OIL & GAS

Why India and US are releasing oil reserves to take on OPEC+

India, which is the world’s third-biggest oil importer, will release 5 million barrels of crude oil from its strategic petroleum reserves in a concerted effort to bring down global crude oil prices, which were crossing $85 a barrel last month.

The 5 million barrels is roughly equivalent to a day’s consumption in the country, which implies that it is more of a symbolic gesture in tandem with the US, Japan and other major economies to band together against OPEC’s reign over high crude prices.

Last week, the US had made the unusual request to some of the world’s largest oil-consuming nations, including China, India and Japan, to consider releasing crude stockpiles in a coordinated effort to lower global energy prices after members of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies rebuffed repeated requests to speed up their production increases.

The White House said the US would release 50 million barrels of crude oil from the American Strategic Petroleum Reserves. This coordinated release of crude oil from strategic reserves will be the first of its kind globally.

OPEC and other ally producers — including Russia, known collectively as OPEC+ — have been adding around 4,00,000 barrels per day to the market on a monthly basis, which many see as not sufficient to cool prices that had been rising as demand returns to pre-pandemic levels.

Source
ET Energy World
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