How many days minimum oil reserves should a country have?: Recently, India's Petroleum Minister said that the country has enough oil reserves to meet its needs for 74 days.
In a world where global conflicts, supply chain disruptions, and price shocks can decimate an entire economy overnight, oil reserves act as a national energy shield. Recently, India's Petroleum Minister Hardeep Singh Puri told the Rajya Sabha that India's strategic petroleum reserves can currently meet the country's energy needs for 74 days in the event of global turmoil.
What is the global standard for oil reserves?
The International Energy Agency sets the international benchmark. According to the Internal Energy Agency's rules, member countries are required to maintain oil reserves equivalent to at least 90 days of their previous year's net oil imports.
This 90-day rule is designed to ensure that a country's economy does not come to a standstill if oil supplies are disrupted due to war, natural disasters, sanctions, or geopolitical tensions. Countries like the United States, Japan, and Germany strictly adhere to this standard as part of their energy security strategies.
India's Position in the Global Context -
India currently has enough reserves for 74 days, including strategic and commercial stocks. While this is below the global benchmark of 90 days, it still provides a significant buffer during emergencies. India is continuously increasing its storage capacity to move closer to international standards.
How Long Can Oil-Producing Countries Last -
Another interesting way to look at oil reserves is to consider how long they will last if production continues at current levels. Some oil-rich countries have reserves that could last for several generations. Iran has enough oil to last approximately 134 years at its current production rate. Iraq could continue producing oil for approximately 127 years. Saudi Arabia has enough reserves for approximately 81 more years. Meanwhile, Kuwait and the United Arab Emirates have production levels that last for 90 to 100 years.
Strategic Petroleum Reserves -
Strategic petroleum reserves are different from underground oil reserves. They are extracted in advance and stored in tanks or underground caverns for immediate emergency use. The United States has the world's largest strategic petroleum reserve, with a storage capacity of over 700 million barrels. China is second and is rapidly expanding its strategic oil storage.
