# Crude oil and Fuel stocks and strategic reserves

Strategic reserves are crude held back for emergencies, so they are worth what crude is worth and matter most when supply breaks. IEA members must hold 90 days of net imports and in March 2026 agreed their largest ever release, 400 million barrels; India's caverns hold 5.33 Mt, about 9.5 days of need, within some 74 days of total cover.

Source page: https://www.materialinsights.org/links/crude-oil-and-fuel-stocks-and-strategic-reserves/

[Crude oil](https://www.materialinsights.org/energy/crude_oil/) (energy) and [Fuel stocks and strategic reserves](https://www.materialinsights.org/energy/e_fuel_stocks/) (energy): 4 relationships.

## How they are linked

### 1. Reserves are filled with crude

*Physical flow · Strong · Crude oil → Fuel stocks and strategic reserves*

A strategic reserve is built by buying crude and storing it in caverns or tanks, so filling it adds to demand and releasing it adds to supply.

- **5.33 MMT** capacity of India's strategic reserve at Visakhapatnam, Mangaluru and Padur
- **about 64%** share of that capacity filled, March 2026
- **6.5 MMT** further capacity approved at Chandikhol and Padur, July 2021

India's reserve held about 3.37 Mt of crude in March 2026, so there was room to buy when prices were low. The second phase is a public private partnership, and a parliamentary committee reported in March 2026 that delays in bidding and land allocation had left most of its budget unspent for three years.

Sources: [Ministry of Petroleum and Natural Gas, Lok Sabha](https://eparlib.nic.in/bitstream/123456789/2974287/1/AU1056.pdf); [News Arena India](https://newsarenaindia.com/nation/india-s-strategic-oil-reserves-at-64-capacity-govt-tells-rs/72931); [ThePrint (Standing Committee on Petroleum and Natural Gas)](https://theprint.in/india/build-up-stalled-house-panel-pulls-up-govt-on-underutilisation-of-funds-for-new-crude-storage-sites/2882679)

### 2. The 90-day rule

*Policy · Strong · Stockholding rules → crude storage demand*

IEA countries must hold oil stocks equal to at least 90 days of net imports, as government, agency or obligated industry stocks.

- **90 days** minimum IEA stock obligation, in days of net imports
- **5** IEA collective actions before 2026: 1991, 2005, 2011 and two in 2022

India is not bound by the 90-day rule. Its strategic reserve covers about 9.5 days of crude needs and oil company storage another 64.5 days, giving about 74 days in total, below the IEA benchmark although the measures are not defined identically; the same committee urged India to reach 90 days.

Sources: [Ministry of Petroleum and Natural Gas, Lok Sabha](https://eparlib.nic.in/bitstream/123456789/2974287/1/AU1056.pdf); [IEA](https://www.iea.org/reports/oil-security-policy); [ThePrint (Standing Committee on Petroleum and Natural Gas)](https://theprint.in/india/build-up-stalled-house-panel-pulls-up-govt-on-underutilisation-of-funds-for-new-crude-storage-sites/2882679)

### 3. Buffer against supply shocks

*Shared risk · Strong · Supply disruption → stock release → crude market*

When a chokepoint closes, released stocks bridge the gap until trade reroutes, which caps how far crude prices can spike.

- **400 mb** IEA collective action agreed on 11 March 2026, by far the largest ever
- **172.2 mb** United States contribution, all public crude stocks
- **79.8 mb** Japan contribution, including 25.8 mb of obligated industry stocks

The 2026 release responded to what the IEA called the largest supply disruption in the history of the oil market, during the Middle East war. Stocks buy time rather than replace lost supply, and refilling them later adds to crude demand.

Sources: [IEA](https://www.iea.org/news/iea-confirms-member-country-contributions-to-collective-action-to-release-oil-stocks-in-response-to-middle-east-disruptions)

### 4. Price link: stored product

*Cost and price · Strong · Both ways*

Reserves hold crude, so the value of a reserve is the crude price; the site's reserve series is an average of crude benchmarks that includes Brent.

- **0.99** monthly change correlation with Brent
- **1.00** 12-month change correlation
- **0.98** fitted elasticity

The near-perfect link is partly built in, because Brent is one of the three parts of the average. The economic point is timing: buying in slumps and releasing in spikes is how a reserve earns its cost.

Sources: [Material Insights (World Bank, FRED, IMF data)](https://www.materialinsights.org/energy/crude_oil/correlation/)

## For investors

### Key learnings

1. Emergency stock releases cap crude price spikes but must be refilled, so a large release such as 2026's adds to crude demand for months or years afterwards.
2. IEA stockholding rules create steady storage demand in importing countries, part of it held by obligated companies as working capital.
3. India's reserve was about two-thirds full in March 2026, so government buying to top it up is a swing source of crude demand when prices fall.

### What to track

- **US Strategic Petroleum Reserve level**: Low levels mean less buffer in the next shock and future refill purchases (Weekly · EIA Weekly Petroleum Status Report)
- **IEA collective action announcements**: Signal coordinated supply into the market and later refill demand (As announced · IEA)
- **Brent prompt spread (backwardation)**: Steep backwardation shows tight prompt supply and discourages storage (Daily · ICE)

## For policymakers

### Key learnings

1. India's strategic reserve covers about 9.5 days of crude needs, so most of its 74 days of cover sits with oil companies and depends on their stocking choices.
2. Phase II storage at Chandikhol and Padur has been slowed by land and bidding delays, with most of its budget unspent from 2023-24 to 2025-26, which leaves India's buffer short as Gulf supply risks rise.
3. Filling reserves when crude is cheap and coordinating releases with the IEA, of which India is not a member, are the two levers that make storage pay.

### What to track

- **Fill level of India's strategic reserve**: Shows how much emergency crude is actually available (As reported · Ministry of Petroleum and Natural Gas, Parliament answers)
- **Days of oil cover, strategic plus company**: Falling cover raises exposure to Hormuz disruption (Quarterly · PPAC, ministry statements)
- **Progress on Phase II reserve tenders**: Award and land allocation would add 6.5 MMT of capacity (As announced · ISPRL)

## India

India holds 5.33 MMT of crude in three cavern sites, about 9.5 days of need, and about 74 days of total cover with oil company stocks; the reserve was about 64% full in March 2026.

## Sources

1. [Lok Sabha Unstarred Question No. 1056: Strategic petroleum reserves](https://eparlib.nic.in/bitstream/123456789/2974287/1/AU1056.pdf), Ministry of Petroleum and Natural Gas, Lok Sabha (2024)
2. [India's strategic oil reserves at 64% capacity, govt tells Rajya Sabha](https://newsarenaindia.com/nation/india-s-strategic-oil-reserves-at-64-capacity-govt-tells-rs/72931), News Arena India (2026)
3. [Oil Security Policy](https://www.iea.org/reports/oil-security-policy), IEA
4. [IEA confirms member country contributions to collective action to release oil stocks in response to Middle East disruptions](https://www.iea.org/news/iea-confirms-member-country-contributions-to-collective-action-to-release-oil-stocks-in-response-to-middle-east-disruptions), IEA (2026)
5. [Price correlation, Material Insights](https://www.materialinsights.org/energy/crude_oil/correlation/), Material Insights (World Bank, FRED, IMF data)
6. [Build-up stalled: House panel pulls up govt on underutilisation of funds for new crude storage sites](https://theprint.in/india/build-up-stalled-house-panel-pulls-up-govt-on-underutilisation-of-funds-for-new-crude-storage-sites/2882679), ThePrint (Standing Committee on Petroleum and Natural Gas) (2026)