- Ahead of the upcoming mid-term congressional elections, US President, Joe Biden urges India, Japan, China and South Korea to release oil from their strategic oil reserves.
- The appeal was made on account of the soaring prices of gasoline which could impact Biden’s approval in the forthcoming elections.
- India in conjunction with Japan, the fourth-largest oil buyer have started working towards the release of oil stocks.
Given the requests made by the US, India and Japan are jointly devising ways to release crude oil from national reserves along with other notable economies like South Korea and China. With the ascent of the US gasoline prices and the probable drop in Biden’s approval ratings in the upcoming mid-term congressional elections, the US appealed to India, China, Japan and South Korea for a collegial release of oil stocks.
The request followed after failure on part of the US government to convince Opec+ and bring them around to pump more oil with major producers denying the shortage of crude oil across the world.
Fumio Kishida, Prime Minister of Japan, consented to the release of oil stocks from strategic reserves across the weekend and held dialogues with the US on the same. The 4th largest buyer of oil in the world, Japan, has restraints on ways it can act concerning its strategic reserves which are composed of both private and public stocks. They can customarily be used in times of shortage.
According to Reuters, Japanese sources confirmed that the government was considering the release of a fragment of the state-held stocks outside the minimal amount required as a legal circumvention. In addition to this, they are also looking at the release of private stocks from the national reserve, which in the opinion of advisers, are not bound by limitations.
The 1991 Gulf War and 2011 earthquake and tsunami disasters witnessed the utilization of reserves from Japanese oil companies.
Owing to the imminent lockdowns in Europe and plans to release the oil, Brent crude was down to 0.7% on Monday. Exceeding the minimum legal requirement of 90 days, the oil reserves of Japan held 145 days’ worth of daily petroleum consumption at the end of September month.
Private companies of Japan, in addition to refiners, currently contain about 175 million barrels of crude oil and related products as a part of the Strategic Petroleum Reserve (SPR). The aforementioned quantity suffices a 90-day consumption as claimed by agency Jogmec, in addition to surpassing the minimum 70-day requirement.
Companies owned by private entities in Japan, in addition to refiners, have approximately 17.5 crore barrels of crude oil and other related products as part of the Strategic Petroleum Reserve (SPR).