India has approved a plan to expand its strategic petroleum reserves by 1.75 million metric tonnes, a move designed to bolster energy security amid ongoing disruptions in the Strait of Hormuz.
The expansion, which will add new storage capacity in Mangaluru, underscores New Delhi’s determination to insulate its economy from global oil supply shocks triggered by geopolitical tensions in the Gulf.
The decision comes as India’s strategic crude oil reserves have already rebounded to near-full capacity, reaching 104 million barrels by the end of June, according to data from analytics firm Kpler.
This restoration of stockpiles suggests that India has been actively buying during periods of lower volatility, positioning itself to withstand potential supply interruptions.
The expansion aligns with broader concerns over global oil supplies as shipping risks in the Strait of Hormuz remain elevated.
Recent diplomatic talks between the US and Iran have stalled, keeping a risk premium on energy markets.
The new storage infrastructure will provide additional buffer capacity, reducing the immediate need for spot market purchases during acute disruptions.
For traders, the move signals continued structural demand for crude storage and potentially higher import volumes in the medium term as India fills its expanded reserves.