OIL: THE USA ASKS TOKYO, BEIJING, TO TAP ON THEIR RESERVES, DEPENDING ON THE SOURCES
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par Trevor Hunnicutt, Jarrett Renshaw et Timothy Gardner
WASHINGTON (Reuters) – The administration of US President Joe Biden has called on some major oil-consuming countries, including China, India and Japan, to consider drawing on their crude reserves as part of the a coordinated approach aimed at lowering energy prices, we have learned from several people familiar with the matter.
The unusual demand came as Joe Biden faces political pressure in the United States over rising prices at the pump and other consumer goods amid a rebound in post economic activity. -coronavirus health crisis.
It also reflects Washington’s frustration with members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies who have rejected its repeated demands that they speed up their production.
According to one of the sources, what is at stake is for the world’s main oil consumers to come together to send OPEC the message that it must “change its behavior”.
In recent weeks, the sources said, Joe Biden and his top advisers have discussed the possibility of a coordinated release of oil reserves with allies including Japan, South Korea and India, as well as with China.
Such an approach had already been initiated in the past by the United States and its allies, for example in 2011 when a conflict was raging in Libya, a member of OPEC.
But the current proposal takes a new turn and constitutes an unprecedented challenge for OPEC since it involves China, the world’s largest importer of crude.
A representative from Japan’s Ministry of Industry said Washington had requested Tokyo’s cooperation in tackling soaring oil prices, without confirming whether the demand was part of a coordinated move to unlock reserves. Japanese law prohibits Tokyo from using its reserves in order to push prices down, the official added.
In Seoul, an official confirmed that the United States had requested the release of part of South Korea’s oil reserves. “We are looking carefully at US demand, however we are not releasing our oil reserves because of rising prices. We could do so if there is an imbalance in supply,” he said.
According to an American source who participated in the discussions, the United States would have to release more than 20 million barrels of oil for the approach to have an impact on the markets.
Several people familiar with the matter have warned that negotiations have not been finalized and that no final decision has been taken on a possible way forward to counter rising oil prices.
The White House declined to comment on the content of its exchanges with other countries.
OPEC and its allies including Russia in OPEC + confirmed earlier this month their decision to raise production by 400,000 barrels per day, refusing to give in to Washington’s demand for a more hike. Mark.
(Reporting Trevor Hunnicutt, Jarrett Renshaw and Tim Gardner, with Valerie Volcovici in Washington, Noah Browning in London, Nidhi Verma in New Delhi, Yuka Obayashi and Aaron Sheldrick in Tokyo, Heekyong Yan in Seoul, Muyu Xu in Beijing; French version Jean Terzian )
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