In 2022, after Russia invaded Ukraine, global oil prices skyrocketed to $139/barrel.
The U.S. responded by releasing 1 M barrels/day from its Strategic Petroleum Reserve (SPR), swiftly calming markets.
China (which has a runway of 100+days) and Japan (with 200+ days) also tapped their vast reserves.
But the UK — which had quietly dismantled its SPR by then — was defenceless.
In 2021, Britain decided strategic oil reserves were “redundant”
Ministers argued:
“The free market will provide.”
“We are transitioning to renewables anyway.”
Reality check:
When crisis hit, the UK had just 5 days of oil stocks (vs. 90+ for the U.S./China/Japan).
Paid hefty premiums.
Saw gas stations run dry and panic buying.
The cost?
An estimated £80 billion ($100B) in economic damage—all avoidable with an SPR.
Now, as Israeli-Iran tensions threaten the Strait of Hormuz (45-50% of India’s crude oil imports and 60% of its natural gas imports pass through these straits), India faces its own choices:
Option 1:
The UK path of risking it all on the premise that free markets will hold and that renewables will turn less capricious with time.
Option 2:
“We will build pipelines instead!” (But Nord Stream 2’s sabotage shows pipelines can become warzone targets).
“Tankers are enough!” (But the Houthi attacks prove shipping lanes can be weaponized).
Or
Option 3: A tempered Option 2 + executing towards becoming an SPR behemoth
India — though behind schedule — has a great opportunity to learn from the UK’s blunder; by creating a hybrid SPR system which incorporates the best elements from other SPRs:
1. U.S.-style speed
✔ Store oil in salt caverns (like Texas) for instant release.
✔Target 3-4M bpd surge capacity (enough to offset temporary price shocks). Incidentally, the U.S. SPR’s 4.4 million bpd surge capacity is unmatched. (The US released 1 M bpd from its reserves with ease over a 6-month window in 2022. That kind of reserve capacity has Energy Security written all over it)
(The pic, from the DOE website, serves as a reminder of how even the largest oil producer in the world today was not immune to energy-related insecurities in the past)
2. China-scale stockpiling
✔Buy cheap during crashes (like China’s 2020 $30/barrel purchase spree).
✔Mandate private refiners to hold reserves (adding 30M barrels overnight).
3. Japan-level resilience
✔A 200-day runway. That’s gold-standard insurance.
Chokepoint risks are elevated now:
A Hormuz blockade could triple India’s import costs overnight. Without a 90-day SPR, India could face energy rationing and inflation super spikes.
But with a 90-day SPR by 2030, India could:
✔ Absorb price shocks
✔ Neutralize China’s 500+ stockpile that gives it leverage during a crisis
The choice is clear
The UK gambled on markets — and lost $100B.
India, learning from this, can now build the world’s smartest SPR — one that’s too fast to outflank, too big to intimidate, and too resilient to fail.
