Financial Insights

Japan, India working on oil-stock release with US, timing unclear: Sources

Japan, the world’s fourth-biggest oil buyer, is restricted on how it can act with its reserves – made up of both private and public stocks – which typically can only be used in times of shortage.

The US government has been unable to persuade OPEC+ to pump more oil, with major producers arguing the world was not short of crude.
Japanese and Indian officials are working on ways to release national reserves of crude oil in tandem with the United States and other major economies, but the timing of such a release remains unclear, seven government sources with knowledge of the plans told Reuters.

Such an announcement could come as early as November 23, according to a source familiar with the discussions, but White House and US energy department officials said no official decision on a release had been made.

US President Joe Biden has asked China, India, South Korea and Japan for a coordinated oil stocks release as US gasoline prices soar and his approval ratings slump ahead of next year’s congressional elections.

The US government has been unable to persuade OPEC+ to pump more oil, with major producers arguing the world was not short of crude.

OPEC and other producers including Russia, known collectively as OPEC+, have been adding around 400,000 barrels per day to the market on a monthly basis, but have resisted Biden’s calls for more rapid increases, arguing the rebound in demand could be fragile.

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