India could release 5 million crude oil barrels from reserves to reduce global prices

In tandem with the US, Japan, and other major economies, the Government of India intends to release about 5 million barrels of crude oil from its emergency stockpile to cool down the price of oil, a top government official said on Tuesday.

As per official records, India stocks about 38 million barrels of crude oil in underground caverns at three locations on the east and west coast. This is the first time that India, which stores about 5.33 million tonnes of crude oil, would release stocks on an emergency basis.

The anonymous official also maintained that out of the total stock, nearly 5 million barrels will be released in as early as 7-10 days. The crude oil stock will be sold to Mangalore Refinery and Petrochemicals Ltd (MRPL) and Hindustan Petroleum Corp Ltd (HPCL), which are connected by pipeline to the strategic reserves.

"We may look at releasing more reserves later," the official said, adding that an official announcement was awaited later in the day.

US presses large oil consumers to release crude oil stocks

Pertinently, the Unites States had last week made an appeal to some of the world's biggest oil-consuming nations, including China, India, and Japan, to consider releasing crude stockpiles in a coordinated attempt to reduce global energy rates.

This comes after members of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies refused requests to speed up their production.

India on the other hand has been the most dynamic on its stand on the rising global oil prices, slashing imports from Saudi Arabia by nearly a quarter after OPEC+ extended production rates.

High prices will undermine the global economic recovery: Petroleum Minister

Earlier, Minister of Petroleum and Natural Gas Hardeep Singh Puri in Dubai said that high prices will undermine the global economic recovery.

"We are working on releasing stocks from our strategic reserves in coordination with other nations," the official said.
"The release timing will depend on the US making a formal announcement,"  the official added.

Notably, India, which is the world's third-largest oil consumer and importing nation, has been severely hit by the constant rise in the prices of international oil.

OPEC and its other ally producers, including Russia, collectively known as OPEC+, have been producing around 4,00,000 barrels per day to the market every month, which many consider insufficient to cool prices that have been on a record high as demands return to pre-pandemic levels.

Inputs: ANI 

Image: AP