India to Bolster Oil Reserves and Storage Amid Price Fluctuations
India is set to boost its oil inventories and storage capacities, aiming to guard against future market fluctuations similar to those experienced during the Iran war.
Oil Minister Hardeep Singh Puri, speaking in New Delhi, reassured reporters that while he isn’t overly concerned about potential spikes in oil prices, preparation is essential.
Currently, crude prices have dropped significantly, undoing the previous gains linked to the conflict, following a recent easing of tensions in the region. This decline may prompt countries to refill their strategic reserves, which were depleted during the initial supply shocks from the war.
Though India depends heavily on the Middle East for its oil and gas needs, Puri noted that the country was able to manage recent challenges due to a diverse supply chain and strong diplomatic relations with oil-producing nations. The Indian government has also worked to prevent sharp increases in retail fuel prices, resulting in notable losses for state-run refiners amounting to approximately 7.8 billion dollars during the last quarter.
In a move to enhance domestic fuel supplies, Prime Minister Narendra Modi is set to inaugurate a new refinery in Rajasthan this Saturday. This facility, with a capacity of 180,000 barrels per day, is expected to increase India’s oil imports by 150,000 barrels daily.
Looking forward, India’s refining capacity is projected to grow by about 20%, reaching 6.2 million barrels per day by 2030. This expansion aims to position India as a significant player in the global refining landscape.
Puri highlighted the importance of refining capabilities, noting that unlike the U.S., which has not opened a new greenfield refinery in five decades, India is stepping up to fill that gap in the market. As global hydrocarbon trade evolves, countries with refining capacity will play a crucial role in shaping market dynamics.
