The US urges all nations to stop Iranian oil imports by November 4. Failure warns economic sanctions. India gears up to face the storms with saved reservoirs.
The US hits Iran with sanctions, India may become a good Samaritan with a rupee-rial mechanism. The move is valiant but it will possibly turn out to be a savior at the time.
Refiners buy Iranian oil in euros on a 2-month credit basis. The rest funds come from SBI and Germany-based Europäisch-Iranische Handelsbank. Though the Indian government has not urged to cut Iranian oil, RIL and Nayara are some of the private players have begun the lessening the Iranian imports.
Media in Iran accused Sushma Swaraj, the External Affairs Minister for following the UN sanctions only and not the other particular nations. We’ll see India’s approach on the oil trades for the past few decades and its stance today.
The pretext of crude oil reserve:
Strategic oil reserves are in addition to the already operative petroleum products and crude oil reserves. The project is made to store the crude oil reserves in the underground rock caverns, speaking of which, are the most secure way of storing hydrocarbons.
The purpose behind the strategic oil reserves is to get support at the time of external supply catastrophe. The crisis management had to be done. The oil reserves have begun fortifying India’s energy resources as a security. Indian Strategic Petroleum Reserves Ltd manages the working of the Indian oil reserves.
The brains behind the project:
Gulf War had hit Asian regions in the 1990s and affected India to a greater extent that it almost left the economy in an insolvency situation. With a massive rise in the prices of oils, India’s imports only got bigger and more difficult handle. That’s when Liberalisation, Privatisation, and privatization was introduced. It weathered the storm and rescued India from getting into major financial crisis at the time.
That being said, the vulnerability of India in the area of oil reserves continued to impact India. To fend India in long-term Atal Bihari Vajpayee government came up with the concept of oil reserves in 1998.
India is receiving the first shipload crude oil from UAE. This will be loaded for the underground strategic storage in Mangalore. ISPRL has signed a contract with ADNOc to lease out part of the Mangalore storage.