President Joe biden It is preparing to announce an oil release from the nation’s Strategic Petroleum Reserve in concert with several other countries as early as Tuesday, according to people familiar with the plan.
The move, likely in conjunction with India, Japan and South Korea, would be an unprecedented effort by major oil consumers to control prices after OPEC + countries rejected US requests to significantly boost production. . China said it is working to free some oil from its strategic reserves, days after the United States invited it to participate in a joint sale.
The situation continues to change and plans could change, but the United States is considering a release of more than 35 million barrels over time, according to two of the people. The pending announcement was described by people who requested anonymity prior to official statements.
The move would pit the countries against the OPEC + coalition, led by Saudi Arabia and Russia, for control of world oil markets and could provoke OPEC and his allies to re-evaluate plans to revive oil supplies.
International Energy Forum Secretary General Joseph McMonigle said in a statement Monday that OPEC + could change its plan to increase oil production if consuming nations sell oil reserves or if the coronavirus pandemic worsens.
“Such a move would potentially raise the stakes in the oil poker game and could lead to further tensions in the bilateral relationship between Washington and Riyadh,” said Helima Croft, chief commodities strategist at RBC Capital Markets LLC.
Representatives for the US Department of Energy did not respond to a request for comment. White House press secretary Jen Psaki said the United States has been in contact with other countries but declined to say how the administration plans to proceed.
“We have been having discussions with a variety of countries about the importance of ensuring that supply meets demand and helps prevent the global economic recovery from jeopardizing,” Psaki told reporters on Monday. “I have nothing to do with you today.”
Indian government officials with knowledge of the plans said on Monday that the nation has yet to decide the timing and volume of the release of emergency oil reserves, but that it will be a coordinated step with other major consumers such as Japan and China.
Japan’s TV Asahi reported Monday that Tokyo is preparing to release crude from its domestic stocks. Japanese Prime Minister Fumio Kishida had said his government was considering a release of reserves in coordination with countries like the United States.
“The Strategic Petroleum Reserve, which is available to be released in times of national emergency and when the president thinks it might be necessary to do so,” Heather Boushey, a member of the White House Council of Economic Advisers, said in an interview Monday. on Bloomberg Televison’s “Balance of Power With David Westin”.
Oil futures rose 81 cents to settle at $ 76.75 a barrel in New York after rising to $ 77.16. Oil has fallen from a peak in late October as speculation mounted that the US and other countries would release reserves.
Biden has been seeking joint release for weeks, including during a virtual summit with Chinese President Xi Jinping.
The move would represent the largest privately organized dump of stored crude of any major economy. Previous global efforts to tap into stocks, such as the release of 60 million barrels in 2011 in the wake of unrest and supply disruptions in Libya, were coordinated by the International Energy Agency.
Biden has been under increasing pressure to curb rising energy prices that threaten to undermine the economic recovery from the pandemic. OPEC + previously rejected his request for a large production increase, instead increasing production by just 400,000 barrels per day for December.
The White House announced that Biden will give a speech on the economy and fighting inflation on Tuesday.
The national average price for a gallon of regular unleaded gasoline has been hovering for a seven-year high and was $ 3,409 as of Nov. 21, according to the AAA Automotive Club.
The Organization of the Petroleum Exporting Countries and its allies will meet on December 2. 2 to contemplate an increase in production by 400,000 barrels per day in January.
(With help from Jenny Leonard, Mike Jeffers, Javier Blas, and Jennifer Jacobs).