Oil and Natural Gas Corporation (ONGC) has approved the expansion of India’s strategic petroleum reserve (SPR) by adding a 1.75 million metric tonne (MMT) underground crude oil storage facility in Mangaluru, Karnataka. The decision follows supply disruptions and energy security concerns exposed during the recent Iran conflict, underscoring India’s efforts to strengthen its emergency crude oil reserves against future geopolitical shocks.

The project will increase India’s strategic crude storage capacity and reinforce the country’s ability to withstand supply disruptions, particularly given its heavy reliance on imported oil. However, ONGC has not yet disclosed the project’s cost or completion timeline.

ONGC Approves Strategic Oil Reserve Expansion

ONGC’s board has approved the construction of a 1.75 MMT strategic petroleum reserve at Mangaluru.

The project will:

  • Expand India’s emergency crude oil storage.
  • Strengthen national energy security.
  • Improve preparedness for supply disruptions.
  • Support long-term energy resilience.
  • Complement existing strategic reserves.
  • Enhance crude oil stockpiling capacity.

Iran Conflict Highlighted Energy Risks

The recent Iran war exposed vulnerabilities in global oil supply chains, particularly for countries dependent on crude imports.

Key concerns included:

  • Potential disruptions through the Strait of Hormuz.
  • Increased crude oil prices.
  • Shipping uncertainties.
  • Supply chain volatility.
  • Higher import costs.
  • Geopolitical risks to energy security.

The latest expansion is intended to reduce India’s exposure to similar disruptions in the future.

India’s Strategic Petroleum Reserve Network

The new Mangaluru facility will be managed under India’s strategic petroleum reserve program.

Currently, India has:

  • 5.33 MMT of operational strategic crude storage.
  • Underground caverns on both the eastern and western coasts.
  • Two additional reserve sites under development, adding 6.5 MMT of capacity.

The ONGC project will further expand the country’s emergency oil storage infrastructure.

Why Strategic Oil Reserves Matter

Strategic petroleum reserves help governments manage unexpected supply disruptions and stabilize domestic energy markets.

Key benefits include:

  • Enhanced energy security.
  • Emergency crude availability.
  • Reduced supply shock risks.
  • Greater price stability.
  • Improved national preparedness.
  • Stronger resilience during geopolitical crises.

Countries worldwide are increasing strategic oil stockpiles following recent geopolitical conflicts and supply disruptions.

What Investors Will Watch

Market participants will closely monitor:

  • Project execution timeline.
  • Capital expenditure details.
  • Government policy support.
  • Crude oil price trends.
  • India’s import dependency.
  • Future strategic reserve expansion plans.

The project is expected to play a key role in strengthening India’s long-term energy infrastructure.

Outlook

ONGC’s approval of a 1.75 MMT strategic petroleum reserve expansion at Mangaluru marks an important step in enhancing India’s energy security following lessons from the Iran conflict. As geopolitical uncertainties continue to influence global energy markets, expanding strategic crude reserves will help improve India’s resilience against future supply disruptions while supporting stable energy availability for the country’s growing economy.

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