Strategic oil reserves unlikely to stir market

India's initial plan to build-up its strategic petroleum reserves (SPR) is not shaping out to be the dramatic event that some in the market had hoped could help reignite global oil demand.

Details:

• The entire initial SPR build-up in the world's third-biggest oil consumer could be handled by just a handful of Very Large Crude Carrier (VLCC) tankers.
• India initially plans to build up oil reserves of 5 million tonnes (almost 40 million barrels) at three locations - Visakhapatnam, Padur and Mangalore - equivalent to almost 10 days of its average daily imports of 4 million bpd.

India’s demand:

Building up India's initial crude storage requirements equates to 220,000 barrels a day (bpd) of tanker demand.