India may stockpile crude oil in US-based strategic reserves to shield itself from any supply disruptions arising out of geopolitical reasons and natural disasters, three people aware of the development said.
The US is increasingly becoming a key partners in India’s energy security. India has been importing oil and gas from the US since 2017, and discussions are underway to store crude oil in American strategic reserves, the people said on condition of anonymity.
In just two years, the US has become one of the top 10 sources of crude oil imports for India, they said. India imports over 80% of the crude oil it processes; it imported crude oil worth $101.4 billion in 2019-20.
The meeting, which was due to be held in Washington in April this year, got postponed because of the outbreak of the Covid-19 pandemic; it will take place on Friday through video conferencing, another person said. The SEP was formally announced during Prime Minister Narendra Modi’s visit to the US in June 2017.
The first ministerial meeting was held in New Delhi on April 17, 2018 between minister Pradhan and the then energy secretary Rick Perry.
The three underground caverns are located in Vishakhapatnam, Mangalore and Padur. The government has approved the construction of two more strategic crude oil reserves with a total 6.5 million tonnes of capacity at Chandikhol in Odisha and Padur in Karnataka. The proposed facilities will provide additional storage capacity for 11.57 days of requirements.
Oil ministry officials confirmed that the two ministers will discuss various strategic matters of mutual interest, including investments in energy projects, on Friday, but declined to disclose details.
On Wednesday, Pradhan and Brouillette had co-chaired an industry-level interaction organised by the US-India Business Council (USIBC). On Tuesday, the Indian minister had interacted with industry under the US-India Strategic Energy Partnership, oil ministry officials said.