Published: 5th Apr, 2024
Context
India, the world's third biggest oil consumer and importer, plans to build its first commercial crude oil strategic storage as part of efforts to shore up stockpiles as insurance against any supply disruption.
About
- India, which meets over 85 per cent of its oil needs through imports, will use the strategic reserves in any emergency situation like supply disruption or war.
- This approach mirrors the models adopted by countries like Japan and South Korea, allowing private lessees, predominantly oil majors, to engage in crude oil trading.
- The expansion of oil storage capacity also aligns with India’s aspiration to become a member of the International Energy Agency (IEA), necessitating members to maintain a minimum of 90 days of oil consumption.
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Fact Box: International Energy Agency (IEA)
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