India to expand strategic oil reserves
India has directed the state-backed Oil and Natural Gas Corporation to build and fill another strategic petroleum reserve (SPR) facility, which would expand its reserve capacity by a third, a report has said.
The oil explorer and producer will invest an estimated $1.6 billion to implement the federal government’s directive. New Delhi is prioritizing energy security in the wake of the Middle East conflict, which depleted its strategic reserves and exposed its vulnerability to oil shocks.
The proposed 1.75 million metric ton (MMT) underground facility in the southern port city of Mangaluru is expected to increase New Delhi’s current emergency reserve capacity of 5.33 MMT by a third, The Economic Times reported.
ONGC would require $602 million for construction and $1.2 billion for filling the facility with crude oil, according to estimates based on current oil prices.
It is reportedly the first time New Delhi has asked a state-backed oil company to develop an SPR facility, but there is no clarity on how ONGC will recover the costs.
India currently has three SPR facilities located in the southern states of Andhra Pradesh and Karnataka. These were funded by the government and are owned by Indian Strategic Petroleum Reserves Ltd, a state-owned special purpose vehicle.
A phase 2 plan to add 6.5 MMT was approved earlier.
India’s daily consumption is five million barrels of oil per day, making its SPR capacity of about 39 million barrels look meager compared to the reserves of other major economies.
New Delhi held just 21 million barrels of strategic crude stocks at the end of 2025.
Washington’s SPR has a total storage capacity of 714 million barrels, although it has steadily released barrels to tamp down oil prices amid the US-Israeli war with Iran. It still holds 340 million barrels, or about 84 days of supply.
China’s reserves, at more than 220 million barrels, can last 60 days, while Japan’s 324 million barrel-reserve can last 230 days.
