Major oil-consuming countries including India-USA-China are extracting crude from their reserve reserves. Experts Stanley Reid (NYT) and Ajay Kedia (Kedia Advisory) explain why these countries, which are pitted against each other on various issues, have come together.
Apart from the US and India, Britain, Japan, South Korea and China are extracting oil from their strategic reserves. America has given instructions to remove 50 million barrels. India has 5 million barrels, Britain 1.5 million barrels, Japan and South Korea together will also extract 4 to 5 million barrels of reserve oil.
This step has been taken after the oil-producing countries OPEC+ refused to increase the production of crude oil. OPEC countries are going to meet next month. Hopefully, because of this pressure, they will consider increasing production.
In June 2011, 27 other countries used about 60 million barrels of reserve oil to make up for the shortfall in Libya's production due to the political crisis.
29 member countries, including India, maintain emergency reserves of oil. The reserves that meet the requirement of 90 days in war are kept in reserve. America has the largest strategic petroleum reserves of 62 million barrels.
In the international market, the price of crude oil had exceeded $ 86 per barrel last month. Threats to release oil have led to a slight decline in it. Currently, the price of crude oil is at $78 per barrel.
If the rupee continues to depreciate, this exercise will have no meaning for India. Despite crude oil being cheaper in dollars, it will be costlier in rupee. In view of the elections, the Center has also tried to reduce the prices on its behalf. From India's point of view, this campaign is not very promising.