A man wears a face mark as he fishes near docked oil drilling platforms, May 8, 2020, in Port Aransas, Texas.
(ERIC GAY / AP)
WASHINGTON – The United States said on Tuesday it would release 50 million barrels of oil from strategic reserves in a coordinated move with Britain and some Asia countries including Japan and India to cool prices after OPEC+ producers rebuffed calls for more crude.
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US President Joe Biden, facing low approval ratings amid rising inflation ahead of next year's congressional elections, has repeatedly asked the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to pump more oil.
The release from the US Strategic Petroleum Reserve would be in a loan and a sale to companies, US officials said
OPEC+, which includes Saudi Arabia and other US allies in the Gulf, as well as Russia, has rebuffed requests to pump more at its monthly meetings. It meets again on Dec 2 to discuss policy but has so far shown no indication it will change tack.
The group has been struggling to meet existing targets under its agreement to gradually increase production by 400,000 barrels per day each month – a pace Washington sees as too slow – and it remains worried that a resurgence of coronavirus cases could once again drive down demand.
Current high prices have been caused by a sharp rebound in global demand, which cratered last year, early in the pandemic.
The unprecedented effort by Washington to team up with major Asian economies to lower energy prices sends a warning to OPEC and other big producers that they need to address concerns about high crude prices, up more than 50 percent so far this year.
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An OPEC+ source, speaking before the group's December meeting, said a release from reserves would complicate the maths for OPEC+, as it monitors the market on a monthly basis.
The release from the US Strategic Petroleum Reserve would be in a loan and a sale to companies, US officials said. The 32 million barrels loan will take place over the next several months, while the administration would accelerate a release of 18 million barrels in sales already approved by Congress.
India said in a statement it would release 5 million barrels. South Korea said it had agreed to participate but did not give volumes. Japanese media said Tokyo would announce its plans on Wednesday. Britain had no immediate comment.
Global benchmark Brent crude was trading around $80 a barrel on Tuesday, above where it was trading before the announcement but well off last month's three-year high of more than $86.