By 2029–2030, India intends to construct its first strategically located petroleum reserve (SPR) that will be privately managed and allow the operator to freely trade the whole stockpile of oil. Enabling a fully commercial SPR is similar to the approach taken by nations like South Korea and Japan, which permit private lessees—mostly oil majors—to exchange crude.
India's three operational SPRs in southern India, which have a total capacity of 36.7 million barrels, have only been partially allowed to go commercial to yet.
India intends to construct two further SPRs, an 18.3-million-barrel cavern in Padur, southern Karnataka state, and a 29.3 million barrel SPR in eastern Odisha state, both of which will be open to private partners who are permitted to trade all of the oil produced locally.
In the event that there is a scarcity, the government will have first claim to the oil. India, the third-largest importer and consumer of oil in the world, is eager to increase its SPR capacity in order to protect itself from disruptions in global supply and price hikes. Increasing India’s oil storage capacity will also facilitate its membership in the International Energy Agency (IEA), a body whose members must be able to store at least 90 days’ worth of oil consumption.