The Strategic Petroleum Reserve (SPR) is a national concept and institution of dedicated crude oil stockpiles, distinct from commercial inventories, maintained by a government to ensure Energy Security during sudden supply disruptions or geopolitical crises. The global idea for the SPR emerged after the 1973-1974 oil embargo by Arab nations, which caused severe economic shockwaves and price spikes. The reserve was created to mitigate future supply interruptions and prevent oil from being used as a political weapon.
In India, the SPR program was proposed in 1998, and the implementing body, Indian Strategic Petroleum Reserves Limited (ISPRL), a wholly-owned subsidiary of the Oil Industry Development Board (OIDB) under the Ministry of Petroleum and Natural Gas, was incorporated on June 16, 2004. The mechanism involves storing crude oil in highly secure, specialized underground rock caverns near the coast.
The current Phase I capacity is 5.33 million metric tonnes (MMT), spread across three locations: Visakhapatnam (Andhra Pradesh), Mangaluru (Karnataka), and Padur (Karnataka). This capacity provides approximately 9.5 days of India's crude oil requirements. The SPR connects to the International Energy Agency (IEA), which mandates that its member countries maintain emergency oil stocks equal to at least 90 days of net oil imports.
The SPR has changed recently with the government approving the commercialisation of Phase-I SPRs in July 2021. Furthermore, the government is expanding the network under Phase II with new facilities planned at Chandikhol (Odisha) and an expansion at Padur (Karnataka). A key recent development is the agreement with the United Arab Emirates (UAE) to store up to 30 million barrels of crude oil in India's SPR, which strengthens the emergency buffer without immediate capital expenditure by India.