India Looks To The US, Other Nations To Store Its Crude Oil Bought At Lower Prices

India is looking to store crude oil it has bought at low prices in the global market in other countries, particularly the US, according to Union Minister of Petroleum and Natural Gas Dharmendra Pradhan.

New Delhi is looking at such an option because its local storage facilities are full. The Narendra Modi government’s plans are on the lines of a similar move by Australia which plans to build an emergency stockpile by buying crude and storing it in the US Strategic Petroleum Reserve.

India and Australia are among various governments that are trying to take advantage of low crude oil prices in the global market.

Though crude oil prices have recovered from lows of around $20 a barrel, the commodity is still available at an affordable rate for countries such as India, which is the third-largest importer.

On Tuesday, West Texas Intermediate crude oil was quoted at $34.35 a barrel, while the benchmark Brent crude was quoted at $36.16 a barrel.

Crude oil prices have dropped over 40 per cent this year, mainly due to sharp drop in demand in the wake of the spread of the pandemic novel Coronavirus.

During 2019-20 fiscal, India’s crude oil imports were valued lower at $102 billion due to lower prices in the global market. India imports nearly 85 per cent of its crude oil demand, running into nearly 230 million tonnes.

Pradhan said that India was “ exploring some possibilities” if it can store some of our investment (in crude oil) in a different country. “We are exploring the possibility in the US to store some of the low priced oil," he said.

The Union Government has fully stored crude oil in its 5.33 million tonnes of strategic storage, while storing nearly nine million tonnes on ships in the Gulf region and elsewhere. Plans are afoot to expand the storage to 6.5 million tonnes.

According to the Minister, the stored crude oil could meet 20 per cent of the country’s annual demand.