**India to Expand Strategic Oil Reserves Amid Energy Security Concerns**
India has announced plans to significantly enhance its strategic petroleum reserves (SPR) by directing the state-backed Oil and Natural Gas Corporation (ONGC) to construct and fill a new facility. This initiative aims to bolster the country's reserve capacity by one-third, reflecting New Delhi's growing emphasis on energy security in light of recent geopolitical tensions in the Middle East.
The new facility, set to be located in Mangaluru, a southern port city, will have a capacity of 1.75 million metric tons (MMT). This expansion will increase India’s existing emergency reserve capacity from 5.33 MMT to approximately 7.08 MMT. The estimated investment required for this project is around $1.6 billion, with $602 million allocated for construction and $1.2 billion earmarked for filling the facility with crude oil, based on current market prices.
This directive marks a significant shift, as it is reportedly the first time the Indian government has tasked a state-owned oil company with developing an SPR facility. However, details regarding how ONGC will recoup its costs remain unclear.
India's current strategic reserves consist of three existing facilities located in the southern states of Andhra Pradesh and Karnataka. These facilities are managed by Indian Strategic Petroleum Reserves Ltd, a government-backed entity. The government had previously approved a phase 2 plan to add an additional 6.5 MMT to the country's strategic reserves.
The urgency behind this expansion is underscored by India's daily oil consumption, which stands at approximately five million barrels. In comparison, India's strategic reserve capacity of about 39 million barrels appears modest when juxtaposed with the reserves held by other major economies. As of the end of 2025, India had only 21 million barrels of strategic crude stocks, highlighting the need for enhanced reserves to mitigate potential supply disruptions.
For context, the United States maintains a Strategic Petroleum Reserve with a total storage capacity of 714 million barrels, although it has been actively releasing oil to stabilize prices amid ongoing conflicts, including the US-Israeli tensions with Iran. Currently, the US holds about 340 million barrels, which equates to roughly 84 days of supply. Similarly, China has over 220 million barrels in its reserves, sufficient for approximately 60 days, while Japan's reserves stand at 324 million barrels, capable of lasting around 230 days.
As India moves forward with this strategic initiative, it aims to strengthen its energy security framework and reduce vulnerability to global oil market fluctuations, particularly in the context of rising geopolitical tensions that have historically impacted oil supply chains.