India is exploring the option of storing oil in Japan, South Korea, and Singapore to bolster its energy security. The decision will hinge on the accessibility and cost-effectiveness of these locations, with rental charges needing to be reasonable and not surpass transportation costs. This is not India’s first venture into storing oil abroad; in 2020, India and the US signed an agreement to explore strategic petroleum reserves, including the possibility of storing Indian oil in the US.
Sites in Japan, South Korea, and Singapore are under consideration, but their feasibility needs assessment. Additionally, reserves in the United Arab Emirates might be considered due to their strategic location. Currently, India has a crude storage capacity of 5.3 million tonnes across Visakhapatnam, Mangaluru, and Padur. New storage facilities are being constructed in Chandikhol and Padur, which will add another 6.5 million tonnes of capacity.
These reserves are utilized during supply disruptions or emergencies, such as wars or geopolitical crises. The Abu Dhabi National Oil Company (ADNOC) in the UAE has already stored crude in India’s facilities under the strategic petroleum reserves program. India aims to meet the International Energy Agency’s (IEA) requirement of maintaining oil stocks equivalent to 90 days of net imports. The IEA is in discussions with India about full membership following India’s application submitted in October 2023.
Read More: India Plans Oil Storage in Japan, South Korea and Singapore for Energy Boost