India Must Revise Its Oil-Gas Storage Policy

June 20, 2026

Abhishek Vij

As announced by US President Donald Trump, a peace deal has been signed between the US and Iran. Decisions regarding the remaining terms of the agreement are expected to be finalized gradually over the next 60 days. It is hoped that the global imbalance in oil and gas supplies, which arose due to the conflict, will return to normal now that the hostilities have ended. The cessation of hostilities is having a direct impact on oil markets. Crude oil prices, which had surged to as high as $115 per barrel during the intense standoff between the US, Israel, and Iran, have now dropped to $75 per barrel.

This level is close to the pre-war situation, when crude oil prices hovered around $70 per barrel. During the conflict, oil and gas supplies were disrupted to such an extent that even the US—a major oil producer itself—saw oil prices soar. In light of this situation, experts believe that India needs to reconsider its petrol and LPG storage policy for the future. A look at India’s current storage levels suggests we have been fortunate; the country’s strategic petroleum reserve of crude oil is currently sufficient for only 9 to 10 days of requirements.

This implies that had the conflict not ended—and had there been no prospect of oil and gas supplies normalizing—India would have faced a severe shortage of these fuels. The Council on Energy, Environment and Water (CEEW) released a report on Wednesday addressing this issue. The report notes that, like India, countries such as Japan, South Korea, and China also rely on crude oil imports. China faced the greatest challenge, as it imports 90 percent of its oil requirements from Iran. Now that the situation is normalizing, it is evident that among these nations reliant on crude oil imports, India held the lowest level of oil reserves.

In contrast, Japan, South Korea, and China maintain oil reserves sufficient for more than 200 days of their needs. A second key point highlighted in the report is that over 85 percent of our country’s total crude oil imports originate from just six nations—Russia and a group of West Asian countries. Any disruption or shock to this supply chain—such as the one caused by the recent war—severely limits our ability to manage demand. The country currently lacks a dedicated strategic storage facility for LPG; establishing one is now essential. The absence of such a facility recently posed risks to fertilizer plants and urban gas distribution systems. A similar issue exists regarding the imported coking coal required for steel production, which comes from Australia, while non-coking coal is imported from Indonesia. Until an alternative energy source is developed, the solution lies in greater diversification; other sources of oil and gas must be explored. Furthermore, Indian refineries are currently permitted to hold only ten days’ worth of oil for operational needs; this storage capacity should be increased. With oil prices currently falling, this is the ideal time for the Government of India to purchase oil and gas on a large scale and expand its storage capacity. The war has taught us a hard lesson, and a new policy must be formulated to prevent a recurrence of this situation