The United States and India signed a preliminary agreement on July 17 on cooperating on emergency crude oil reserves, including the possibility of India storing oil in the U.S. emergency stockpile, officials said.

U.S. Energy Secretary Dan Brouillette told reporters in a teleconference with India Oil Minister Dharmendra Pradhan, that officials will discuss details of the emergency reserves in the next months.

The United States would like to begin the process of sharing with India the establishment of a strategic petroleum reserve (SPR) and then see how the U.S. SPR, comprised of underground caverns in Texas and Louisiana, could help India store oil there, Brouillette said.

U.S. President Donald Trump in March ordered Brouillette to fill the SPR to its capacity of about 714 million barrels of capacity, but Congress failed to fund a purchase.

Brouillette said it could mirror a recent plan with Australia, which in April committed to spending about $60 million to build an emergency oil stockpile, first by buying crude to store in the U.S. SPR.

"It could ultimately look similar ... but there's no predetermined outcome as to where this conversation is going to go," Brouillette said.

Global oil prices fell steeply earlier this year as shutdowns from the novel coronavirus sapped demand, but have stabilized at around $43/bbl on hopes for stimulus programs.

In May, Pradhan said India, the world's third-biggest oil consumer and importer, had already filled its 5.33 million tonnes of strategic storage and parked about 8.5-9 million tonnes of oil on ships, primarily in the Gulf.

India is the fourth-largest export destination for U.S. crude. It plans to build new strategic storage to expand capacity by 6.5 million tonnes.

Pradhan said July 17 that the bilateral hydrocarbons trade between the two countries had touched $9.2 billion during 2019 to 2020, about 10% of the overall bilateral trade.