Bloomberg quoted US officials as saying that President Joe Biden will announce tomorrow, Tuesday, the start of using strategic oil reserves, in coordination with several countries.
Bloomberg added that the announcement could be made jointly with India, Japan and South Korea, and that Washington was considering releasing more than 35 million barrels of oil gradually.
But Reuters news agency quoted a White House official as saying that no decision had been taken on a coordinated withdrawal of oil reserves.
US President Joe Biden earlier asked China, India, South Korea and Japan to implement a coordinated withdrawal of oil reserves, at a time when gasoline prices in the United States are jumping, amid a significant decline in Biden’s popularity before the midterm elections for Congress next year.
The request came after the US government was unable to persuade the OPEC Plus alliance to pump more oil. The group, which inflates major oil producers, sees no shortage of global crude supply.
In Japan, 4 well-informed government sources told Reuters that Japanese officials are working on ways to overcome the restrictions imposed on the withdrawal of national reserves of crude oil, in coordination with other major economies in order to curb prices.
While Prime Minister Fumio Kishida hinted at the weekend that he was ready to do so after a request from Washington, Japan – the fourth largest oil buyer in the world – faces restrictions on withdrawing from its reserves, which are public and private stocks that can usually only be used in times of shortage.
One of the sources said that the government is considering withdrawing from the stocks held by the state without compromising the minimum required as a legal solution.
A second source stated that officials are also discussing the special reserves, which form part of the national reserve, and which some advisors believe can be withdrawn from without restrictions.
“We have no choice but to come up with something” after the US request, a third source told Reuters.
Chief Cabinet Secretary Hirokazu Matsuno said Monday that no decision had been made, while Kishida said last Saturday that the government was studying what it could do legally.
“We will have to change the law and that will take time. But some say it is possible to draw from private stocks,” the second source said.
Japanese private companies, including refineries, keep about 175 million barrels of crude oil and petroleum products in the Strategic Petroleum Reserve, which is enough for consumption of about 90 days, according to the Japan National Oil, Gas and Minerals Corporation, a government organization that manages the strategic petroleum reserve and handles drawings from stocks after the issuance decisions in this regard.
3 government sources told Reuters on Monday that India is also planning to draw from its strategic oil reserves in coordination with other consumers.
The three Indian government sources said today that they are holding consultations with the United States on the withdrawal of the strategic reserves.
India is the world’s third largest oil importer, and has about 26.5 million barrels of crude in its Strategic Petroleum Reserve.
What is a strategic reserve?
The strategic reserve is the oil resources held by some major countries for emergencies, most notably the United States, which keeps 621 million barrels stored in caves in the Gulf of Mexico.
What other countries have strategic reserves?
There is an agency called the International Energy Agency, which includes 29 countries that have to maintain emergency oil reserves that cover 90 days of net imports.
Among the most prominent members of this agency, in addition to the United States, Britain, Germany, Japan and Australia.
China and Japan have the largest strategic oil reserves in the world after the United States.
China and India are the world’s largest consumers of oil; They are associate members of the International Energy Agency.
US presidents can coordinate the withdrawal from the strategic reserve with member states of the International Energy Agency, and this is what the US president has requested from China; If China and India respond to Biden’s request, it will be the first time that these two countries coordinate with the United States in this regard.
US presidents have authorized emergency sales from the strategic reserve three times, in 1991, 2005, and 2011.