Washington, March 6: In a recent interview, US Energy Secretary Chris Wright revealed that the United States has reached out to India to purchase Russian oil stored in floating reserves in South Asia. This move is part of a short-term effort to alleviate pressure on global oil markets.
Wright explained that the aim is to quickly transport stored crude oil to refineries and prevent a rise in oil prices, especially due to shipping disruptions around the Strait of Hormuz that have increased pressure on supply routes.
“We need to bring oil to the market in the short term. In the long term, supply is abundant. There is no cause for concern,” he stated.
The US administration has identified significant quantities of Russian crude oil stored in tankers near Asian markets, including oil originally intended for China but not yet purchased by buyers.
Wright noted, “The Russian oil reserves around South Asia are essentially backups for China.”
The strategy involves encouraging India to buy this oil and process it in its refineries to quickly supply the market. “We have told our friend India to buy that oil and bring it to their refineries,” he added.
This approach aims to reduce competition for other available supplies among global refiners. “This stored oil goes directly to Indian refineries, alleviating pressure on other refineries as they no longer have to compete with the Indians for that supply,” Wright explained.
The upward pressure on oil markets has arisen due to concerns over supply disruptions caused by tensions in the Strait of Hormuz, a narrow waterway that carries a significant portion of the world’s oil shipments.
Wright emphasized that this step involving India is part of a series of temporary measures aimed at stabilizing prices. “We have several measures that are short-term and temporary,” he said, stressing that this decision does not indicate a shift in the US policy towards Russia.
“This is not a change in policy towards Russia. It is merely a very brief policy adjustment to help keep oil prices somewhat under control,” he clarified.
India, one of the world’s largest crude oil importers, has significantly increased its purchases of Russian oil following Western sanctions after the Ukraine conflict, becoming a major buyer of discounted Russian crude and exporting refined petroleum products to global markets.
The Strait of Hormuz is crucial, carrying nearly one-fifth of the world’s maritime oil shipments, making any disruption or tension in the region a focal point for energy markets. When geopolitical risks affect major shipping routes, governments and energy producers often take short-term measures to stabilize supply.