India will release emergency reserve of oil, will crude oil prices come down?

Oil Reserves: The final call for releasing oil from strategic reserves will be taken at the highest level. He said that soon an announcement can be made regarding this.

China is already preparing to release crude oil, while Japan is considering the US proposal. If China, Japan, India, South Korea and the US agree on a simultaneous crude oil release

In view of the rising prices of crude oil, America has made a plan to release the emergency reserves of oil in collaboration with India and other major economies. In such a situation, India can also release oil from its emergency release. This plan of America to release oil together with other countries is a direct signal to those oil producers who have artificially curbed oil supply. However, the amount and release time of the oil is still being worked out.

According to a report in the Economic Times, top officials of the petroleum and foreign ministries have been working since Monday to decide on the Biden administration’s call for an oil release. A person with knowledge of the matter said that the final call for releasing oil from strategic reserves would be taken at the highest level. He said that soon an announcement can be made regarding this.

Oil release together will be the first time in history

China is already preparing to release crude oil, while Japan is considering the US proposal. If China, Japan, India, South Korea and the US agree to simultaneously release crude oil, it will be the first such instance in the history of the oil market. A person with knowledge of the matter said that it would be an expression of displeasure against the rising oil prices.

A strong signal to OPEC+

The quantum of oil release from each country’s strategic reserves may not be huge, but the synchronized action of the world’s top consumers will send a strong signal to OPEC+. The cartel of oil producers has not increased supply and maintained its control despite rapid recovery in oil demand and rising prices. Brent crude is currently trading around $79.06.

OPEC+ did not listen to Biden

Earlier this month, OPEC+ ignored US President Joe Biden’s call to increase supplies. After this, Biden urged major consumers of crude oil to coordinate the release of oil from its strategic reserves. Energy experts are of the view that a coordinated release is likely to bring down prices temporarily.

India has 5.33 million tonnes of strategic reserve

India and other countries have created Strategic Petroleum Reserves mainly to meet supply disruptions and not to deal with high prices. India has a strategic reserve of 5.33 million tonnes of crude oil. This reserve is enough for about nine days according to India’s oil consumption before the pandemic.

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