A Carnegie India report flags India's weak oil security after the 2026 West Asia crisis. It criticizes the current framework, citing low strategic reserves and refinery issues, and calls for a more resilient, forward-looking strategy.
India's oil security framework has come under renewed scrutiny following the escalation of tensions in West Asia in 2026, which disrupted global energy markets and exposed vulnerabilities in the country's import-dependent energy system, according to a report by Carnegie India.
The West Asia crisis has underscored the need for India to move beyond reactive measures and adopt a more resilient and forward-looking energy security framework. The report highlights that India's current approach, based on opportunistic diversification and limited use of strategic reserves, remains inadequate to handle sustained supply shocks.
Strategic Reserves and Storage Gaps
"India requires higher onshore and offshore storage capacities, along with increased private participation, in addition to alternative methods for meeting domestic demand," the report noted.
Currently, India's strategic petroleum reserves are estimated to sustain demand for about eight weeks in the event of a complete disruption. This is significantly lower compared to major Asian economies such as China (100 days), Japan (254 days), and South Korea (200 days), which maintain substantially larger stockpiles.
Refinery Limitations and Import Diversification Hurdles
Additionally, India's refinery infrastructure is largely configured for medium-to-heavy crude grades, limiting flexibility in sourcing alternative supplies without significant technological upgrades. The report notes, "Indian refineries will require modifications or infrastructural changes to process light-grade oil without blending. Such investments will be critical to sustain this in the long term."
Diversifying imports beyond West Asia to regions such as the United States, West Africa, and Latin America would also increase logistical costs and delivery timelines, posing additional economic challenges.
Key Recommendations for a Forward-Looking Strategy
To address these structural gaps, the report recommends expanding strategic reserves, enhancing storage capacity with private sector participation, securing long-term supply contracts, and upgrading refinery capabilities.
In the long term, there is a need for a comprehensive energy transition strategy, including the accelerated adoption of renewable energy, electric vehicles, and biofuels, to reduce dependence on imported crude. (ANI)
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