India Eyes Oil Storage in Japan, South Korea, Singapore to Boost Energy Security

India’s Plan for Oil Storage Abroad

India is considering storing oil in Japan, South Korea, and Singapore to ensure energy security. The decision will depend on how accessible and cost-effective these locations are. Renting charges must be reasonable and not exceed transportation costs.

Previous Initiatives

This isn’t the first time India has looked into storing oil outside the country. In 2020, India and the US signed an agreement to explore strategic petroleum reserves, discussing the possibility of storing Indian oil in the US.

Potential Locations

Sites in Japan, South Korea, and Singapore are being considered, but their viability needs to be evaluated. Additionally, reserves in the United Arab Emirates might be considered due to their strategic location.

Current Storage Capacity

India currently has a crude storage capacity of 5.3 million tonnes across Visakhapatnam, Mangaluru, and Padur. New storage facilities are being built in Chandikhol and Padur, adding 6.5 million tonnes of capacity.

Strategic Petroleum Reserves

These reserves are used during supply disruptions or emergencies, like wars or geopolitical crises. The UAE’s Abu Dhabi National Oil Company has already stored crude in India’s facilities as part of the strategic petroleum reserves program.

International Energy Agency (IEA) Compliance

India aims to meet the IEA’s requirement of having oil stocks equivalent to 90 days of net imports. The IEA is in talks with India about full membership, and India’s request for full membership was sent in October 2023.

Current Storage Levels

India’s strategic reserves provide for about 9.5 days of crude oil. Combined with oil marketing companies’ storage, the total national capacity covers 74 days. The government is exploring various options to increase storage capacity, including public-private partnerships.