India’s Crude Oil Stocks Rebound to Near One-Year High Amid Supply Stability

India has successfully replenished its crude oil reserves, with inventory levels climbing back toward a one-year high following a period of volatility. Driven by aggressive import volumes, the country has managed to rebuild its stockpiles after significant depletion caused by the US-Iran conflict.

Rapid Recovery of Crude Inventories

After facing a sharp decline in stocks during the peak of the US-Iran conflict, India's crude oil inventories have staged a significant recovery. At the end of February, prior to the geopolitical disruptions, stockpiles stood at 107 million barrels. However, as import flows were interrupted, refiners relied heavily on existing reserves, causing stocks to slide to 95.5 million barrels in March and hitting a low of 90.5 million barrels by the end of April.

According to data from Kpler, the situation has turned around decisively. By the end of June, India's crude oil inventory reached approximately 104 million barrels. With India’s daily consumption hovering around 5 million barrels, these current levels provide a buffer sufficient to meet approximately 21 days of national demand.

The Strategic Pivot to Russian Crude

The geopolitical tension in the Middle East, particularly the threat to the Strait of Hormuz which handles nearly 40% of India's crude imports, forced Indian refiners to diversify their sourcing strategies. This shift has solidified Russia's position as India’s primary energy partner.

In June, imports of Russian crude oil crossed a historic milestone of 2.5 million barrels per day (mbpd), accounting for more than half of India's total crude purchases. Over the four-month period of conflict, India imported more than 240 million barrels from Russia. To put this dominance in perspective, this volume is more than four times the 58 million barrels imported from the UAE, India's second-largest supplier, during the same period.

Stabilizing the Energy Landscape

While Russia has emerged as the dominant supplier, the import basket remains diversified. The UAE and Saudi Arabia continue to hold the second and third positions, respectively, while Venezuela has also climbed into India's top five crude sources.

The stabilization of the market has been further aided by an interim agreement between the US and Iran, allowing shipping through the Strait of Hormuz to partially resume. Oil Minister Hardeep Singh Puri confirmed that the immediate supply crisis has eased, noting that vessels previously delayed in the Persian Gulf are now moving through without significant problems. This resurgence in import volumes—rising from 4.47 mbpd in March to 4.93 mbpd in June—has been the cornerstone of India's inventory replenishment strategy.

Key Takeaways

  • Inventory Rebound: India's crude stocks rose to 104 million barrels by the end of June, recovering from a low of 90.5 million barrels in April.
  • Russian Dominance: Russia has become India's largest supplier, providing over 2.5 mbpd in June and exceeding 240 million barrels in total over the last four months.
  • Supply Security: Current inventory levels are sufficient to cover approximately 21 days of India's daily 5 million barrel crude consumption.