N ext, imagine yourself waking up to a situation where there is a sudden increase in the price of cooking gas, huge queues at petrol pumps, and an appeal by the government to ask citizens to travel less, not because there are any shortages in the nearby area but because of the war going on in distant lands, across a sea known as the Strait of Hormuz. All of this has been happening in India since early to mid-2026 due to the war being fought between Iran, Israel, and America.
What Does This Article Deal With?
As a result of this situation, the Indian government has come to the conclusion of establishing strategic reserves of crude oil, LPG, and LNG sufficient to last an entire month of the country's fuel needs. This article is all about what has been happening, why India was so vulnerable, and what this new strategy of one month’s reserves means for the energy security of the nation.
What Sparked the Crisis?
Towards the end of February in 2026, after a joint military attack on Iran by the US and Israel, Iran closed the Strait of Hormuz for all commercial vessels—an area of about 21 nautical miles that is responsible for carrying roughly 20 percent of global oil and most of the world’s LPG. The closure was termed "unprecedented" by India’s Petroleum Minister, Hardeep Singh Puri.
Why It Had Such a Severe Impact on India
About 90 percent of India’s imports of crude oil and about 60 percent of the LPG requirement are imported from this route alone, where most of the imports are done through the Gulf region. Once the Strait was closed, the weekly flow of LPG into India fell by 30 percent instantaneously, and the cost of insurance for tankers traversing through the Gulf increased more than 500 percent in less than no time.
Ripple Effects on Everyday Life
Not just the corporate world, but the regular Indian household also was impacted by the price hike. The cost of the 14.2 kg domestic LPG cylinder went up by ₹60 to ₹913 in Delhi on March 7, 2026, for those who do not fall under the list of subsidized cylinders.
The peak level of Brent crude oil stood at more than $126 per barrel.
Approximately 33 crore Indians who are enrolled as part of the government’s clean cooking initiative, Ujjwala Yojana, found themselves hard pressed by the shortage in supply of LPG cylinders and delayed delivery.
Based on statistics from April 2026, the overall LPG consumption in India went down by 16% compared to April 2025—the most significant drop in a single month seen lately. On top of it all, the Indian currency reached a record low against the US dollar.
Why India Wasn't Ready
The situation laid bare an unpleasant reality—India's emergency oil stocks were woefully inadequate in the face of such an eventuality. Prior to this event, India’s strategic reserve had been able to satisfy just eight days of oil consumption, and LPG stocks would have lasted for five days only.
By way of contrast, international organizations like the International Energy Agency suggest that countries keep strategic reserves amounting to no less than 90 days' worth of net imports—an aim that India had been far from achieving.
The more worrying aspect of the whole scenario is the existence of risk through concentration. Due to the fact that a majority of India’s crude and LPG imports are reliant on one narrow 21-mile-long shipping channel, any disruption there may endanger energy supply to well over a billion people.
India's New Strategy: Establishing Strategic Reserves for One Month
As a consequence of the above situation, India's oil ministry has decided to create strategic reserves for crude oil, LPG, and LNG that will be sufficient to meet one month of its requirement, which is an enormous shift compared to the eight days' buffer stock that was maintained earlier.
The strategy consists of the following components:
Expansion of underground storage capacity for crude oil, with a target of 120 million barrels.
Creation of long-term buffer reserves for LPG and LNG, which were not there before.
Establishment of a floating LNG terminal as an alternative source of storing reserves.
Creating a committee under the oil ministry that will study the potential sites for storage and decide on underground and above-ground storage capacity.
Along with higher stockpiling capacity, the government has also emphasized diversification of crude oil sources other than being too dependent on the Gulf countries, as well as increasing LPG production inside the country (the officials have reported that there has been a 28% rise in LPG production because of rerouting of refineries to cope with the situation).
Why This Is Important for India's Future
One month's fuel buffer is not only a matter of protecting the interests of oil firms or balancing the government's books; it is to defend the common man against any shock in prices the next time there is some kind of geopolitical shock.
It is also important to safeguard India's economy because shocks in fuel prices have direct repercussions on inflation, transport prices, and even prices of agricultural produce.
According to experts, increased fuel reserves will be helpful not only as a cushion against future shocks but will also help India to secure a stronger negotiating position internationally.
It's important to note that building this kind of infrastructure doesn't happen overnight. Underground caverns, floating terminals, and large-scale storage facilities take years to plan, fund, and construct. Safety concerns and the sheer cost of holding a month's worth of fuel in reserve remain real challenges the government will need to work through.
