Spurred by severe West Asian supply disruptions along the Strait of Hormuz, India’s top explorer plans an underground crude buffer while seeking commercial usage rights from New Delhi.
NEW DELHI — In a major move to fortify India’s energy defenses against volatile geopolitical flashpoints, the state-run Oil and Natural Gas Corporation (ONGC) has announced plans to build a new 1.75 million metric ton (MT) national Strategic Petroleum Reserve (SPR) in Mangalore, Karnataka.
Add businessleague.in as a Preferred Source
Also Read | Structural Rebalancing: How the HSBC India Flash PMI June 2026 Shapes Monetary Policy
The disclosure, made via an official late-evening stock exchange filing, comes as India—the world’s third-largest oil consumer and importer—actively reviews its vulnerability to maritime supply disruptions. The domestic energy landscape faced severe pressure earlier this year following significant blockades along the Strait of Hormuz, a critical trade artery through which roughly 20% of global energy supplies flow.
1. Expanding India’s Underground Oil Fortresses
The proposed ONGC facility will add significant capacity to India’s existing emergency crude architecture. New Delhi currently maintains 5.33 MT of underground strategic crude capacity across three primary southern locations managed by Indian Strategic Petroleum Reserves Ltd (ISPRL).
India's Strategic Petroleum Reserve (SPR) Expansion Map:
Existing: 5.33 MT (Mangalore, Padur, Vizag) ➔ Planned: +1.75 MT (ONGC Mangalore) + 4.0 MT (Chandikhol) + 2.5 MT (Padur Phase II)
To optimize financial viability, ONGC indicated it will seek permission from the Union Government to utilize the upcoming facility for commercial trade and storage alongside its primary “national interest” mandate. This matches the government’s current policy, which allows commercial leasing of portions of its existing underground caverns to foreign state oil corporations.
Also Read | Structural Rebalancing: How the HSBC India Flash PMI June 2026 Shapes Monetary Policy
Current and Projected Indian SPR Infrastructure
| Storage Facility Location | Operating Agency / Partner | Current/Planned Capacity | Operational Asset Status |
| Mangalore (Existing) | ISPRL / Leased by MRPL & ADNOC | 1.50 Million Metric Tons | Fully operational; halved between domestic refinery use and UAE storage. |
| Mangalore (Proposed) | ONGC (New Filing) | 1.75 Million Metric Tons | Planning phase; awaiting commercial usage clearances. |
| Padur & Vizag (Existing) | ISPRL | 3.83 Million Metric Tons (Combined) | Fully operational; commercialized in part. |
| Chandikhol (Planned) | ISPRL Phase II | 4.00 Million Metric Tons | Approved expansion blueprint in the eastern state of Odisha. |
| Padur Expansion (Planned) | ISPRL Phase II | 2.50 Million Metric Tons | Approved expansion blueprint in southern India. |
2. Geopolitical Alignment and the UAE-Japan Alliance
The strategic build-out aligns with India’s efforts to deepen defense and energy cooperation with steady bilateral allies, specifically Japan and the United Arab Emirates (UAE).
During Prime Minister Narendra Modi’s state visit to the UAE earlier this year, the Abu Dhabi National Oil Company (ADNOC) outlined a roadmap to significantly ramp up its crude reserves held on Indian soil to up to 30 million barrels. Under this agreement, the UAE is also assessing the logistical feasibility of building dedicated crude reserves at Fujairah specifically to feed Indian emergency pipelines during a maritime crisis.
Also Read | Structural Rebalancing: How the HSBC India Flash PMI June 2026 Shapes Monetary Policy
Tactical Synergy with Local Refining Footprints
The choice of Mangalore for the new SPR leverages existing downstream refining infrastructure to reduce capital costs.
As global energy transport lanes face growing risks from asymmetric regional drone and missile attacks, India’s push toward decentralized, commercially viable underground storage marks an essential shift from a reactive buyer to a insulated energy power.
Also Read | Structural Rebalancing: How the HSBC India Flash PMI June 2026 Shapes Monetary Policy
Add businessleague.in as a Preferred Source
🙏 Support Independent Journalism
We keep news free for you.
Most readers support with ₹500 ❤️
or scan QR below
Voluntary contribution. No tax benefits.
DISCLAIMER
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
