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India Expands Oil Storage Amid Supply Disruption Fears

Created at 4 Aug · 12:16 PM1 source↑ Market-relevant
IN SHORT

India's Oil and Natural Gas Corporation will build a new 13 million barrel oil storage site in Mangaluru to bolster resilience against supply shocks, particularly following disruptions from the Middle East and increased reliance on Russian crude.

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Key Numbers

13 million barrelsnew oil storage capacity
1.75 million metric tonsnew oil storage capacity
8 daysIndia's current oil reserve coverage
5.33 million metric tonsIndia's current strategic reserve capacity
$1.6 billionestimated investment for new strategic reserves

Who's Involved

Oil and Natural Gas Corporation (ONGC)
State-owned explorer building new oil storage site
Suresh Gopi
Indian Minister of State for Petroleum and Natural Gas
India Expands Oil Storage Amid Supply Disruption Fears

↳ Why This Matters

India's expansion of oil storage is crucial for its energy security as a major importer, aiming to mitigate the impact of geopolitical events and supply chain disruptions on its economy.

Key facts

  • India's Oil and Natural Gas Corporation (ONGC) plans to construct a new oil storage facility in Mangaluru, Karnataka.
  • The facility will have a capacity of approximately 13 million barrels (1.75 million metric tons) of crude oil.
  • Half of the new storage capacity will be designated for strategic reserves, and the other half for ONGC's commercial operations.
  • The project will be funded by ONGC.
  • India's current strategic petroleum reserve capacity is 5.33 million metric tons, equivalent to about eight days of national oil consumption.

    • India is expanding its oil storage capacity by building a new facility in Mangaluru, aiming to enhance its resilience against supply disruptions. The state-owned Oil and Natural Gas Corporation (ONGC) will construct the site, capable of holding approximately 13 million barrels of crude oil. This move comes in response to the impact of Middle Eastern supply issues and increased reliance on Russian imports.

    According to Suresh Gopi, India's Minister of State for Petroleum and Natural Gas, half of the new storage capacity will be allocated for strategic reserves, while the other half will support ONGC's commercial activities. The project will be funded by ONGC. Currently, India's strategic petroleum reserves can only cover about eight days of national oil demand, highlighting the need for increased storage.

    Reports from June indicated that the Indian government had asked ONGC to build a new strategic petroleum reserve site with an estimated investment of $1.6 billion, following a crisis in the Middle East.

    Frequently asked questions

    India is increasing its oil storage capacity to improve resilience against supply shocks, particularly following disruptions in the Middle East and increased reliance on Russian crude imports.

    The new storage site will be built in Mangaluru, in the southwestern state of Karnataka.

    The facility is planned to hold approximately 13 million barrels of crude oil, equivalent to 1.75 million metric tons.

    India's current strategic petroleum reserve storage has a total capacity of 5.33 million metric tons, which is equivalent to about eight days of national oil consumption.

    What Happens Next

    01ONGC will fund the construction of the new storage site.
    02The new storage site will hold 1.75 million metric tons of oil.

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    How It Developed

    India's state-owned ONGC will build a new storage site in Mangaluru.
    The new site will hold approximately 13 million barrels of oil.
    Half of the capacity will be for strategic reserves, the other half for commercial operations.
    The project will be funded by ONGC.
    India's current strategic reserves cover only eight days of national oil demand.

    Sources

    T1
    India Expands Oil Storage Sites After Shock Supply DisruptionOilPrice.com

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