NEW YORK: President Joe Biden is preparing to announce a release of oil from the nation’s Strategic Petroleum Reserve in concert with several other countries as soon 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 tame prices after OPEC+ countries rebuffed U.S. calls to significantly boost production. China said it’s working to release some oil from its strategic reserves, days after the U.S. invited it to participate in a joint sale, report agencies.
The move would pit the countries against the OPEC+ coalition—led by Saudi Arabia and Russia—for control over world oil markets and could prompt OPEC and its allies to re-evaluate plans for reviving oil supplies.
International Energy Forum Secretary-General Joseph McMonigle said in a statement Monday that OPEC+ may change its plan for raising oil output if consuming nations sell petroleum reserves or the coronavirus pandemic worsens.
“Such a move would potentially raise the stakes in the oil poker game and could produce new strains in the bilateral relationship between Washington and Riyadh,” said Helima Croft, chief commodities strategist at RBC Capital Markets LLC.
Representatives of the U.S. Energy Department didn’t respond to a request for comment. White House Press Secretary Jen Psaki said the U.S. has been in contact with other countries but declined to say how the administration plans to proceed.
“We have been having conversations with a range of countries about the importance of making sure that the supply out there meets the demand and helps prevent an imperiling of the global economic recovery,” Psaki told reporters on Monday. “I don’t have anything to preview for you today.”
Japan’s TV Asahi reported Monday that Tokyo is preparing to release crude from its national stockpiles. Japanese Prime Minister Fumio Kishida had said his government was considering a release from reserves in coordination with countries such as the U.S.
“The Strategic Petroleum Reserve—that is available to be released in times of national emergency and when the president thinks that it might need to be done,” Heather Boushey, a member of the White House Council of Economic Advisers, said Monday in an interview 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 earlier rising to as high as $77.16. Oil has fallen from a high in late October as speculation increased that the U.S. and other countries would release reserves.
Biden has been seeking the joint release for weeks, including during a virtual summit with Chinese President Xi Jinping.