oil

Emergency Oil Reserves to Combat Skyrocketing Prices But It’s Not Who You Think it Is

In response to soaring oil prices worldwide, India is preparing to release its emergency stockpile in the hopes that this might provide some stability for the volatile market. The country is the third largest consumer of oil in the world, and the crisis in Ukraine threatens to aggressively drive up prices that were already high before the Russian invasion began. Japan and Australia are reportedly planning to do the same, and more countries may follow soon.

Nations coordinating oil reserve releases

Prices in the United States are nearing unprecedented highs, but it isn’t just North America that’s scrambling to get fuel prices under control.

India has cooperated with the United States to release 3.5 million barrels of oil already, but like President Biden’s use of the American strategic reserve, the releases have not slowed rising prices.

The price per barrel rose to more than $100 internationally after Russia began its invasion, and there is only so much world leaders can do to control the situation.

Biden has vowed to work with other governments to coordinate more releases, but national stockpiles may not be enough.

The White House has not yet given in to calls for Russian oil imports to be banned. Russian oil is only a small share of what the United States imports, but anything that could increase prices even further might be too unpopular right now.

Europe is much more dependent on Russia for fuel, which means that even the closest American allies abroad will be extremely hesitant to cooperate with sanctions in this area.

India maintains ties to Russia

India is also a key Russian trading partner. The two countries have had war relations since the Soviet era and the Indian military is heavily reliant on Russian arms and equipment.

The Biden administration is considering for India’s refusal to turn against Russia so far, a move which might jeopardize coordination on oil reserve releases.

The State Department even sent diplomats a cable instructing them to accuse their counterparts from India and the United Arab Emirates of being “in Russia’s camp.”

The cable was quickly recalled, but the two countries are now undoubtedly aware of its existence. Both India and the UAE have been seen as important American partners.

If the Biden administration adopts this “with us or against us” approach it might inadvertently drive these countries towards Russia.

This stance could very easily be perceived as a bullying one by India and an attack on its neutrality; the White House wants India to cooperate on Ukraine and on oil, but being too pushy on the former could backfire for both issues.

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