India eyes cheap oil to refill strategic reserves amid geopolitical turmoil

With Brent crude falling to multi-year lows, New Delhi is mulling replenishing its strategic oil stockpiles. Tensions with Pakistan and global demand uncertainty have also added fresh urgency to India’s energy security push.

- S VENKAT NARAYAN

India plans to take advantage of a drop in global crude oil prices to refill its strategic petroleum reserves (SPR), two people aware of the matter said. The move comes amid renewed geopolitical risks and a fresh budgetary push to bolster the country’s energy security infrastructure.

India's existing SPR capacity stands at 5.3 million tonnes, enough to meet just 9.5 days of the country's crude oil needs. But as of October 2024, only 3.6 million tonnes were stored in the underground caverns, leaving a significant gap.

Officials said the government is now looking to replenish the reserves, with Brent crude trading near a four-year low of around $65 per barrel.

"This is the right time to fill the reserves, as crude prices have softened considerably. It would result in significant savings for the exchequer," said one of the two people cited above.

The government is also working to fast-track procurement, the second person said.

Indian Strategic Petroleum Reserves Ltd (ISPRL), a government-owned entity, manages crude procurement and storage based on decisions by an empowered government committee. While state-run oil companies may assist occasionally, ISPRL largely handles purchases directly.