NEW DELHI: India -- the world's third-biggest oil importer -- is exploring storing crude oil in the US and other commercially viable locations to hedge its supply risks, oil minister Dharmendra Pradhan said on Tuesday.
Also, the country has tied up long-term crude oil supplies from the US, Russia and Angola to diversify its import basket beyond its traditional suppliers in the volatile Middle-East, report agencies.Speaking at a conference on the 'Energy Security Towards Atmanirbhar Bharat', he said India is now importing crude oil from over 30 countries, including from Africa, North and South Americas as well as Southeast Asia.
"We are also exploring overseas crude storage facilities in the US and other commercially viable locations," he said.
India and the US had on July 17 signed a preliminary agreement for cooperating on emergency crude oil reserves, including the possibility of India storing oil in the US emergency stockpile.
The nation currently stores 5.33 million tonnes (about 38 million barrels) of crude oil in underground storages at three locations on the east and west coast, hardly enough to meet its 9.5 days needs. The International Energy Agency (IEA) prescribes its members to have at least 90 days of stock in the strategic reserves.
India has been looking to expand the storage capacity by another 6.5 million tonnes Chandikol in Odisha and Padur in Karnataka and is also exploring the possibility of hiring storage in the US to stock some oil that can be used in times of extreme price volatility or supply disruption.
The nation is as much as 85 per cent dependent on imports to meet its oil needs. It bought 101.4 million tonnes of crude oil from overseas during April 2019 to March 2020 - two-third of these coming from the Middle East countries such as Iraq and Saudi Arabia."New long-term contracts have been entered into by our companies with their counterparts in the US, Russia and Angola," he said.
Also, the import of gas (in its liquid form or LNG) has been diversified from traditional supplier Qatar to the US, Australia and Russia, he said.
"With the significant demand contraction globally, the hydrocarbon supplies are relatively less of a concern," he said.
Pradhan said filling existing underground strategic storages using low priced crude oil in April and May helped save over Rs 5,000 crore.
"To further improve energy security in the hydrocarbons sector, we are gradually improving crude and petroleum products storage capacity from existing 74 days of national consumption to 90 days," he said.