India has said that it will extract 5 million barrels of crude oil from reserves as part of a warning to oil-producing countries that reduces production and increase the prices. The move is part of a strategic decision taken by various countries under the leadership of the United States to lower the international crude oil prices. The United States has said it will take 5 million barrels of crude oil. China, Japan, and the United Kingdom will also co-operate in the work.
India has the same reserves of 3.8 crore barrels of crude oil as the major oil consumer countries. The Mangalore Refinery and Petrochemicals and Hindustan Petroleum Corporation, which have set up the pipeline with the reservoirs, will be initially transferred the oil from the stockpile. The final decision will be taken after 8 or 10 days of discussion.
“India strongly believes that the pricing of liquid hydrocarbons should be reasonable, responsible, and be determined by market forces,” a government statement said. The release of 5 million barrels of crude oil would be equivalent to about 12.8 percent of India’s strategic oil reserves of 5.33 million tonnes of crude oil, which is estimated to be equivalent to 9.5 days of its crude oil demand.
The United States has repeatedly asked OPEC+, a group of oil producers, including Russia, to increase production, but has refused. The reason behind inflation is the reduction of production and the creation of artificial demand globally. The U.S. is trying to warn against this and planning it.
India has been the most forceful about flexing its muscles as a major oil consumer, cutting shipments from Saudi Arabia by about a quarter after OPEC+ extended production cuts. India is the world’s third-largest oil consumer and importing nation. It has been severely impacted by the relentless rise in international oil prices.
The Union Ministries of Petroleum and Foreign Affairs have responded favorably to the Biden administration’s call for the immediate release of reserves. If the consumer countries decide to open their reserves together, it will be the first time in the history of the oil market and also it would be a big warning to the oil-producing countries.