Why Strategic Reserves of Oil and Food Are India's Best Shield Against Global Shocks
The ongoing West Asia conflict has disrupted about a fifth of the world's daily oil supply that transits the Strait of Hormuz. Yet global crude prices have not surged as dramatically as during the shocks of 2022 or 2008. One key reason: coordinated action by the International Energy Agency (IEA). On March 11, IEA member countries decided to release 426 million barrels from their emergency oil stockpiles over four months. This injection helped keep crude prices between $90 and $110 per barrel in April-May, and they eased to $70-80 by mid-June, when the conflict appeared to subside. Hostilities have since resumed, and the oil buffers are thinning due to earlier drawdowns.
India's food reserves tell a similar story. The Food Corporation of India held 121.7 million tonnes of rice and wheat as of June 1 — nearly three times the required minimum. Government agencies also hold over 4 million tonnes of pulses. Globally, record harvests of wheat, rice, corn, sugar, soyabean, palm oil, and rapeseed in 2025-26 have created ample supplies. These stocks can cushion any production shortfalls caused by El Niño in the current agricultural year.
The contrast with 2022 is instructive. At the start of the Russia-Ukraine war, the world was still recovering from Covid lockdown supply chain disruptions. Buffers were inadequate to absorb the oil and food price shocks. For India, the situation was worsened by a strong El Niño in 2023-24, which triggered prolonged food inflation. Today, stronger reserves provide a vital shield.
Strategic reserves are not a permanent solution but a critical buffer. They buy time for markets to adjust and for alternative supplies to come online. Maintaining adequate reserves requires foresight and investment. For a country like India, which imports most of its oil and depends on rain-fed agriculture, these buffers are essential for economic stability and food security.
