PremiumOil tumbled on signs the US is considering tapping its reserves again in a potentially massive release aimed at managing inflation and supply shortages following Russia’s invasion of Ukraine.
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As oil prices dived on news that the US was considering record release from the reserves, India on Thursday said it supports the initiative to let out from the strategic stockpile to cool rising oil prices.
Oil tumbled on signs the US is considering tapping its reserves again in a potentially massive release aimed at managing inflation and supply shortages following Russia’s invasion of Ukraine.
West Texas Intermediate futures fell as much as 6.8%, before paring some of those losses to trade near $102. The US is weighing a release of roughly 1 million barrels of oil a day for several months, Bloomberg reported.
"Government of India (GoI) is closely monitoring global energy markets situation in the backdrop of evolving geopolitical events," Minister of State for Petroleum and Natural Gas Rameswar Teli said in a written reply to a question in Lok Sabha.
GoI, he said, "is ready to take all appropriate action, as deemed fit, including supporting initiatives for releases from SPR, for mitigating market volatility and calming the rise in crude oil prices."
In November 2021, in a bid to control inflationary pressures, India, in consultation and parallelly with major energy consumers, had agreed to release 5 million barrels from its SPR.
Oil prices earlier this month surged to 14-year record highs on Russia's invasion of Ukraine and subsequent supply concerns, driving spikes in inflation across the global economy.
In a separate reply, Teli said, India’s major sources of crude oil imports are Iraq, Saudi Arabia, UAE, Nigeria and USA, with approximately less than 1% of total crude oil being imported from Russia in the year 2021-2022 (till January).
"Import of crude oil is carried out by Indian Oil and Refining Companies in public and private sector from diverse sources, including from sources in Russia, through business-to-business arrangements, based on techno-commercial considerations and domestic requirements," he added.
This was in response to a query on whether Russia offered oil to India at cheaper rates.
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