthermore, India's refining infrastructure, with a capacity of 258 MMTPA (the fourth largest globally), is configured to process a wide basket of crude grades, enhancing flexibility. The country is also the fifth-largest exporter of refined petroleum products. Domestically, India's 20% ethanol blending programme displaces approximately 6 million tonnes of crude oil annually, cumulatively substituting over 181 lakh metric tonnes of crude imports since 2014 and saving ₹1.36 lakh crore in foreign exchange. Domestic energy production contributes around 15–16% of the country’s energy requirements. For LPG, the government has restricted supply to industrial and commercial consumers to prioritize household cylinder availability, with IOC, BPCL, and HPCL absorbing approximately ₹40,000 crore in losses last year to protect domestic LPG consumers. A recent 30-day waiver from the US Treasury Department, announced by Secretary Scott Bessent, permits Indian refiners to continue purchasing Russian oil, explicitly describing India as an essential partner and acknowledging its compliance with G7 price cap rules.

This comprehensive strategy of strategic reserves, diversified sourcing, robust refining capacity, and domestic production initiatives is crucial for India to ensure stable and affordable energy for its growing economy, particularly in a volatile global energy landscape. This topic is highly relevant for UPSC Mains GS Paper 3 (Economy, Infrastructure, Energy Security) and UPSC Prelims.