Strategic Oil Reserves: India, US, China Take on Opec+ to Release Oil from Reserves to Control Higher Prices | International business news – Community News
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Strategic Oil Reserves: India, US, China Take on Opec+ to Release Oil from Reserves to Control Higher Prices | International business news

WASHINGTON: In concerted efforts to contain rising oil prices, major economies such as India, the US, China, Japan, South Korea and Britain decided on Tuesday to release millions of barrels of oil from their respective strategic reserves after producers of the Opec+ repeatedly ignored calls for more crude.
US President Joe Biden, facing low approval ratings amid rising inflation in the run-up to next year’s congressional elections, has repeatedly asked the Organization of the Petroleum Exporting Countries (Opec) and its allies, known as OPEC+, for more to pump oil.
Tuesday’s announcement that the US would release 50 million barrels came after an official said Washington had approached major Asian energy consumers to help lower oil prices from nearly three-year highs. Britain had not previously been mentioned as involved.
It was the first time Washington coordinated such a move with some of the world’s largest oil consumers, officials said.
OPEC+, which includes Saudi Arabia and other US allies in the Gulf, as well as Russia, has declined requests to pump more at its monthly meetings. It will meet again on December 2 to discuss the policy, but so far has given no indication that it will change course.
The group struggles to meet existing targets under its agreement to gradually increase production by 400,000 barrels per day (bpd) each month — a pace Washington considers too slow — and remains concerned that a rebound in the number of coronavirus cases could fall again. demand.
The current high prices have been caused by a sharp rebound in global demand, which collapsed at the beginning of the pandemic last year.

Talking with partners
The release of the US Strategic Petroleum Reserve would come in a loan and sale to companies, US officials said.
The loan of 32 million barrels is set to take place in the coming months, as the government would accelerate a Congress-approved sale of 18 million barrels.
“We will continue to discuss this matter with international partners. The president stands ready to take additional action if necessary and is ready to use his full authorities in coordination with the rest of the world,” said a senior US government official against reporters.
India said in a statement it would release 5 million barrels of oil, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from private reserves.
South Korea said details on the amount and timing of the release of oil reserves would be decided after talks with the United States and other allies.
Japanese media said Tokyo would announce its plans on Wednesday.
Benchmark Brent oil traded above $80 a barrel on Tuesday, up from pre-announce levels but still well below last month’s three-year high of more than $86.
Washington’s attempt to partner with major Asian economies to lower energy prices is a warning to OPEC and other major producers to raise concerns about high crude prices, which have risen by more than 50% so far this year. have risen should be removed.
Suhail Al-Mazrouei, energy minister of the United Arab Emirates, one of OPEC’s largest producers, said before announcing details of the release of US reserves that he saw “no logic” in lifting the UAE’s supply. for the world markets.
An Opec+ source said releasing reserves would complicate calculations for Opec+ as it monitors the market on a monthly basis.
Increased voltage
“These developments indicate a period of heightened political tensions between the world’s largest consumers and OPEC+, implying increased oil price volatility,” said Henning Gloystein of Eurasia Group.
The United States has traditionally worked on coordinated equity issuance with the Paris-based International Energy Agency (IEA), a bloc of 30 industrialized energy-consuming countries.
Japan and South Korea are IEA members. China and India are affiliate members only.
Commerzbank analyst Carsten Fritsch described the US release of 50 million barrels as “pretty significant” and more than expected before the announcement. “The question is the time horizon of the release and how Opec+ will respond,” he added.
Under an exchange of US reserves, oil companies that take crude oil must return it – or the refined product – plus interest. Swaps are typically offered when oil companies experience supply disruptions, such as a pipeline failure or damage from a hurricane.
Direct sales are less common. US presidents have authorized emergency sales three times, most recently in 2011 during a war in Libya, a member of OPEC. The sale also took place during the Gulf War in 1991 and after Hurricane Katrina in 2005.

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