India’s Strategic Petroleum Reserves (SPRs), managed by ISPRL, currently hold 5.33 MMT capacity—covering only 9–10 days of crude consumption. With 90% import reliance and heavy dependence on Gulf supplies, India remains vulnerable to disruptions near the Strait of Hormuz. Comparisons with the US, China, and Japan highlight India’s shortfall against IEA’s 90-day stock requirement. Expansion plans include Chandikhol (Odisha), Padur (Karnataka), and partnerships with ADNOC, potentially raising reserves to 68 million barrels. Despite financial and institutional challenges, India is accelerating SPR development to safeguard energy security amidst West Asian instability.
The concept of dedicated strategic reserves was first mooted in 1973 in the US after the first oil crisis. Western strategic reserves have been tapped during the First Gulf War (1991), Hurricane Katrina (2005), and in 2022 after global oil prices surged in the wake of Russia-Ukraine war. With the current crisis which is underway in Iran and West Asia, the issue of petroleum reserve has again come to the limelight compelling each nations including India to re-visits its policies on strategic oil reserve.
Why India needs a robust Strategic Petroleum Reserve (SPR)?
India’s strategic Petroleum Reserves (SPRs) have a capacity of 5.33 MMT (million metric tonnes), covering about 9.5 days of crude oil supply. SPRs are government maintained stockpiles of crude oil, managed by ISPRL under the Ministry of Petroleum and Natural Gas, stored in underground rock caverns. India’s SPRs are about two-thirds full 64% which may last for about 5 days. India faces increasing vulnerability due to disruptions near the Strait of Hormuz.
India imports a significant amount of its crude oil and natural gas from the Gulf countries. India is the world’s third-largest oil consumer and importer, but its revenues are small compared with those of the US and China. India imports 88% of its crude needs and depends on Gulf countries for about 40% of imports. India also depends upon the Gulf countries for 90% of its LPG imports and 60% of its natural gas. Near closure of the Strait of Hormuz has exposed India’s energy vulnerability, with supplies of crude, natural gas and LPG tightening with impact on India’s burgeoning economy.
Comparison with USA, China, and Japan
The US SPR held 413 million barrels at the end of 2025 and about 450 million barrels as of early May 2026. Chinese government held inventories averaged about 360 million barrels in December 2025 while about 1 billion was held by national oil companies. China added an average of 1.1 million barrels per day of oil to its strategic inventories in 2025, which nearly reached 1.4 billion barrels as of December 2025.
Preliminary government data indicates China continued to build inventories in 2026 prior to the Iran crisis. The largest three largest inventories were held by China, the US, and Japan. Japan holds the third-largest strategic oil inventories, at about 263 million barrels in government held inventories as of December 2025.Japan requires industry to hold 70 days of demand, or about 220 million barrels, in addition to the 90-day strategic reserve overseen by the government.
SPR are huge stockpiles of crude oil to deal with any crude oil-related crisis and contingencies like the risk of supply disruption from natural disasters, war, or other calamities. According to the agreement under International Energy Program (IEP) , each International Energy Agency (IEA) member country has an obligation to hold energy stocks equivalent to at least 90 days of net oil imports. In case of severe supply disruption, IEA members may decide to release these stocks to the market as part of a collective action. India became an associate member of the IEA in 2017.
India’s current status of Strategic Petroleum Reserve
The construction of the Strategic Crude Oil Storage facilities in India is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL). ISPRL is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the Ministry of Petroleum and Natural Gas. The 53 lakh (5.3 million) million metric tonnes, is the capacity of India’s three underground rock caverns, built over a decade under Phase I of the SPR programme. Vishakhapatnam holds up to 1.33 MMT, Mangalore 1.5 MMT, Padur, 2.5 MMT.
Currently, as per the statement of Minister of State of Petroleum, Suresh Gopi, in parliament in March 2026, the three facilities hold about 3.37 MMT of crude oil that is 64% full. As per India’s consumption trend, roughly 5.7 to 6 million barrels are used a day, per OPEC’s own 2026 projections which works out to be about 9 to 10 days. India’s 3 oil making companies- IOC, BPCL, HPCL, carry their own commercial inventories, which add around 64.5 days of crude stockpile. Combined with those with the SPR, the official line is that India has 60 to 74 days of oil stocks whereas in Japan it is 200 days and in USA about 600 plus days at the same level.
