India is in advanced talks to store its crude oil in US strategic petroleum reserves as an insurance against any supply disruption or price spikes, Oil Minister Dharmendra Pradhan said on Friday

He said the two nations have signed a memorandum of understanding (MoU) to being cooperation on strategic petroleum reserves.

"We are also in an advanced stage of discussions for storing crude oil US strategic petroleum reserves to increase India's strategic oil stockpile," he told reporters after co-chairing the second India-US Strategic Energy Partnership Ministerial with US Secretary of Energy Dan Brouillette.

The US has 714 million barrels of oil storage capacity in its strategic petroleum reserve (SPR), the world's largest supply of emergency crude oil.

In comparison, India stores 5.33 million tons (about 38 million barrels) of crude oil in underground storages at three locations on the east and west coast, hardly enough to meet its 9.5 days needs.

International Energy Agency (IEA) prescribes its members to have at least 90 days of stock in the strategic reserves.

India has been looking to expand the storage capacity and is also exploring the possibility of hiring storage in the US to stock some oil that can be used in times of extreme price volatility or supply disruption.

"We are beginning to collaborate on strategic petroleum reserves as well and that is an important element of energy security," Brouillette said. "We are collaborating on renewable energy, nuclear energy, energy efficiency in buildings, appliances, and industrial sector."

Stating that the two nations are also looking at cooperation in hydrogen, he said, "It is a partnership between two great nations... when it comes to relations between the United States and India, economically and energy-wise, best is yet to come".

He said US oil supplies to India have jumped ten-fold to 2,50,000 barrels per day (bpd) between 2017 and 2019.

"Between 2017 and last year, US crude oil exports to India rose by nearly 10-folds to almost 2,50,000 barrels per day. Between March 2016 and May of this year, 68 LNG shipments of over 234 billion cubic feet were exported to India. India is now the single largest importer of US oil in the world," he said.

The US is India's sixth-largest oil supplier.

India began importing crude oil from the US in 2017 as it looked to diversify its import basket beyond the OPEC nations. It bought 1.9 million tons (38,000 bpd) of crude oil from the US in 2017-18 and another 6.2 million tons (1,24,000 bpd) in 2018-19.

The volume that Brouillette talked translates into 12.5 million tons of oil imports in a year.

India, which is 85 per cent dependent on imports to meet its oil needs, bought 101.4 million tons of crude oil from overseas during April 2019 to March 2020.

He said the US and India make no distinction between good and bad energy and believe in deploying every energy fuel and every technology.

Speaking on the occasion, Pradhan said the strategic energy partnership has four primary pillars of cooperation -- oil and gas, power and energy efficiency, renewable energy, and sustainable growth.

Through the strategic energy partnership, the US and India collectively seek to enhance energy security, expand energy and innovation linkages across the respective energy sectors, bolster strategic alignment, and facilitate increased industry and stakeholder engagement in the energy sector.

Also, a US-India Gas Task Force (GTF) has been set up, he said.

"The bilateral hydrocarbons trade alone has touched USD 9.2 billion during 2019-20, accounting for 10 per cent of the overall bilateral trade (between India and the US). We have also seen a significant reduction in the trade deficit between the two countries," Pradhan said.

The second India-US Strategic Energy Partnership Ministerial meeting was originally scheduled to be held in Washington in April this year but got postponed due to the outbreak of coronavirus pandemic. The dialogue was held through video conferencing.

The government had in February 2018 elevated the India-US Energy Dialogue to a Strategic Energy Partnership (SEP). It was to be co-chaired by Minister of Petroleum and Natural Gas from the Indian side and US Secretary of Energy from the American side.

The SEP was formally announced during the visit of Prime Minister Narendra Modi to the US in June 2017, and the first ministerial meeting was held in New Delhi on April 17, 2018, between Pradhan and the then US Secretary for Energy Rick Perry.

The GTF had identified three key themes that need to be addressed to expand natural gas use in India and trade with the United States -- natural gas pricing - markets and regulation, strengthening of gas infrastructure, and stimulating natural gas demand growth.