Commodities
Market Chatter: India Weighs Strategic Crude, LNG, LPG Reserves After Hormuz Supply Shock
India is reportedly looking to create strategic reserves for crude oil, liquified petroleum gas and liquified natural gas, in order to avoid the repeat of the recent supply shock resulting from US-Iran war, Bloomberg said, citing people familiar with the matter.The country's oil ministry has reportedly set up a committee to study the details including potential locations, operating models, and what portion should be stored overground and underground.This comes after the world's most populous country and second largest importer of fossil fuels took a hard hit from the near-total closure for almost four months of the Strait of Hormuz, through which a large share of its supply usually passes.India's current strategic petroleum reserves have a total capacity of 5.33 million metric tonnes, which only covers 9.5 days of national crude oil demand, which is a far cry from China's 70 days that includes inventories held by refiners and retailers.LPG and LNG reserves, meanwhile, are almost non-existent, given the difficulty in storing the two commodities, relative to crude oil.According to Bloomberg's sources, India is now looking to double its capacity, with underground caverns planned across the East and West coasts to boost reserves to at least 120 million barrels.India's Ministry of Petroleum and Natural Gas did not immediately respond to' request for a comment on this story.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)