India energy security 2026: four options for oil imports

Why India’s oil-security debate has intensified

India is tightening energy security protocols and import diversification efforts amid the 2026 Middle East conflict and disruption risks around the Strait of Hormuz, a key global energy transit route. The immediate concern has been maintaining domestic fuel availability as shipping routes for crude, LPG and LNG come under stress. Officials have said inventories are adequate for short-term disruptions, but the episode has again underlined India’s exposure to concentrated supply corridors. India relies on the Middle East for nearly half of its crude oil imports, about 30% of gas, and 85-90% of LPG, according to the details shared in the text. Against that backdrop, experts and policymakers are outlining a renewed energy security strategy that addresses short-term buffers and long-term resilience.

Four near-term options India has on the table

Faced with sudden disruptions to oil imports, the text lays out four broad options for India. The first is returning to purchasing Russian oil, particularly after a short-term sanctions waiver allowed refiners to buy Russian oil cargoes, including barrels floating on the high seas. The second is diversifying supply routes and sources beyond the Strait of Hormuz, including sourcing from suppliers that can bypass the chokepoint. The third is enhancing domestic strategic reserves to extend the buffer for refineries during import disruptions. The fourth is developing a long-term oil security strategy that also includes measures for energy transition, so that the economy’s exposure to oil shocks reduces over time.

What the government says about current fuel availability

The central government has maintained that India’s crude oil supply remains stable despite the disruption risks around Hormuz. A 24×7 control room has been set up to track petroleum stocks and fuel availability nationwide. On March 11, 2026, the government announced that inventories of petrol, diesel, and aviation turbine fuel remained sufficient to manage short-term disruptions. The text also notes official estimates for days of cover across fuels, including crude, road fuels, cooking gas, and LNG. While market sentiment has been volatile, the government’s messaging has focused on supply continuity, emergency planning, and diversification.

Emergency steps to protect household cooking fuel

LPG availability has been highlighted as the immediate priority because it is the cooking fuel used by hundreds of millions of households. As disruptions squeezed supplies, the government invoked emergency powers ordering refiners to maximise LPG production and reduce sales to industry. Authorities also began diverting gas supplies from non-priority sectors to critical users, while securing alternative cargoes. India has also prepared emergency kerosene distribution plans, and Union Minister Piyush Goyal said kerosene production has been ramped up to provide an alternative cooking medium if LPG supplies are delayed. The government has also invoked the Essential Commodities Act amid the LPG shortage and has been restructuring gas allocation priorities, with domestic LPG placed at the top.

Import diversification: suppliers, routes, and non-Hormuz sourcing

India has been turning to a wider pool of suppliers for LPG cargoes, including the United States, Norway, Canada and Russia, while continuing to draw from Gulf sources. Officials and commentators cited in the text also pointed to sourcing crude from South American markets, and to routing options such as sourcing from Saudi Arabia’s Red Sea coast and from the Oman side to bypass the Strait of Hormuz. A key metric referenced is that non-Hormuz sourcing for oil and gas has risen to 70%, up from 55%. The text also states that India’s crude supplier base is already diversified, with close to 40 countries in the crude basket, and that India is looking to ramp up volumes from alternate sources.

Strategic petroleum reserves: current capacity and expansion plans

Strategic petroleum reserves remain a central part of India’s short-term buffer strategy, but the text stresses that limited scale necessitates expansion and better integration into energy security planning. India has three SPR facilities at Visakhapatnam, Mangalore and Padur, with a combined capacity of 5.33 million tonnes, described as roughly 40 million barrels and about 9-10 days of national demand (also stated as roughly 9.5 days). The government has approved a second phase of expansion to approximately 12 million tonnes, about 22 days of consumption, with new facilities planned at Chandikhol (Odisha) and Padur Phase 2, expected to take 3-5 years to build. Separately, the text notes that augmenting strategic reserves by 6 million metric tons would extend the buffer for Indian refineries by an additional ninety days.

