NEW DELHI: India on Saturday pledged support to a US bid for co-ordinated release of strategic oil reserves to cool prices, even as New Delhi said it is “closely” monitoring the global energy markets to track any supply disruptions following the Russia-Ukraine conflict.
India is also committed to supporting initiatives for releases from strategic petroleum reserves, for mitigating market volatility and calming the rise in crude oil prices,” a petroleum ministry statement said without elaborating when or to what extent the reserves will be tapped and if it will prevent pump prices from rising.
The statement came in the wake of US president Joe Biden saying he would do everything in his power to “limit the pain the American people are feeling at the gas pump”.
Biden had in November-end taken an initiative to persuade major users such as India, China, South Korea and Japan for a co-ordinated release of strategic reserves to cool oil prices from $84 a barrel.
The US had then released 50 million barrels and India released 5 million barrels, the first time it tapped into its strategic reserves for market intervention. India has in store 5 million tonnes of oil, which is roughly 39 million barrels, or around 10 days of imports, in rock caverns at three locations.
“With a view to ensuring energy justice for its citizens and for just energy transition towards a net-zero future, India stands ready to take appropriate action for ensuring ongoing supplies at stable prices,” the statement said without elaborating further or referring to fuel prices that have remained unchanged since November 4.
Saturday said it is closely monitoring the global energy markets to track any supply disruptions following the Russia-Ukraine conflict, and will support the release of oil from strategic storage to cool prices.
International oil prices climbed to an over seven-year high of USD 105.58 on February 24 over concerns of supplies being disrupted as a result of Russia attacking Ukraine. The rates have cooled to below USD 100 as western sanctions against Russia kept out energy supplies.
“The Government of India is closely monitoring global energy markets as well as potential energy supply disruptions as a fall out of the evolving geopolitical situation,” an oil ministry statement said.
While supply routes remain open, prices are likely to pinch. Petrol, diesel and cooking gas (LPG) rates continue to be on the election-related freeze for nearly four months now, but PSU oil firms are expected to pass on the elevated global oil prices to consumers soon after elections in Uttar Pradesh end next month.
“With a view to ensuring energy justice for its citizens and for just energy transition towards a net zero future, India stands ready to take appropriate action for ensuring ongoing supplies at stable prices,” the statement said without elaborating.
India is also committed to supporting initiatives for releases from Strategic Petroleum Reserves, for mitigating market volatility and calming the rise in crude oil prices,” it added.
Asia’s third largest economy had in November last year agreed to release about 5 million barrels of crude oil from its emergency stockpile in tandem with the US, Japan and other major economies to cool international oil prices.
This was the first time ever that India, which stores 5.33 million tonnes or about 39 million barrels of crude oil in underground caverns at three locations on the east and west coasts, had agreed to release stocks for such purpose. That was when crude was at USD 82-84 per barrel. Now, it is much higher than that.
The US is trying to do a coordinated release with other consuming nations to cool rates again. The statement did not say how much oil India will release.
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