The storage of petroleum products on surface is associated with difficulties and limitations. Accordingly, a viable alternative is to excavate underground space in rock and provide a safe way for oil storage. Soft rocks such as salt domes provide good conditions from environmental and operational points of view. The potential for high-volume storage and low permeability are encouraging aspects for oil storage in salt domes. The complicated shape of oil storage caverns, the complicated behavior of salt rocks, and boundary conditions associated with large underground openings are important challenges in the design of oil storage caverns. The aim of this paper is to delve into the stability and deformation mechanisms of storage caverns created in salt domes. A parametric study of effect of the cavern size, orientation, and depth is carried out as a function of ground stress regime. The stress field and deformation mechanisms are calculated for each case aiming at providing design guideline.