China, OPEC cool on US bid to tame oil prices

Updated: November 25th, 2021 10:40 PM IST

The challenged OPEC+ producers with the coordinated release of oil from strategic reserves along with China, India, South Korea, Japan and Britain

China, OPEC cool on US bid to tame oil prices

WASHINGTON, Nov 23 (Reuters) - The administration of U.S. President Joe Biden announced on Tuesday it will release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude.

Biden, facing low approval ratings and accelerating inflation ahead of next years congressional elections, has grown frustrated at repeatedly asking the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to pump more oil without any response.

"I told you before that were going to take action on these problems. Thats exactly what were doing," Biden said in remarks broadcast from the White House.

"It will take time, but before long you should see the price of gas drop where you fill up your tank, and in the longer-term we will reduce our reliance on oil as we shift to clean energy," he said.

Crude oil prices recently touched seven-year highs, and consumers are feeling the pain. Retail gasoline prices are up more than 60% in the last year, the fastest rate of increase since 2000, largely because people have returned to the roads as pandemic-induced restrictions have eased.

Under the plan, the United States will release 50 million barrels, the equivalent of about two and a half days of U.S. demand. India, meanwhile, said it would release 5 million barrels, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from privately held reserves.

Japan will release "a few hundred thousand kilolitres" of oil from its national reserve, but the timing of the sale has not been decided, industry minister Koichi Hagiuda told reporters on Wednesday. read more

Earlier the Nikkei newspaper reported that Japan will release about 4.2 million barrels of oil (666,666 kilolitres) or about 1 or 2 days worth of its demand. A Japanese refining source said it has already bought oil for processing in February 2022. read more

China, the worlds largest crude importer, remains non-committal, though it has taken steps this year to cool price rises of other commodities in its domestic market. Beijing will release crude oil from its reserves according to its needs, a foreign ministry spokesman said on Wednesday. read more

"As a result, the Biden administration will have to turn to China again. This is a direction that benefits everyone, but China clearly has the upper hand," the state-backed Global Times said in an editorial. read more

Brent crude rose for a second day on Wednesdayto $82.70 a barrel by 0908 GMT, after falling more than 10% for several days on concerns of more supplies from SPR releases. Goldman Sachs said the volume announced was "a drop in the ocean". [nL1N2SF013]

OPEC+, which includes Saudi Arabia and other U.S. allies in the Gulf, as well as Russia, has rebuffed requests so far to pump more. It meets again on Dec. 2 to discuss policy but has so far shown no indication it will change tack.

A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson/File Photo

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