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NEW DELHI : The US has reached out to India and other major oil consumers to release their strategic petroleum reserves to temper rallying crude oil prices, two people aware of the development said.

This follows the Organization of the Petroleum Exporting Countries (Opec)-plus grouping ignoring requests of the US and India to boost output even as petroleum product prices continue to scale new highs in India.

Strategic petroleum reserves are typically state-funded and aimed at tackling emergencies.

The world’s major oil consumers are the US, China, India, Japan and South Korea.

“The US has been reaching out to all consumer nations, to impress upon them to release their strategic petroleum reserves to ease out the situation," a senior Indian government official, one of the two people cited above, said, requesting anonymity.

Last year, India purchased crude oil at $19 a barrel to fill its 5.3 million tonnes (mt) of strategic reserves and, in the process, it saved $685.11 million.

New Delhi also plans to build an additional 6.5 mt of strategic petroleum reserves.

In comparison, International Energy Agency (IEA) members maintain emergency oil reserves equivalent to at least 90 days of net imports.

IEA countries hold 1.55 billion barrels of public emergency oil stocks. In addition, 650 million barrels are held by the industry under government obligations and can be released as needed.

The US government’s push comes amid petroleum and natural gas minister Hardeep Singh Puri advising major oil consumers against selling their strategic reserves.

The minister was speaking to Bloomberg at the Abu Dhabi International Petroleum Exhibition and Conference on Tuesday.

While queries emailed to the spokesperson for India’s oil ministry on Friday remained unanswered, a US State Department spokesperson directed Mint to the US embassy in New Delhi.

In an emailed response, a US embassy spokesperson said, “In general, we do not comment on private diplomatic discussions."

The US government is considering tapping its strategic oil reserves, US energy secretary Jennifer Granholm said earlier, according to media reports.

India and US have been stressing the need for affordable crude prices. Energy security is at the core of the India-US strategic energy partnership, with New Delhi elevating the India-US energy dialogue to a strategic energy partnership in February 2018.

Queries emailed to the spokesperson for the US Department of Energy on Friday remained unanswered.

Mint reported on 13 September about India’s strategic petroleum reserves starting crude supplies to state-run refiners, implementing its strategy of buying and stocking up crude when prices are low, and releasing them in the local market when prices are high. India is also drawing up a plan to counter the influence of the Saudi Arabia-led Opec cartel on global oil supplies by roping in other major Asian oil importers such as Japan and South Korea.

“High energy prices also fuel inflation. And the US, which is the world’s largest economy, is witnessing the highest inflation figures in the last 30 years," Puri said at the India Pavilion at Expo 2020 Dubai on Wednesday. He added that one can take advantage of high prices for a while, but in the process, if economic recovery is undermined it will come to haunt in other things.

With the US pitching itself as a preferred energy partner, India has been reworking its crude sourcing strategy to insulate its domestic consumers amid the uncertainty caused by sharp fluctuations in global oil prices.

Exports of crude oil from the US has risen, with New Delhi working on diversifying the country’s energy basket with supplies from non-Opec sources.

India, the world’s third-largest oil importer, has said that it will source crude from any country that offers cheaper and favourable terms. India spent $62.71 billion on crude oil imports in 2020-21, $101.4 billion in 2019-20, and $111.9 billion in 2018-19.

India is dependent on imports to meet 85% of its oil demand and 55% of its natural gas requirements.

The Opec accounts for a majority of India’s crude imports and about 40% of global production.

The Opec-plus arrangement comprising of 23 countries, including Russia and allies, have cut production, resulting in a global rally in crude oil prices.

India has raised the high oil price issue with Opec secretary-general Mohammad Sanusi Barkindo during his recent visit to India.

The discussions also focused on the need for finding a balance between the needs of suppliers and consumers. India has been raising the high oil price issue with major oil-producing countries such as Saudi Arabia, Kuwait, Qatar, the UAE, Bahrain and Russia.

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