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.
The unusual request comes as U.S. 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 U.S. 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.
Oil prices eased on the news after settling further below seven-year highs struck in early October.
Read more: Oil prices drop after China releases reserves of gasoline, diesel
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.
China’s state reserve bureau said on Thursday it is working on a release of crude oil reserves although it declined to comment on a U.S. request to the world’s top consuming nations to tap stockpiles to ease global energy prices.
The National Food and Strategic Reserves Administration told Reuters when asked to comment on the U.S. request that it would disclose the details of the move on its website.
CNBC: US asks Japan, China, others to consider tapping oil reserves, sources say.https://t.co/o6mbfPA2zy / Drawing down your reserves doesn't actually change the production outlook. If OPEC holds steady or decreases production until reserves are depleted, who wins in the end?
— Kenneth Cheung (@kennethdavid) November 18, 2021
“We are carrying out the work of releasing crude oil reserves. And for any details related to the releasing, we will put out a statement on our website,” a reserve bureau spokeswoman said.
China, the world’s biggest oil importer, rolled out its first public auction of state crude oil reserves to a select group of domestic refiners in September, aiming to stabilise energy prices.
Beijing also said earlier this month it would tap its state fuel reserves to tame the soaring diesel and gasoline prices.
Read more: Oil gains around 1% after OPEC+ holds line on supply
Benchmark Brent oil prices have gained as much as 69% this year. It retreated 0.4% to $79.97 per barrel on Thursday.
U.S. light sweet crude oil prices dropped 0.8% and touched its lowest level in a month.
Reuters with additional input by GVS News Desk