India has directed state-owned Oil and Natural Gas Corp (OTC: ONGCY) to construct a new strategic petroleum reserve facility in Mangaluru, expanding the country’s emergency crude storage capacity by roughly one-third.
The government’s decision follows a severe oil supply crisis triggered by the Iran war, which left India grappling with a soaring energy import bill and sharply rising domestic fuel prices.
The new storage site carries an estimated investment of $1.6 billion, according to the Economic Times, which cited sources with knowledge of the plans.
India currently holds a total strategic petroleum reserve capacity of 5.33 million metric tons of crude oil, equivalent to approximately 39 million barrels, or just eight days of national consumption.
That level of coverage sits well below the strategic reserves maintained by most other large oil-consuming nations, leaving New Delhi exposed to sudden and severe supply disruptions.
The country’s existing underground storage facilities are located in Vishakhapatnam in Andhra Pradesh, and in Mangaluru and Padur in Karnataka, with the new site also planned for Mangaluru.
The proposed new facility would carry a storage capacity of 1.75 million metric tons of crude oil, meaningfully expanding the country’s ability to weather future supply shocks.
It remains unclear whether the new site will be restricted to government strategic reserves or whether it could also serve as a commercial crude storage facility.
India has been working to expand its strategic oil storage infrastructure for years, driven by demand growth that has recently outpaced even China’s rate of expansion.
The current Middle East conflict appears to have accelerated those plans, with policymakers now treating enhanced petroleum reserves as a national security priority rather than a long-term ambition.
India consumes roughly 5 million barrels of oil per day, meaning its current reserves cover barely a week of supply, a figure that underscores just how urgently the country needs to build buffer capacity against global market volatility.
