Governments of some of the world’s largest economies say they are looking into releasing oil from their strategic reserves following a rare request from the United States for concerted action to lower global energy prices and ahead of a meeting of major oil producing companies. Nations.
The Biden administration has asked major oil buyers such as India and Japan — and for the first time China — to consider releasing stockpiles of crude oil, several people familiar with the requests told Reuters on Wednesday. Oil prices fell on the news.
As the global economy recovers from the pandemic, Washington is frustrated that producers in OPEC+, the Organization of Petroleum Exporting Countries and allies such as Russia have rejected US requests to accelerate oil supplies.
With gasoline prices and other costs rising, US President Joe Biden is also under political pressure ahead of next year’s midterm elections.
Members of Biden’s national security team had discussed the need to meet fuel demand, White House spokesman Jen Psaki said Thursday.
“That’s an ongoing conversation that we have with a number of partners,” she said.
OPEC+ plans to meet on December 2. The group has taken a slower approach to boost production as the economic recovery is too fragile to justify increased supply.
Oil prices fell about four percent to their lowest point in six weeks after Reuters reported on the US request and China’s decision to release some crude oil before gaining some ground on Thursday.
The Chinese state reserve agency told Reuters it was working on releasing crude oil reserves, but declined to comment on the US request.
The United States has the largest strategic reserve with more than 600 million barrels.
In recent years, the shale boom has pushed US production to rival that of Saudi Arabia and Russia. As a result, the United States has become less dependent on energy imports from other countries, especially members of OPEC.
The recitals highlight importers’ frustrations with a cartel that has influenced oil prices for more than five decades.
It would also be the first time that China, the world’s No. 2 oil consumer and largest importer, would be involved in a coordinated release with the United States.
There was no immediate official response from OPEC+ members. The group has increased production by 400,000 barrels per day per month, phasing out the record production cuts made in 2020, when the pandemic plunged fuel demand.