Page 24 - NorthAmOil Annual Review 2021

NorthAmOil NOVEMBER NorthAmOil

US confirms co-ordinated

SPR release

The US has teamed up with China, India, South Korea, Japan and the

UK to co-ordinate releases from their strategic petroleum reserves

GLOBAL THE US announced in November that it would Deliveries of SPR crude will take place over
release 50mn barrels of crude from its strate- January-April 2022, with early deliveries
WHAT: gic petroleum reserve (SPR). The move will be accepted in late December 2021. Under the
The US, China, India, co-ordinated with China, India, South Korea, exchange arrangement, oil companies taking
South Korea, Japan and Japan and the UK in a bid to provide relief from crude released from the SPR must return it,
the UK have agreed to oil prices that recently reached their highest level which has been scheduled for 2022-24. Such
jointly release crude from in seven years. swaps are typically offered when oil companies
their SPRs. The initiative comes after the OPEC+ group face supply disruptions, such as pipeline outages
has ignored repeated calls to lower crude prices or damage from extreme weather, while out-
WHY: by releasing more oil into the market. The group right sales of SPR crude are less common.
The move comes as an recently opted to maintain its current output
attempt to rein in high plan, which entails scaling up production by Joint release
oil prices after OPEC+ only 400,000 barrels per day (bpd) each month Biden had been seeking to agree on a joint
ignored repeated calls to until the end of 2022. Thus far, OPEC+ has release for weeks, and his efforts have borne fruit,
help lower prices. shown no signs of altering its plan, but this could to some extent. However, the US accounts for the
now change in the wake of the joint SPR release. largest volumes set to be released by far, while the
WHAT NEXT: Now, though, the US has said that up to 32mn contributions of other countries look set to be
The SPR release may barrels would be released from its SPR over the small in comparison.
have less of an impact coming months through an exchange, while the China said in November that a second release
than the countries timeline for a previously approved outright sale from its SPR was in the works. India has said it
involved are hoping for. of 18mn barrels would be accelerated. would release 5mn barrels, and the UK said it
“We will continue talking to international would allow the voluntary release of 1.5mn bar-
partners on this issue. The president stands rels from privately held reserves. The Japanese
ready to take additional action if needed, and government said on November 24 that it would
is prepared to use his full authorities working in release several million barrels, though it did not
co-ordination with the rest of the world,” a sen- specify volumes, and South Korea also said it
ior official in the administration of US President would participate in the joint release without
Joe Biden stated. providing specific numbers.

Up to 32mn barrels
will be released from
the US SPR over the
coming months through
an exchange, while the
timeline for a previously
approved outright sale
of 18mn barrels will be
accelerated.

P24 www. NEWSBASE .com Annual Review 2021