Domestic production, refinery configuration, and infrastructure needs

Multiple voices in the text argue that boosting domestic production is critical and that India should aggressively pursue domestic exploration to build resilience. The Open Acreage Licensing Policy (OALP) is referenced as expanding access to previously restricted areas, including deep-sea blocks in the Krishna-Godavari basin and Rajasthan’s Barmer region. The discussion also extends to refinery infrastructure modifications, including the costs associated with reconfiguring operations for shifts in product supply. On LPG, one statement in the text notes that India has boosted domestic supply from 30% earlier to 60% now, with refiners reconfiguring operations to support the shift, though it “has come at a cost.”

Policy tools: duties, monitoring, and trade-risk coverage

Beyond fuel operations, the government has used policy tools to manage wider supply-chain risks. The central government introduced a full customs duty exemption on selected critical petrochemical products until June 30, 2026, amid ongoing disruptions. The commerce ministry has also been engaging export promotion councils daily and has worked on schemes to create insurance cover if export cargo is damaged, lost, or inordinately delayed due to the Red Sea problem, the Strait of Hormuz problem, or shipping line difficulties. These measures reflect a broader attempt to reduce downstream disruptions in petrochemicals and trade flows when energy logistics are stressed.

Energy transition and demand-side resilience

The text presents the long-term solution as reducing oil dependence through an accelerated energy transition policy. Measures referenced include EV adoption, renewable power expansion, and biofuel blending, along with green hydrogen pilot projects aimed at replacing LNG in industrial use. Specific numbers cited include 7.8 million EVs registered in India as of March 2026 (up from 3.5 million in 2024) and solar capacity at 110 GW. Demand-side measures are also part of the resilience playbook, including equitable fuel distribution, curbing hoarding, and promoting efficiency. One suggestion highlighted is prioritising piped natural gas for households, with a stated preference for PNG direction over CNG in this context.

Key facts and buffers mentioned

Market impact: where the pressure is showing up

The most immediate pressure point described is LPG, where shipping disruption risks can translate quickly into household supply concerns. That is why emergency directions focused on maximising LPG output and reducing industrial sales, along with kerosene backup plans and diversified imports for LPG and LNG. The text also links supply-chain disruptions to petrochemicals, where the duty exemption until June 30, 2026 aims to ease pressures on selected critical products. For exporters, trade-risk insurance coverage is being positioned as a buffer against shipping delays and cargo losses tied to Red Sea and Hormuz route problems. Overall, the measures outlined are designed to stabilise domestic fuel availability, manage rationing and allocation priorities where necessary, and reduce the chance of panic buying and hoarding.

Analysis: why the current episode is pushing a strategic reset

The material repeatedly points to the gap between short-term crisis management and long-term resilience. Strategic reserves provide buffers, but the current scale and the multi-year timeline for new facilities mean that logistics, diversified contracts, and domestic production still carry heavy weight. The text also frames resilience as more than crude sourcing, extending to LNG and LPG storage rules, shipping and trading capability, and refinery flexibility. Alongside this, the energy transition is presented as a security strategy, because electrification, renewable power, and biofuels can reduce exposure to oil price and supply shocks. The combination of expanded reserves, non-Hormuz sourcing, and a faster transition is positioned as the long-term framework for handling geopolitical disruptions.

Conclusion: what to watch next

India’s response to the 2026 disruption risks has centred on diversified imports, emergency fuel management, and expanding strategic reserves while accelerating the energy transition. In the near term, government monitoring through the 24×7 control room and continued sourcing from diversified suppliers will remain key. Over the medium term, progress on Chandikhol and Padur Phase 2 will be a major milestone, given the stated 3-5 year build timeline. The longer-term agenda in the text is a multi-layered energy security strategy that expands reserves, strengthens domestic production, builds regional energy supply chains, and reduces oil dependence through electrification, renewables, and biofuels.