US, India deepen energy ties; begin collaboration on strategic petroleum reserves

Cornelia Mascio
Luglio 18, 2020

"Apart from fostering bilateral energy trade and investments, we are seeking to align energy cooperation with energy security, expand energy and innovation linkages across our respective energy sectors, facilitate increased industry and stakeholder engagement as well as institutions of excellence from both countries", said Pradhan, also noting that bilateral hydrocarbons trade touched $9.2 billion during 2019-20, accounting for 10 per cent of the overall bilateral trade and significantly reducing the trade deficit between the two countries.

The United States and India signed a preliminary agreement on Friday on cooperating on emergency crude oil reserves including the possibility of India storing oil in the U.S. emergency stockpile, officials said. Its storage capacity of 88 million tonnes is several times that of India's reserve of 5.33 million tonnes.

The US government last month said it had purchased 126,000 barrels of crude oil for the strategic reserve to help local oil producers struggling with demand contraction and a supply glut.

If India finally chooses to purchase American oil and store it there it would be a big help to USA oil producers many of whom are financially troubled.

India's strategic reserves, which can provide for 9 days of local fuel needs, were nearly half-empty until three months ago and were filled up during April-May using cheap crude oil that couldn't have been processed by local state refiners due to sudden collapse in demand. A compartment at Mangalore reserve has been filled by Adnoc already.

Brouillette said it could mirror a recent plan with Australia, which in April committed to spending about US$60 million to build an emergency oil stockpile, first by buying crude to store in the US SPR.

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