Japan, India to cooperate on petroleum stockpiling mechanism amid geopolitical woes

Japan and India will cooperate in a petroleum stockpiling mechanism, among other areas, to bolster energy resilience amid geopolitical tensions, Japan's Ministry of Economy, Trade and Industry and India's Ministry of Petroleum and Natural Gas said in a joint statement July 2.

The move followed a summit meeting between Japanese Prime Minister Sanae Takaichi and Indian Prime Minister Narendra Modi in New Delhi earlier in the day, when the two leaders shared the intention to work together as major energy consumers in Asia, according to the joint statement.

Under the bilateral cooperation, Japan and India will cooperate in sharing respective expertise in the area of crude oil and petroleum products stockpiling systems and reserve mechanisms.

Specifically, the countries will focus on mechanisms related to national stockpiling systems and reserves, including industry stockpiles; coordination regarding arrangements with producing countries and emergency response and market stabilization, according to the joint statement.

The move comes as India is seeking to be a member of the International Energy Agency and Japan is a key member of the IEA. Japan hopes the bilateral cooperation dialogue will contribute to meeting India's IEA participation requirements, such as the obligation to hold 90 days of stockpiles, a Japanese government source told Platts, part of S&P Global Energy, July 2.

During the summit meeting, Takaichi stated that Japan places importance on the role India will play in ensuring stability in international energy markets and will support India's participation in the IEA, according to a statement from Japan's Ministry of Foreign Affairs.

The IEA member countries agreed March 11 to release an unprecedented 400 million barrels of oil from storage, responding to a Middle East supply shock the agency has called the largest in history.

As part of the bilateral cooperation, the two sides also reaffirmed the importance of "resilient, self-reliant, and efficient maritime transport of oil and gas as a critical pillar of energy security for both countries," according to the joint statement.

The two countries also concurred in "exploring collaborative opportunities, including joint investments, across the maritime energy transport value chain," it added.

With the aim of advancing cooperation, the two sides decided to have discussions under the Japan-India Joint Working Group on Petroleum and Natural Gas under the aegis of the Japan-India Energy Dialogue.