- November 26, 2021
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Context: India’s move to release 5 million barrels of oil from its strategic reserves as part of a coordinated challenge led by the US against the OPEC+ producers’ cartel’s move to curb output.
It is part of a concerted effort ( USA, China, EU , Britain , India )to negate upward pressure on crude prices from OPEC+ — a 13-country grouping of oil exporters that has been joined since 2016 by 10 others led by Russia to decide production quotas — keeping supply below demand, even though the action is largely symbolic in nature. India has called for an increase in the supply by OPEC+ at multiple international forums and in bilateral talks with oil producing countries. India argues that high crude oil prices are impacting the post-Covid economic recovery, especially in the developing countries. It is the first time that New Delhi would be dipping into its reserves to leverage it as a geopolitical tool
India’s strategic reserves are the effort of a broader plan to build an emergency stockpile with millions of barrels of crude oil, on the lines of the reserves that the US and its Western allies set up after the first oil crisis of 1973-74. These can be used in situation which include any natural calamity or unforeseen global event leading to an abnormal increase in prices.
More about Strategic reserves: DPN Oct