India should follow Chinese playbook for oil: Top energy expert's advice to New Delhi
Anas Al Hajji says India must build massive reserves like China to secure supplies and blunt price shocks
- Sep 29, 2025,
- Updated Sep 30, 2025 1:51 PM IST
India needs to rethink its oil strategy by learning from China's playbook of building massive inventories to influence markets and shield itself from price shocks, according to leading energy expert Dr. Anas Al Hajji.
"India's problem right now when it comes to oil market is - its inventories are very low and they need to enlarge those inventories to kind of be more energy secured on one side and not to be affected by this sudden increase in prices because of various political issues around the world," Al Hajji said in an interview with The Core.
He noted that China, since 2016, has fundamentally altered oil market dynamics by acting not just as a large importer but as a powerful buyer. "China will buy low, store the oil and when oil prices go up, start dumping oil from storage on the market. This is a new behavior in the market and it became extremely influential...as influential as the OPEC members or OPEC plus members in the market," he said, adding that India cannot play that role as it does not have that kind of storage.
Al Hajji, Managing Partner at Energy Outlook Advisors, pointed out that India's inventories stand at around 100 million barrels-far too low for the size of its economy. "They need to go to at least 350 or 400 million, and there are investments that have been outlined or announced for building more strategic reserves," he said.
The energy expert explained that earlier there was some sort of oligopoly in the market. But China changed that game by being a very influential buyer. "That changed the market, basically prevented oil prices from going up substantially," he said, adding that India does not yet have the capacity to play that role.
The expert also explained why New Delhi cannot simply follow Washington's advice to replace Russian barrels with U.S. shale oil. "India cannot import much from the United States. They can add probably one tanker a month or two tankers a month and that's it to replace Russian oil. Indian refineries basically are geared toward medium sour and heavy sour crude, while most of US exports are light sweet because US shale produces light sweet crude," he said.
"If Trump talks to Prime Minister Modi and said you have to buy more from us, it's not up to Prime Minister Modi because it's a technical issue. We cannot get your oil simply because it’s light sweet," Al Hajji added.
Historically, India has relied on the Gulf states and Iraq for most of its oil, occasionally diversifying into imports from West Africa and Latin America. The Ukraine war and Western sanctions forced Russia to sell crude at discounts, which India absorbed-replacing costlier long-haul imports.
"India started importing the Russian crude at a discount. And that Russian crude has to come at the expense of someone else. Logically speaking you are going to replace the most expensive crude. India first replaced the South American crude, then the US crude, then West African crude just based on the distance," Al Hajji said.
If Russian flows are disrupted, he said, the replacement would follow the reverse order: "The first replacement for Russian crude is going to come from West Africa and then the United States and Latin America.” Spare capacity in the Gulf could also fill the gap, though, Al Hajji cautioned, "The question is will they do it and how much they are going to increase production to compensate. This no one can answer at this stage."
India needs to rethink its oil strategy by learning from China's playbook of building massive inventories to influence markets and shield itself from price shocks, according to leading energy expert Dr. Anas Al Hajji.
"India's problem right now when it comes to oil market is - its inventories are very low and they need to enlarge those inventories to kind of be more energy secured on one side and not to be affected by this sudden increase in prices because of various political issues around the world," Al Hajji said in an interview with The Core.
He noted that China, since 2016, has fundamentally altered oil market dynamics by acting not just as a large importer but as a powerful buyer. "China will buy low, store the oil and when oil prices go up, start dumping oil from storage on the market. This is a new behavior in the market and it became extremely influential...as influential as the OPEC members or OPEC plus members in the market," he said, adding that India cannot play that role as it does not have that kind of storage.
Al Hajji, Managing Partner at Energy Outlook Advisors, pointed out that India's inventories stand at around 100 million barrels-far too low for the size of its economy. "They need to go to at least 350 or 400 million, and there are investments that have been outlined or announced for building more strategic reserves," he said.
The energy expert explained that earlier there was some sort of oligopoly in the market. But China changed that game by being a very influential buyer. "That changed the market, basically prevented oil prices from going up substantially," he said, adding that India does not yet have the capacity to play that role.
The expert also explained why New Delhi cannot simply follow Washington's advice to replace Russian barrels with U.S. shale oil. "India cannot import much from the United States. They can add probably one tanker a month or two tankers a month and that's it to replace Russian oil. Indian refineries basically are geared toward medium sour and heavy sour crude, while most of US exports are light sweet because US shale produces light sweet crude," he said.
"If Trump talks to Prime Minister Modi and said you have to buy more from us, it's not up to Prime Minister Modi because it's a technical issue. We cannot get your oil simply because it’s light sweet," Al Hajji added.
Historically, India has relied on the Gulf states and Iraq for most of its oil, occasionally diversifying into imports from West Africa and Latin America. The Ukraine war and Western sanctions forced Russia to sell crude at discounts, which India absorbed-replacing costlier long-haul imports.
"India started importing the Russian crude at a discount. And that Russian crude has to come at the expense of someone else. Logically speaking you are going to replace the most expensive crude. India first replaced the South American crude, then the US crude, then West African crude just based on the distance," Al Hajji said.
If Russian flows are disrupted, he said, the replacement would follow the reverse order: "The first replacement for Russian crude is going to come from West Africa and then the United States and Latin America.” Spare capacity in the Gulf could also fill the gap, though, Al Hajji cautioned, "The question is will they do it and how much they are going to increase production to compensate. This no one can answer at this stage."