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  • President Biden propels China, India, Japan to release oil reserves

The Biden administration has asked some of the world’s largest oil-consuming nations including China, India and Japan to consider releasing crude stockpiles in a coordinated effort to lower global energy prices, according to several people familiar with the matter.

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The unusual request comes as US President Joe Biden fends off political pressure over rising pump prices and other consumer costs driven by a rebound in economic activity from lows plumbed early in the coronavirus pandemic.

It also reflects US frustration with members of the Organization of the Petroleum Exporting Countries and its allies, who have rebuffed repeated requests from Washington to speed up their production increases.

In Asia, where China said it is working on a crude release, oil prices extended declines prompted by the US request, after settling on Wednesday further below seven-year highs struck in early October.


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Biden and top aides have discussed the possibility of a coordinated release of stockpiled oil with close allies including Japan, South Korea and India, as well as with China, over the past several weeks, the sources said.

A Japanese industry ministry official said the US has requested Tokyo’s cooperation in dealing with higher oil prices, but he could not confirm whether the request included coordinated releases of stockpiles. By law, Japan cannot use reserve releases to lower prices, the official said.

China’s state reserve bureau said it was working on a release of crude oil reserves although it declined to comment on the US request.

A South Korean official confirmed the US had asked Seoul to release some oil reserves.

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“We are thoroughly reviewing the US request, however, we do not release oil reserves because of rising oil prices. We could release oil reserves in case of supply imbalance, but not to respond to rising oil prices,” the official said.

The US share of any potential release of reserves would need to be more than 20 to 30 million barrels to affect markets, according to a US source who participated in the discussions.

Such a release could be in the form of a sale or a loan from the US Strategic Petroleum Reserve – or both.

Esther Solaja

posted 2021-11-18 08:06:29

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