India's Strategic Petroleum Reserves (SPR)

Strategic Petroleum Reserves (SPR) are large emergency stores of crude oil kept by the government. They are used only when normal oil supply is disrupted, for example by war, sanctions or a blocked shipping route. India stores this oil in huge underground rock caverns near its coast. You can think of the SPR as the country's emergency grain store, but for oil.

Why does India need it?

India imports more than 85% of the crude oil it uses. Much of it comes by sea from West Asia and Russia. If supply is cut suddenly, refineries could run short, and petrol, diesel and cooking gas prices could jump. A strategic reserve gives the country time to find other suppliers and avoid panic.

Where did it come from?

The 1990 to 91 Gulf War sent oil prices up and helped push India into its 1991 balance of payments crisis. At that time, India's foreign exchange reserves could pay for only about three weeks of imports. The idea of a strategic reserve was taken up in the late 1990s. Indian Strategic Petroleum Reserves Limited (ISPRL) was set up on 16 June 2004 to build and run the reserves.

It is a wholly owned subsidiary of the Oil Industry Development Board (OIDB), under the Ministry of Petroleum and Natural Gas.

The key facts: Phase I

Phase I built three underground storages with a total capacity of 5.33 million metric tonnes (MMT), about 36.9 million barrels:

• Visakhapatnam (Andhra Pradesh): 1.33 MMT
• Mangaluru (Karnataka): 1.5 MMT
• Padur (Udupi district, Karnataka): 2.5 MMT

All three were dedicated to the nation in February 2019. When full, Phase I covers about 9.5 days of India's crude oil needs. Indian oil companies also keep their own stocks in refineries and tanks. Together, the total cover is often quoted at about 74 days (about 64.5 days held by refiners plus the SPR) [Unverified: the exact current figure].

Phase II

In June 2018, the Union Cabinet approved 6.5 MMT more capacity at two places: Chandikhol (Odisha), 4 MMT and a Padur expansion, 2.5 MMT. These are planned under a Public-Private Partnership (PPP) model, where private or foreign partners help build and fill the storage.

How does it work?

Oil is pumped into man-made caverns deep in hard rock. Rock caverns are cheaper and safer than steel tanks for storing very large amounts. The government can release the oil to refiners during a crisis. Some space is also leased to foreign oil companies. For example, in 2017 ADNOC (the Abu Dhabi National Oil Company) agreed to store about 5.86 million barrels of its crude at Mangaluru.

ADNOC can sell this oil commercially, but in an emergency India has the first right to buy it. When crude prices crashed in 2020, India used the chance to fill its reserves cheaply.

India and the IEA

The International Energy Agency (IEA), set up in 1974 after the 1973 oil crisis, requires its full members to keep oil stocks equal to at least 90 days of their net oil imports. India is not a full member; it became an association country of the IEA in March 2017. So the 90-day rule is not binding on India, but it is used as a benchmark.

As of early 2026, India's SPR was reported to be about two-thirds full, and its capacity is far below that 90-day benchmark.

Commonly confused concepts

• Strategic reserves vs commercial stocks: Strategic reserves are owned or controlled by the government for emergencies. Commercial stocks are the working stocks that oil companies keep for normal business.
• SPR days of cover vs total days of cover: The SPR alone covers about 9.5 days; the larger "74 days" figure includes stocks held by refiners.
• Crude oil reserves vs strategic reserves: "Proven oil reserves" means oil still under the ground in oil fields. Strategic reserves are oil already produced, bought and stored.

Issues, criticism and the way forward

• Small size: India's SPR is small compared with China, Japan or the US.
• Slow Phase II: Finding PPP partners and funding has taken time.
• Cost: Buying and storing oil locks up a lot of money.
• Energy security is more than stock: As the CEA pointed out, availability, freight and insurance costs matter too, not only price.
• Way forward: Complete Phase II, add more sites, sign more storage deals with oil-producing countries, spread oil imports across many suppliers, and reduce oil dependence through renewables, electric vehicles and biofuels.

Concepts to Know

• Million metric tonnes (MMT): A unit of weight. One MMT is 10 lakh tonnes. For crude oil, 1 MMT is roughly 7.3 million barrels.
• Balance of payments crisis: When a country does not have enough foreign currency to pay for its imports and foreign debts.
• Public-Private Partnership (PPP): A project where the government and private companies share the cost, work and risk.
• Freight and insurance costs: The cost of shipping oil by tanker and of insuring the cargo. These rise sharply when sea routes become risky.