Secret caves to Russian crude: India's shield against Iran war oil shock

India imports around 90% of its energy needs, leaving it vulnerable to sudden supply chain shocks, as the Iran war has shown. However, over the years, India has quietly strengthened its energy security via a network of underground storage caves and by diversifying its oil basket. Thus, despite the Middle East turmoil, oil is well for India.

The Iran war has exposed India's energy reality - Delhi imports around 90% of its crude oil, and 60% of its LPG and 50% of its LNG requirements. Such high dependence makes India vulnerable to sudden supply chain shocks, as the closure of the Strait of Hormuz has shown. However, over the years, India has quietly strengthened its energy security via a network of underground storage caves and by diversifying its oil basket. The strategic moves have prevented India from pressing the panic button, while countries like Pakistan have gone into lockdown mode.

However, it is not that the ripple effect of the Middle East conflict has not been felt by India. Prices of LPG, widely used as a cooking fuel, have been increased, and several states have reported shortages of commercial cylinders, mainly affecting restaurants and hotels. While price volatility may be unavoidable, India remains better placed than before on its energy security. Stay with us, and we will explain how.

Let's understand the present situation first. According to Petroleum Minister Hardeep Singh Puri, India has 25 days of crude oil. Petrol and diesel stocks can last another 25 days apart from the strategic oil reserves. Cooking gas or LPG can last around 25-30 days, while LNG, primarily used for industrial applications, avilability is around 10 days.

However, India is far from losing its sleep. The key to it is its secret underground crude oil storage caves at three key locations -- Visakhapatnam (Andhra Pradesh), Mangaluru (Karnataka), and Padur (Tamil Nadu).

The oldest among them is in Vizag, developed about 10 years ago by Indian Strategic Petroleum Reserves Ltd. These caves can together hold 5.33 million metric tonnes of crude oil (40 million barrels), sufficient for around 10 days of national requirement.

What makes such underground facilities ideal is that they remain secure from external attacks or drone strikes and natural disasters. Moreover, these require lower operational costs and being deep underground, the caves minimise risks of fire or oil spillage.