Indian Petroleum Secretary Tarun Kapoor told IANS in an interview that:
- though offers from the US for storing India's strategic oil reserves is available, it will have to be seen whether it serves the national interest
- The US offer is for using their salt caverns to store India's strategic oil reserves. This form of storage allows extraction of oil only once in 5 years
- So, it creates limitations in using this overseas strategic oil in times of exigencies.The US offer is there but we have not taken a call on it
In 2020 India indicated its plan to build a portion of its strategic oil reserves in the US to take advantage of low oil prices quickly and thus scale up its reserves to meet 100 days of requirements, which would take years if only domestic capacities were considered for storing strategic oil reserves.
The urgency to scale up pushed India into signing a MoU with the US to cooperate on strategic petroleum reserves last year after the conclusion of the India-US strategic energy partnership meeting attended by Indian Petroleum Minister D.Pradhan and then US Energy Secretary Dan Brouillette.
This was followed by offers from the US strategic oil storage facilities to India. Sources said that with the US option to use salt caverns almost rejected, India will explore the availability of alternate storage options in the country or look for facilities in Europe or the Middle East.
Also, the plan is to speed up work on building additional 6.5 MT of strategic petroleum reserves under the 2nd phase. The original schedule for the completion of expansion projects is 6 to 7 years that is expected to be squeezed to half the time.
India is already the 4th largest buyer of US oil and 5th largest for LNG. The bilateral hydrocarbon trade has expanded 93 % in the last 2 years to $9.2 billion in 2019-20, which is 10 % of the total trade between the countries.