The White House announced Tuesday that the United States would release about 50 million barrels from its Strategic Petroleum Reserve and that China, Japan, India, South Korea and the United Kingdom would participate in the coordinated move.
According to the International Energy Agency, which monitors the world’s oil supply on behalf of the world’s major economies, there have been three coordinated action launches since the agency was founded: before the 1991 Gulf War, after the Hurricanes Katrina and Rita damaged oil facilities in the Gulf of Mexico in 2005, and in response to the supply disruption caused by the war in Libya in 2011.
“We recognize that rising oil prices are imposing a burden on consumers and have added to inflationary pressures during a period in which the economic recovery remains uneven and faces a number of risks,” the IEA said in a release. The Paris-based agency was not involved in the US-led initiative.
Wrench The details of the market intervention remain unclear, including the precise amounts that some major countries will contribute, but here is what we know so far about what other countries are doing:
“China will organize the release of state crude oil reserves in light of the situation and needs and take other necessary measures to maintain the stability of the oil market,” Chinese Foreign Ministry spokesman Zhao Lijian said on Wednesday. , in an information session.
“China has long attached great importance to the stability of the international oil market and we are willing to maintain communication with relevant parties on maintaining market balance and long-term stability,” he added.
The world’s second-largest economy and the largest oil importer told CNN on Friday that it was working on a strategic oil launch. A spokesperson for China’s National Food and Strategic Reserves Administration confirmed that China had already released an undisclosed amount of oil to keep industry costs under control.
Japanese Prime Minister Fumio Kishida confirmed on Wednesday that Japan would release oil from its state reserves.
“We have been cooperating with the United States to stabilize the international oil market,” he told reporters, adding that the country would make the decision in a way that does not contravene oil storage laws.
Kishida said stabilizing crude oil prices is crucial to helping the economy recover from the coronavirus pandemic. He said more details on the timing and amount of oil will be announced later.
Japan had 388 million barrels of total strategic crude oil reserves as of June 2020, according to the US Energy Information Administration, which said about 76% of them were government stocks and about 24% were commercial.
The prospect of the United States and other major energy consumers releasing emergency barrels has already helped drive down oil prices, at least in the short term. After surpassing $ 85 a barrel at the end of October, oil prices in the United States have fallen by around 10%. That, in turn, has helped curb rising gasoline prices.
India agreed to release 5 million barrels, to be scheduled in agreement with the other five nations.
“India has repeatedly expressed concern about the artificial adjustment of oil supply below demand levels by oil-producing countries, leading to higher prices and negative consequences,” the Indian government said. in a statement shortly after the White House announcement.
He said several Indian state governments had already taken “difficult steps” to reduce local fuel taxes.
“Despite the high tax burden borne by the government, [they] they were taken in order to bring relief to citizens, “he added.
The South Korean government said in a statement that the amount and timing of the release of its oil reserves would be decided through consultations with the other countries, but said it was expected to be at a level “similar to the cases. previous international cooperation “.
“The South Korean government decided to participate in the United States proposal to release the oil reserve after taking into consideration the need for international cooperation in the face of the recent sharp increase in international oil prices, the importance of [South Korea]-Alliance of the United States, and the participation of the main countries, “he said in a statement from his Ministry of Foreign Affairs.
The UK government said in a statement that it will allow companies to “voluntarily release” oil reserves of up to 1.5 million barrels, in what it called “a sensible and measured step to support global markets as we exit. the pandemic “.
“As we said before, we will work closely with our international partners to do what we can to support the global economy during the transition that follows the pandemic,” said a government spokesman.
—CNN Beijing office, Manveena Suri, Emiko Jozuka, Junko Ogura and Yoonjung Seo contributed to this report.