(Juhi Aishwary, Journalist): A hallmark of the growing strategic relationship between India and the United States was seen at the strategic energy partnership meeting of the two countries on Friday. During the meeting, much talk went ahead on the proposal to set up strategic oil reserves for India in the US. India imports 84 percent of its requirement from foreign markets and has to face huge uncertainty due to changes in the prices of crude in the international market. India has been able to create a strategic reserve of only 15 days of its consumption. On the other hand, the US has a huge storage capacity. India can better cope with the uncertain situation by keeping its oil reserves there.
This was the second partnership meeting of the two countries led by Petroleum and Natural Gas Minister Dharmendra Pradhan and US Energy Minister Dan Brownlett. According to a joint statement issued after the meeting, an agreement will be reached between the US Department of Energy and India’s Ministry of Petroleum and Natural Gas for the establishment of strategic petroleum reserves purchased oil and gas. This is about 10 percent of the total imports from the US.
The US has joined the top 10 countries from which India buys the most petroleum fuels. It is poised to be among the top five suppliers in the next two-three years. Currently, the US has the world’s largest storage capacity, which is built during the Cold War era. Its capacity is about 80 million barrels. The US stores about a month’s capacity in its national consumption, but it has never been fully utilized. In such a situation, India can use this capability.
Right now, when crude oil is cheaper in the international market, India can buy it and keep it in the US storage capacity. At the same time, India has become a big buyer of American crude and shale gas in just two years. In such a situation, it is also helping India acquire all energy technologies. There is also a massive work in both countries to upgrade technology in the renewable energy sector. India expects US companies to participate in the disinvestment of state-owned oil companies.
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