- India strategic petroleum reserve capacity is set to grow by 1.75 million tons (12.8 million barrels) under a new ONGC-led project
- Current national reserve stands at 5.33 million tons across three sites, covering only eight days of demand
- New Delhi mandated the project last month at an estimated cost of $1.6 billion
- ONGC is seeking government approval to trade the reserve commercially, not just hold it for emergencies
- Two further sites are planned, adding a combined 6.5 million tons of capacity
- India and the UAE are discussing expanded cross-border crude storage, including at Fujairah
India’s strategic petroleum reserve is set to grow by 1.75 million tons, or 12.8 million barrels, under a new plan from state-owned Oil and Natural Gas Corp (ONGC), Reuters reported. The company will also ask the Indian government for permission to commercially trade the stockpile once built, a departure from the strictly emergency-use model that has defined the programme to date.
The addition would mark the single largest expansion of India’s national crude reserve since the current three-site system was established. New Delhi asked ONGC to build and fill the facility last month at an estimated cost of $1.6 billion, following an energy supply crunch that drove fuel price hikes and inflation across the world’s third-largest oil importer.
India Strategic Petroleum Reserve Capacity: What Exists Today
India currently holds 5.33 million tons of crude in reserve, equal to roughly 39 million barrels, spread across three underground sites in the south of the country. The facilities are managed by Indian Strategic Petroleum Reserves Ltd, a government-owned entity.
At maximum capacity, the existing network covers only eight days of national oil demand, well short of the 90-day buffer recommended for major importers by the International Energy Agency. The ONGC facility is one of three now planned. New Delhi has also outlined a 4-million-ton site, equal to 29 million barrels, and a 2.5-million-ton site, or about 18.3 million barrels.
Why India Is Accelerating Strategic Storage Now
India’s oil demand growth has recently outpaced China’s, tightening pressure on a reserve system that was already thin by international standards. The ongoing Middle East conflict has exposed that gap directly, disrupting supply routes and pushing New Delhi to treat storage expansion as an immediate priority rather than a long-term planning exercise.
Allowing commercial use of the ONGC reserve would be a structural shift. A stockpile that can be traded, not just held for emergencies, gives India more flexibility to manage price volatility and gives operators a domestic outlet for storage economics that most of the world’s largest strategic petroleum reserves do not offer.
The Foreign Storage Angle: UAE and Fujairah
India is also positioning itself to host foreign-owned crude inventory. During a recent visit by Prime Minister Modi to the UAE, the UAE’s national oil company indicated plans to raise the volume of crude it stores in India to 30 million barrels, adding to activity at India’s domestic tank storage sites.
The reverse flow is also under discussion. ADNOC could increase the amount of Indian crude it stores at the port of Fujairah, which sits outside the Strait of Hormuz and has become a preferred hedge location for Gulf and Asian buyers during periods of regional tension.
India Strategic Petroleum Reserve: What Comes Next
ONGC’s request to commercialise the reserve will need government sign-off before construction timelines are confirmed. The scale of India’s strategic petroleum reserve build-out, three new sites totalling roughly 8.25 million tons, signals that storage capacity has moved from a policy afterthought to a core plank of India’s energy security strategy heading into 2027.
How large is India’s planned strategic petroleum reserve expansion?
ONGC’s proposed site would add 1.75 million tons, or 12.8 million barrels, to India’s national crude reserve. Combined with two further planned facilities, total new capacity under discussion exceeds 8 million tons.
How much strategic oil storage does India currently have?
India holds 5.33 million tons of crude, around 39 million barrels, across three underground sites in southern India, managed by Indian Strategic Petroleum Reserves Ltd.
Why is India expanding its strategic petroleum reserve?
India’s oil demand growth has recently exceeded China’s, while its existing reserve covers only a fraction of the buffer held by other major importers. Regional supply disruptions have accelerated the case for additional capacity.
Will India’s strategic petroleum reserve be used commercially?
ONGC has asked the Indian government for permission to trade the new reserve commercially, rather than restricting it to emergency use only, a request that would require regulatory approval.
Does India store oil for other countries?
Yes. The UAE’s national oil company has signalled plans to expand the volume of crude it stores within India, part of a broader pattern of Gulf producers seeking storage capacity outside the Strait of Hormuz.