India has taken a positive step towards energy security by entering into a strategic partnership framework with the International Energy Agency (IEA), reports LiveMint.
The formation of the International Energy Agency was the direct outcome of 1974 in the wake of the 1973 oil crisis.
IEA is a Paris-based autonomous intergovernmental organization established in 1974 is dedicated to responding to physical disruptions in oil supply.
While IEA’s 30 member countries hold 1.55 billion barrels in public emergency oil stocks, the industry under government obligation holds 650 million barrels in addition which can be released as needed.
“Within four years of the International Energy Agency welcoming India as an Association country, IEA members and the Government of India (GoI) have agreed to enter into a Strategic Partnership to deepen their collaboration across a wide range of critical topics including energy security and clean energy transitions,” IEA said in a statement.
“This marks a major milestone in global energy governance that could lead to eventual IEA membership for India,” the statement added.
During the height of Covid-19 lockdown across the world, the demand for oil dropped significantly and that led to Saudi Arabia, the world’s largest oil producer, decrease its oil output, leading to price volatility.
Saudi Arabia is considered by many as the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC) plus grouping which makes up for about 40 per cent of global output and 83 per cent of India’s oil imports.
India’s energy needs are primarily fulfilled by imports and this makes India highly vulnerable with regards to supply side risks which can arise from war, geo politics or natural exigencies.
Ensuring energy security by decreasing India’s vulnerability is significant as the country’s energy consumption is projected to grow at 4.2 per cent annually up to 2035 and its share of global energy demand is set to nearly double to 11 per cent by 2040.
Currently, India has 5.33 million tonnes of crude oil stored and in the second phase of strategic petroleum reserve (SPR) policy the Modi government plans to add a storage space of 6.5 million tonnes.
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