India’s Strategic Petroleum Reserves

• About one-third of India’s Strategic Petroleum Reserves (SPR) are empty, raising concerns about energy security amid the West Asia conflict.
• Storage Capacity: India’s SPR system has a total capacity of 5.33 million tonnes of crude oil, stored in underground rock caverns.
• Current Status: Reserves are about 64% filled (~3.37 MMT), leaving nearly one-third of capacity unused.
• Coverage of Demand: At full capacity, the SPR can meet about 9.5 days of India’s crude oil requirement; at the current filling level, it covers only about 5 days.
• Oil Stock Position: Including commercial and other stocks, India currently has about 74 days of oil availability.

Strategic Petroleum Reserves (SPR)

• SPRs are government-maintained emergency crude oil reserves used during supply disruptions or crises.
• Purpose: They ensure energy security, stabilise prices, and act as a buffer against global oil shocks.
• Origin: Emerged after the 1973 OPEC oil embargo, highlighting vulnerability to supply shocks.
• Institutional Framework: Led to the formation of the International Energy Agency (IEA), promoting coordinated energy security measures.
• Global Norms: IEA recommends maintaining at least 90 days of net oil import reserves for members.
• Global Practice: USA, China, & Japan maintain large SPRs and use them during crises (wars, disasters).

Strategic & Economic Importance of SPR

• Energy Security: Provides a buffer against supply disruptions caused by wars, geopolitical tensions, or natural disasters.
• Price Stabilisation: Helps moderate fuel price volatility by releasing oil during sudden price spikes.
• Supply Continuity: Ensures uninterrupted availability of crude oil for sectors like industry & defence.
• Strategic Autonomy: Reduces dependence on external suppliers, enhancing national security.
• Market Advantage: Enables governments to buy crude at low prices and sell at high prices.

Challenges of Low SPR

• Inadequate Buffer: Low SPR limits India’s ability to handle prolonged disruptions, such as the West Asia conflict affecting oil supplies.
• Price Volatility: Reduce the ability to cushion global oil price shocks (i.e., Russia–Ukraine war 2022).
• Strategic Vulnerability: With ~88% crude import dependence, low SPR increases risk from chokepoints like the Strait of Hormuz.

Source (IE)