Since 1970, numerous governments have established strategic petroleum reserves (SPRs) in relation to oil supply interruptions. In this study, important oil reserves, physical oil supply disruption and social welfare losses due to physical distribution of oil supply have been measured. The physical oil supply disruption has been measured in the form of oil supply vulnerability index and oil volatility index of the South Asian economies. Analysis reveals that the accumulation and drawdown of important national crude oil strategic petroleum reserves where the state wants to optimize individual social welfare while individuals hold over stock optimize their earnings levels. The monetary deciding factors utilize the government's optimum important stockpile policy and simultaneously the amount and economic factors vital for the nongovernment market to actuate the optimum accumulation and nonaccumulation of important fossil fuels stockpile. Additionally, findings show that India is the lowest crude oil insecure country while Afghanistan and Bangladesh are the highest insecure countries in terms of oil supply. India's topmost mark shows a bigger possibility to alter the fossil fuels producers while Afghanistan, Bangladesh, Bhutan and Nepal have the minimum mark corroborating the group as the utmost producer risk exposed nations.
Keywords: Important crude oil stockpile; Oil supply risk; PCA analysis; South Asia.
© 2021. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.