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India's Energy Security: 1990-2026 Oil Shocks, $600M Gold Pledge, Strategic Reserves & Iran Strait Crisis

EconomyIntl. RelationsHIGH
Target:UPSC GS-IIIMPSCTeachingSSC GAPrelims HighMains Medium
17 Apr 2026
~2 min
Source: Indian Express
Key Data:67 tonnes gold pledged$600 million raised$147 per barrel (July 2008)12.9% inflation (Aug 2008)$1-1.2 billion forex reserves (1991)
Bodies:RBIBank of EnglandUnion Bank of SwitzerlandWorld Bank
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What This Article Covers

1.The article analyzes India's historical vulnerability to global oil shocks, from the 1990 Gulf War to the current Iran-US tensions in the Strait of Hormuz.

2.Key policy responses include the 1991 gold pledge (67 tonnes), diversification of energy imports, and the establishment of Strategic Petroleum Reserves (SPRs) to buffer supply disruptions.

3.For exam purposes, focus on the data points from each crisis, the economic impacts (BoP, inflation, growth), and India's evolving energy security strategy.

The Big Picture
Prelims · HighMains · Medium

Geopolitical crises like the Strait of Hormuz blockade and past oil shocks expose India's economic vulnerability due to high import dependence. This analysis details India's historical responses, including pledging 67 tonnes of gold in 1991 and building strategic reserves, and highlights the persistent threat of inflation, trade deficits, and slower growth from energy market volatility.

Exam Lens

Quick Exam Facts From News

Gold Pledged in 199167 tonnes (47t to Bank of England, 20t to UBS)
Foreign Currency Raised$600 million
2008 Oil Price Peak$147 per barrel (July 2008)
2008 Inflation (India)12.9% (August 2008)
1991 Forex Reserves$1-1.2 billion

1-Minute Revision

  • ›Gold Pledged in 1991: 67 tonnes (47t to Bank of England, 20t to UBS)
  • ›Foreign Currency Raised: $600 million
  • ›Target this Data: 67 tonnes of gold pledged in 1991 crisis
  • ›Target this Nodal Body: Reserve Bank of India (RBI) for gold pledge records
  • ›Target this Geo-point: Strait of Hormuz as a critical global oil chokepoint

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Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

According to the article, which institution's official records detail India's gold pledge during the 1991 Balance of Payments crisis?

Q2Statement-basedHard

Consider the following statements regarding historical oil shocks and India's response:

1. During the 1990 Gulf War crisis, India's foreign exchange reserves fell to a level insufficient to cover oil import costs.

2. In response to the 2008 oil price spike, the Government of India issued oil bonds and also increased excise duties on petroleum products.

3. The Russia-Ukraine war led India to decrease its imports of Russian crude due to Western sanctions.

Which of the statements given above is/are correct?

Q3Data-centricMedium

According to the article, what was the approximate amount of foreign currency raised by India by pledging gold during the 1991 crisis?

Q4Application/ImpactMedium

What is identified in the article as a primary long-term strategic response by India to mitigate the impact of global oil shocks?

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