Why in news?

India's Strategic Petroleum Reserves (SPRs), with a total storage capacity of 5.33 million tonnes, are currently holding 3.37 million tonnes of crude oil — just 64% of total capacity, as revealed by Minister of State for Petroleum in a written reply to the Rajya Sabha.

The SPRs are spread across three underground cavern facilities in Andhra Pradesh and Karnataka, managed by the Indian Strategic Petroleum Reserve Limited (ISPRL). At full capacity, they can cover approximately 9.5 days of India's crude oil requirements.

With one-third of storage capacity lying vacant, India's buffer against short-term supply shocks is not at its strongest at a time when it is needed most. The government noted that the reserve figure is dynamic, not static — it fluctuates depending on market conditions, incoming stocks, and actual consumption. So the 64% figure represents a snapshot, not a fixed position.

What’s in Today’s Article?

• About Strategic Petroleum Reserves (SPRs)
• India's Oil Stockpiles: Where We Stand and Why It Matters

About Strategic Petroleum Reserves (SPRs)

• These are dedicated stockpiles of crude oil maintained by countries as a buffer against sudden supply disruptions and price shocks.
• They are distinct from the routine operational reserves held by oil companies.
• Historical Background
  • The concept of SPRs was first proposed after the Oil Crisis of 1973, when Arab nations imposed an oil embargo on Western countries.
  • Since then, SPRs have been tapped during major global emergencies.
  • Countries like the US, China, and Japan maintain massive SPRs, reflecting the strategic importance of energy stockpiling for large oil-importing economies.
• India's SPR Infrastructure: Current Status
  • In India, SPRs are managed by ISPRL (Indian Strategic Petroleum Reserve Limited) — a special purpose vehicle and a wholly-owned subsidiary of the Oil Industry Development Board (OIDB).
  • India currently has three underground cavern facilities:
    • Visakhapatnam (Andhra Pradesh) – 1.33 million tonnes
    • Mangaluru (Karnataka) -1.50 million tonnes
    • Padur (Karnataka) - 2.50 million tonnes
    • Total - 5.33 million tonnes
  • At full capacity, these reserves cover approximately 9.5 days of India's crude oil needs.
• Planned Expansion: Future SPR Sites
  • In July 2021, the government approved two additional commercial-cum-strategic petroleum reserves with a combined capacity of 6.5 million tonnes:
    • Chandikhol, Odisha — 4 million tonnes
    • Padur, Karnataka (expansion) — 2.5 million tonnes
  • Further proposals exist for reserves at Bikaner (Rajasthan) and Rajkot (Gujarat), which would add another 6 million tonnes to India's total SPR capacity.
  • However, decisions on these are yet to be taken.
• Key Gaps and Concerns
  • Current reserves cover only ~9.5 days of crude needs — far below the 90-day benchmark recommended for IEA members.
  • Reserves are presently at only 64% capacity (3.37 million tonnes out of 5.33 million tonnes).
  • Planned expansion projects remain incomplete or undecided, leaving India exposed during prolonged supply disruptions like the current West Asia conflict.

India's Oil Stockpiles: Where We Stand and Why It Matters?

• India is the world's third-largest consumer of crude oil.
• Over 88% of its crude oil requirement is met through imports.
• This high import dependency makes India acutely vulnerable to global supply disruptions.
• The IEA Benchmark: How Does India Compare
  • The IEA (International Energy Agency) recommends that countries maintain oil stocks equivalent to at least 90 days of net oil imports.
  • This includes both strategic reserves and commercial inventories held by refiners.
  • India is an Associate Member of the IEA (not a full member), so it is not legally obligated to meet this benchmark.
  • India's current total national storage capacity — including commercial stocks with refiners — stands at 74 days, still short of the 90-day IEA standard.
• Why India Urgently Needs to Expand Its SPRs?
  • The ongoing West Asia conflict has effectively closed the Strait of Hormuz, a critical maritime chokepoint.
  • Experts argue that expanding dedicated strategic reserves is long overdue, given:
    • India's massive and growing consumption levels.
    • Its over 88% import dependency.
    • The risk of extended supply disruptions from geopolitical conflicts like the current West Asia war.
  • The current SPR covers only ~9.5 days of crude needs — a dangerously thin buffer.
• The Commercial Case for Expanding SPRs
  • Beyond energy security, there is a strong commercial rationale for building more storage capacity:
    • Market leverage — Even limited additional storage would allow ISPRL to release inventory when prices surge and recharge reserves when prices are low, making it a serious player in international oil markets.
    • Leasing to foreign refiners — Storage can be leased to West Asian refiners, who benefit from reduced freight costs when supplying to Southeast Asian markets.
• The ADNOC Example
  • In July 2021, the government approved the commercialisation of Phase-I SPRs.
  • Under this, an agreement was signed between ADNOC (Abu Dhabi National Oil Company, UAE) and ISPRL.
  • It allows ADNOC to use 7,50,000 tonnes of capacity at the Mangaluru SPR — a model that can be replicated to generate revenue while keeping reserves available for emergencies.