ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Energy

India poised to stockpile oil in exchange for IEA role

Move highlights efforts to stabilize global crude prices

Technicians walk next to an oil storage tank on the outskirts of Ahmedabad. India has sought membership in the International Energy Agency.   © Reuters

PARIS -- The International Energy Agency will consider requiring India to stockpile crude oil in exchange for involvement in the organization's decision-making, turning to an energy-hungry Asian nonmember to help stabilize global prices.

At a two-day ministerial meeting here, the IEA decided to give India "associate membership status."

Asia's third-largest economy has aimed to join the IEA to boost its international profile. But under the agency's rules, membership is only given to members of the Organization for Economic Cooperation and Development, a group of mostly advanced industrial economies.

Since India is not part of the OECD, the IEA decided to establish a new "strategic partnership" role for the country, in effect making it a semi-member.

The two sides will negotiate what kind of rights and obligations India will have. The main agenda will be to impose member states' obligation to stockpile 90 days worth of oil imports.

The IEA was created in 1974 after the first international oil crisis to ensure energy security. But China, Indonesia, Brazil and others have not shown any intention to join, posing the body with a declining status.

The share of 30 IEA member countries in the world's energy consumption was only about 40% as of 2018 and is expected to fall to 30% in 2040.

The IEA seeks to stabilize prices by releasing oil into the market in the event of an emergency, but its declining clout means there is a risk that such interventions will not be effective. It aims to halt the decline of its position by bringing in India and increasing the number of countries participating in oil reserves. If India is added, the body's share of global energy consumption in 2040 can be maintained at 40%.

Yohei Matsumoto, Japan's deputy minister of economy, trade and Industry, on Friday expressed support for negotiations with India.

"It is important for Japan as well to strengthen the relationship between IEA and India," said Yohei, who attended the meeting.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more