WASHINGTON, Nov 23 (Reuters) – The administration of U.S. President Joe Biden announced on Tuesday it will release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude.
Biden, facing low approval ratings amid rising inflation ahead of next year’s congressional elections, has grown frustrated at repeatedly asking the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to pump more oil without any response.
“I told you before that we’re going to take action on these problems. That’s exactly what we’re doing,” Biden said in remarks broadcast from the White House.
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“It will take time, but before long you should see the price of gas drop where you fill up your tank, and in the longer-term we will reduce our reliance on oil as we shift to clean energy,” he said.
Crude oil prices recently touched seven-year highs, and consumers are feeling the pain of the increase in fuel costs. Retail gasoline prices are up more than 60% in the last year, the fastest rate of increase since 2000, largely because people have returned to the roads as pandemic-induced restrictions have eased and demand has rebounded.
Under the plan, the United States will release 50 million barrels, the equivalent of about two and a half days of U.S. demand. India, meanwhile, said it would release 5 million barrels, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from privately held reserves.
Japan will hold auctions for about 4.2 million barrels of oil, about 1 or 2 days worth of its demand, out of its national stockpile by the end of the year, the Nikkei newspaper reported on Wednesday.
Details on the amount and timing of the release of oil from South Korea and China were not announced. Seoul said it would decide after discussions with the United States and other allies.
The price of oil rebounded on Tuesday, after falling for several days as rumors of the plans made their way into the market. Some analysts also attributed the market’s rebound to the lack of firm details out of China, though Reuters reported last week that the country has been working on such a release. Brent crude futures rose 3.3% on Tuesday to $82.31 a barrel.
It was the first time that the United States had coordinated such a move with some of the world’s largest Asian oil consumers, officials said.
OPEC+, which includes Saudi Arabia and other U.S. allies in the Gulf, as well as Russia, has rebuffed requests to pump more at its monthly meetings. It meets again on Dec. 2 to discuss policy but has so far shown no indication it will change tack.
U.S. marshals other nations, challenges OPEC+ with release of oil