Japanese and Indian officials are looking to release crude oil national reserves in tandem with the United States and other major economies to lower prices, seven government sources familiar with the plan told Reuters.
US President Joe Biden has asked China, India, South Korea and Japan to release coordinated oil stocks as US gasoline prices soar and his approval ratings plummet ahead of the midterm congressional elections. period next year.
This request comes after the US government was unable to convince OPEC+ to pump more oil with major producers claiming that the world is not short of crude oil.
Japanese Prime Minister Fumio Kishida signaled his readiness to release shares over the weekend.
Three Indian government sources on Monday said they are holding consultations with the United States on the release of oil from strategic reserves.
Japan, the world’s fourth-biggest oil buyer, is limited in how it can act with its reserves – which include both private and public reserves – which can often only be used in shortage time.
A Japanese source said the government is considering releasing the share of shares held by the state beyond the required minimum amount as a legal solution.
Japanese officials are also looking into private shares that are part of the national reserve, which some advisers say can be issued without restrictions, a second source said.
The reserves of Japanese oil companies were tapped during the 1991 Gulf War and after the 2011 earthquake and tsunami.
Brent crude fell 0.7% on Monday due to impending European shutdowns and oil release plans.
According to official data, Japan’s oil reserves accounted for 145 days of daily gasoline consumption at the end of September, much higher than the 90-day minimum required by law.
According to state agency Jogmec, Japanese private companies including refineries hold about 175 million barrels of crude oil and oil products as part of the Strategic Petroleum Reserve (SPR), enough to consumption in about 90 days, according to state agency Jogmec, also exceeds the minimum requirement of 70 days.
India holds about 26.5 million barrels of oil in the SPR.