The Biden government has asked some of the world’s largest oil-consuming nations, including China, India and Japan, to consider releasing crude oil reserves in a coordinated effort to lower global energy prices, according to several people familiar with the matter. President Joe Biden is fending off political pressures over soaring pump prices and other consumer costs, fueled by a recovery in economic activity from the lows at the start of the coronavirus pandemic.
It also reflects the frustration of the members of the Organization of Petroleum Exporting Countries and their allies who have denied repeated requests from Washington to accelerate their production increases. “We’re talking about the symbolism of the world’s largest consumers sending a message to OPEC that ‘you need to change your behavior’,” said one of the sources.
Oil prices fell on the news after settling further below the seven-year highs reached in early October. in the past few weeks, sources said.
Tokyo responded positively to initial outreach, according to one of the sources. It was not immediately clear how others had responded.
The U.S. share of any potential release of reserves would need to be more than 20 million to 30 million barrels to affect markets, according to a U.S. source who participated in the discussions. Such a release could be in the form of a sale or a loan from the U.S. Strategic Petroleum Reserve – or both.
The SPR was established in the 1970s after the Arab oil embargo to ensure the United States had adequate supplies to weather an emergency. Several people familiar with the matter warned that negotiations on a coordinated delivery release have not yet been finalized or concluded. no final decision made. whether certain measures should be taken on oil prices.
The White House did not want to comment on the detailed content of the talks with other countries. “No decisions were made,” said a White House National Security Council spokesman.
