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News

India to stockpile oil in US vaults


Date:- 19 Jul 2020


 

The two countries are in an advanced stage of discussion to store crude oil in America

In a signal of trust in Washington, India has decided to store emergency stockpiles of crude petroleum in American salt caverns. As per available information, India will be the first country to be offered petroleum storage facilities in the US.

Maintaining crude stockpiles is not a new concept, but storing another country’s emergency energy supplies denotes a great degree of confidence that the country maintaining the reserve will actually return it during an emergency.

India has offered its storage facilities to the UAE and Saudi Arabia while Japan, New Zealand and South Korea have an agreement to draw upon each other’s reserves in case of need.

India and the US have signed a MoU to develop a strategic petroleum reserve and the two countries are in an advanced stage of discussion to store crude oil in America to increase India’s stockpile, Union Minister of Petroleum and Natural Gas Dharmendra Pradhan said on Friday. The MoU was signed after Pradhan co-chaired a virtual US-India Strategic Energy Partnership Ministerial with US Energy Secretary Dan Brouillette

The US began paying renewed attention towards building up more reserves after the pandemic struck. On March 19, US President Donald Trump ordered the buying up of oil from local producers and filling up the strategic reserves to maximum capacity.

With oil demand at a historic low, the US has found it a good opportunity to ask other countries to buy oil from American companies and then store them in US vaults for which they will have to pay storage charges.

While the US has the largest reserves in the world, enough to meet world demand for a day, China too has massive oil reserves.

In case this move fructifies, India will be in the unique position of having strong energy ties with both Russia and the US. 

Courtesy: Daily Tribune:  19th July, 2020