STRATEGIC OIL RESERVES

Nov. 27, 2021

India’s move to release 5 million barrels of oil from its strategic reserves as part of a coordinated challenge led by the US against the OPEC+ producers’ cartel’s move to curb output, is the first time that New Delhi would be dipping into its reserves to leverage it as a geopolitical tool.

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The oil will be released “in parallel and in consultation with” the US, China, Japan and South Korea, the Oil Ministry said in a statement, without specifying a timeframe.

Why are these countries releasing oil from strategic reserves?

It is part of a concerted effort to negate upward pressure on crude prices from OPEC+ — a 13-country grouping of oil exporters that has been joined since 2016 by 10 others led by Russia to decide production quotas — keeping supply below demand, even though the action is largely symbolic in nature.
India has called for an increase in the supply by OPEC+ at multiple international forums and in bilateral talks with oil producing countries.
India argues that high crude oil prices are impacting the post-Covid economic recovery, especially in the developing countries.

Source : Indian Express