India's Oil Reserves Drained Amid Conflict Fears

India's crude oil stocks have experienced a significant 15% reduction since the end of February, according to estimates by Kpler. This decline, from 107 million barrels to 91 million barrels, is attributed to refiners drawing down inventories to sustain processing rates amid decreasing imports.

Currently, India's oil reserves are estimated to cover approximately 18 days of its daily 5 million barrel consumption. The ongoing reliance on inventory drawdowns is becoming a concern, particularly as global oil inventories also show significant decreases. Analysts suggest this situation may partly explain the Prime Minister's recent appeal for fuel conservation.

Declining crude imports, averaging 4.5 million barrels per day since the conflict began, have not been matched by proportional reductions in refinery run rates. This indicates a current reliance on existing stock levels. However, with uncertainties surrounding key shipping routes like the Strait of Hormuz, this strategy cannot be maintained indefinitely.

Global oil inventories have fallen substantially, raising concerns about further price volatility, especially with the approach of peak summer demand. The impact on supply from regions dependent on the Strait of Hormuz has been severe, with some nations halting exports entirely, affecting overall global oil availability.