New Delhi — India’s plan to release 5 million barrels of oil from stockpiles in tandem with releases by other major consumers is unlikely to alter its crude import plans as it is already selling less from the caverns than its target, a government official said.
The United States said on Tuesday it was releasing millions of barrels from its strategic reserves in tandem with India and other countries. The timing was not specified.
India, the world’s third biggest oil importer and consumer, imports over 84% of its oil needs and has strategic petroleum reserves (SPR) to store up to 5 million tonnes, or about 37 million barrels of oil, to protect against supply disruptions.
The government official, who asked not to be named, said the release from India’s strategic petroleum reserve (SPR) was “a symbolic gesture” as it needed to create space as part of efforts to make money from renting out the storage and was already selling the oil.
India has repeatedly raised concerns over rising oil prices and wants the Organization of the Petroleum Exporting Countries and its allies led by Russia, known as OPEC+ to increase output more quickly.
The country will sell 5 million barrels, equivalent to one day of its oil demand, to Mangalore Refinery and Petrochemicals Ltd and Hindustan Petroleum Corp.
India last year filled the storage with cheap oil and earlier this year overhauled its SPR policy to commercialise half of the storage and lease space to Indian and foreign companies.
To obtain enough space for its plan, India has to sell about 13 million barrels oil as 5.5 million barrels of space is already leased to Abu Dhabi National Oil Company.
Since sales began in August, Indian Strategic Petroleum Reserves Ltd (ISPRL), which manages the federal reserves, has sold about 5 million barrels from the caverns, a second source said.
- Reuters (Reporting by Nidhi Verma; Editing by Barbara Lewis)
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