InvestorQ : Why is India not buying up oil and storing at low prices like China has been doing?
Crowny Pinto made post

Why is India not buying up oil and storing at low prices like China has been doing?

Answer
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5 months ago


India has been certainly buying and storing oil. In fact, in the last few months when the refining demand has been low, India has been storing crude. The only catch is that India may be running out of storage space. Therefore, India may now look to store some low priced US oil in the US itself. You are right that low prices of crude have spurred many countries to accumulate strategic petroleum reserves at lower levels. However, storage space is a big constraint. While oil prices have doubled from the recent lows, it is still nearly 60% down since the beginning of the year. India currently has storage capacity of 5.33 MT and an additional 9 MT is parked in ships in the high seas. Stored oil is already 20% of India’s annual oil needs so the situation is comfortable. India plans to expand the storage capacity to 6.5 MT soon. Till then, India will have to depend on external storage only.