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India Grants Adnoc Permission to Export Oil from Strategic Storage
The Indian government has granted Abu Dhabi National Oil Company (Adnoc) permission to export crude oil from its underground strategic storages in Mangalore, according to an order from the Ministry of Commerce and Industry. This decision aims to provide operational flexibility to Adnoc. Currently, crude oil exports are restricted to the state-owned Indian Oil Corporation (IOC). However, Adnoc's subsidiary, Adnoc Marketing International (India) RSC Limited India (AMI), has been exempted from these restrictions. AMI is permitted to re-export crude oil from its commercial stockpile at the Mangalore strategic petroleum reserve, at its own expense.
India, as the world's third-largest oil importer and consumer, relies on imports for over 85% of its oil needs. To safeguard against supply disruptions, the country has established strategic storages at three locations with a total capacity of up to 5.33 million tonnes. These facilities, located in Visakhapatnam, Mangalore, and Padur, can meet approximately 9 days of national oil demand.
Half of the 1.5 million tonne capacity at the Mangalore storage facility has been leased to Adnoc by the Indian Strategic Petroleum Reserve Ltd, while the remaining capacity is retained by ISPRL. Initially, foreign companies were allowed to lease storage for the purpose of selling oil to domestic refiners, with India retaining the first right on oil usage during emergencies.
Adnoc had requested permission to export oil from the Mangalore storage in cases where buyers couldn't be found among Indian refiners. Following the ministry's notification, Adnoc is now permitted to export oil from the Mangalore storage, providing it with additional flexibility in its operations. This move signifies a strategic adjustment in India's oil export policies, potentially opening up avenues for further collaboration with foreign oil companies.
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