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India to store crude oil in U.S.

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Wednesday, 22 July, 2020, 16:10
India to store crude oil in U.S.

India plans to store its crude oil in the U.S. strategic petroleum reserves for use not just during emergencies but also for trading to capture any price advantage, officials said. India and the U.S. on July 17 signed a preliminary agreement for cooperating on emergency crude oil reserves, including the possibility of India storing oil in the U.S. emergency stockpile. "It is a good concept but comes with a lot of riders," a senior government official said. For one, India will have to pay a rental for hiring the storages in the U.S. This rental will be on top of the international price for oil.

"The alternative is to build our own strategic reserves which will involve huge capital cost and will take a few years to construct. So the rental is a small fee to pay to get immediate access to a strategic reserve," the official said.