India’s Future Plans
Strategic Collaborative Agreement between the Indian Strategic Petroleum Reserves Limited (ISPRL) and Abu Dhabi National Oil Company (ADNOC) that was signed during PM Modi’s visit to the UAE on 15 May 2026, has paved the way for much-needed cushion to India’s energy requirement. With ADNOC’s proposed participation, the combined reserve capacity linked to the India-UAE partnership could rise to 68 million barrels, a significant leap from 38 million barrels of crude oil that are currently at India’s disposal from the three sites at Vishakhapatnam, Mangalore, and Padur.
Also, as part of India-UAE MoU, agreement has been reached for potential storage of crude oil in Fujirah, UAE, for potential use by the Indian Strategic Petroleum Reserve and potential collection in Liquid Natural Gas and Liquid Petroleum Gas Storage facilities. With UAE storing 30 million barrels of crude in India’s strategic reserves, India will have assured access to a major emergency crude buffer bucket without bearing the cost of purchasing the oil. Amidst growing geopolitical unpredictability and volatile global oil markets, these measures will act as a back-up system and safeguard from wars, geopolitical tumult, natural disasters, severe market volatility.
A new underground storage facility is being planned at Chandikhol, Odisha, at a cost of Rs.8,743/- crores. This was approved by the Union Cabinet on 17 June 2018 with an aim to create 4 million metric tonne (MMT) underground storage facility. The reason it was stalled for 8 years was due to land acquisition and statutory clearance hurdles. On 8 April 2026, a tripartite agreement was signed in Delhi between Industrial Promotion and Investment Corporation of Odisha Limited (IPICOL), and Indian Strategic Petroleum Reserves Limited (ISPRL).
Chandikhol is chosen as it is strategically located near coastal areas amidst giant underground rocks, caverns carved deep beneath the earth, principle of hydrostatic containment, natural disasters, surface attacks or evaporation issues. Apart from Chandikhol in Odisha, the Padur facility in Karnataka with a storage capacity of 2.5 MMT is being upgraded as part of public-private partnership model. Also, as part of diversification package, due to high risk in West Asia, India is actively diversifying increased procurement from the western hemisphere and reliance on Russian crude for maintain supply security.
All in all, as of May 2026, India is accelerating its Strategic Petroleum Reserves (SPR) expansion to enhance energy security amidst West Asian disruptions. With 90% import reliance, India is focusing on adding 6.5 million tonnes of capacity in Odisha and Karnataka to complement the existing 5.33 MMT which has only 8-10 days consumption.
ISPRL is also exploring additional storage facilities in Bikaner, Rajasthan, the first such salt cavern-based reserve with a proposed capacity of 5 MML. Additionally, another reserve is being explored at Bina, M.P. If all the above projects are completed, approximately 35.6 additional days of reserves may be made available to Government of India.
Challenges and way ahead
Challenges are basically two-fold. One is financial, as the operation and maintenance costs for the three existing facilities was 153 crores in FY 2023-24 and Rs.100 crore in FY 2024-25. Institutional challenges include issues related to land acquisition, underutilisation of dedicated funds over the years, environmental approvals, funding constraints, lack of coordination between central and state governments.
On a positive note, the Union government is proactively committed to safeguard energy security and consumers’ interests. The government is also committed to keep the country away from sudden supply shocks and disruptions and is in sync with IEA (International Energy Agency) directions for keeping an assured reserve oil stocks equivalent to at least 90 days.
India’s energy security hinges on building resilient buffers against geopolitical volatility and supply shocks. While current reserves provide only limited cover, the expansion of underground caverns, partnerships with ADNOC, and diversification of crude sources mark a decisive step forward. Yet, financial constraints, land acquisition hurdles, and coordination gaps remain pressing challenges. Reinforcing the Strategic Petroleum Reserve is not merely a technical exercise but a strategic imperative—one that will determine India’s ability to withstand crises and sustain economic growth in an increasingly uncertain global energy landscape.
Prof. Dr. Mohammed Badrul Alam is Formerly, Director of Research; Professor and Head, Department of Political Science, Faculty of Social Sciences, Retd; Jamia Millia Islamia University, New Delhi. The views expressed here are his own.
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