Some of the world’s largest energy consumers are joining a US-led push. They want to unleash strategic oil reserves in an attempt to bring down high prices and keep inflation in check.
Following weeks of conversations to establish a strategy to stop price spikes, the White House said Tuesday that China, Japan, India, South Korea, and the United Kingdom would join the project.
Here are individual nations’ judgments on “how best to adapt to the various difficulties and conditions they each confront,” according to the IEA, which monitors global oil supply on behalf of the world’s main economies.
Countries Response to the white house
The US will release around 50 million barrels from its Strategic Petroleum Reserve in December. The oil will likely enter the market. Here’s what we know about other countries’ actions thus far:
India has committed to releasing 5 million barrels at a period. Five countries mutually agreed upon this commitement. Moreover, India has consistently raised worry about oil supply being improperly manipulated below demand levels by oil-producing nations, resulting in higher prices and harmful effects, the Indian government stated immediately after the White House announcement.
The amount and time of South Korea’s oil reserves release will be in conjunction with other nations. However, it is likely to be at a level “comparable to prior international cooperation situations,” according to a statement from the South Korean government.
South Korea discharged about 3.5 million barrels. Alternatively it was about 4% of the country’s oil reserves. This came during the Libyan crisis in 2011 when civil conflict interrupted global oil supply. It did this by bringing up to 1.8 million barrels a day offline.
In a statement, the UK government said it will enable corporations to “voluntarily release” up to 1.5 million barrels of oil reserves. They called the move “a prudent and calibrated action to help global markets as we emerge from the epidemic.”
On Friday, China, the world’s second-largest economy and top oil importer, said it was working on a strategic oil release. Moreover, China’s National Food and Strategic Reserves Administration said it was “moving on with crude oil release-related activity at the moment,” according to a spokeswoman.
However, the official would not say whether the action was in response to a request from the US to collaborate to address the supply shortage.
On Wednesday, Japanese Prime Minister Fumio Kishida declared that the country would release oil from its reserves. “We have been collaborating with the United States to stabilize the world oil market,” he told reporters. Moreover, he added that the action would not violate oil hoarding restrictions.
Stabilizing crude oil prices, according to Kishida, is critical to the economy’s recovery from the coronavirus outbreak. He stated that further information on the timing and amount of oil would come later.
Moreover, according to the US Energy Information Administration, Japan possessed 388 million barrels of total strategic crude oil stockpiles as of June 2020.