Page 6 - AsianOil Week 47 2021

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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

COMMENTARY THE US announced this week that it would co-ordination with the rest of the world,” a sen-
release 50mn barrels of crude from its strate- ior official in the administration of US President
gic petroleum reserve (SPR). The move will be Joe Biden stated.
WHAT: co-ordinated with China, India, South Korea, Deliveries of SPR crude will take place
The US, China, India, Japan and the UK in a bid to provide relief from over January-April 2022, with early deliver-
South Korea, Japan and oil prices that recently reached their highest level ies accepted in late December 2021. Under the
the UK have agreed to in seven years. exchange arrangement, oil companies taking
jointly release crude from The initiative comes after the OPEC+ group crude released from the SPR must return it,
their SPRs. has ignored repeated calls to lower crude prices which has been scheduled for 2022-24. Such
by releasing more oil into the market. The group swaps are typically offered when oil companies
WHY: recently opted to maintain its current output face supply disruptions, such as pipeline outages
The move comes as an plan, which entails scaling up production by only or damage from extreme weather, while outright
attempt to rein in high 400,000 barrels per day (bpd) each month until sales of SPR crude are less common.
oil prices after OPEC+ the end of 2022. Thus far, OPEC+ has shown
ignored repeated calls to no signs of altering its plan, but this could now Joint release
help lower prices. change in the wake of the joint SPR release. Biden has been seeking to agree on a joint release
Now, though, the US has said that up to 32mn for weeks, and his efforts have borne fruit, to
WHAT NEXT: barrels would be released from its SPR over the some extent. However, the US accounts for the
The SPR release may coming months through an exchange, while the largest volumes set to be released by far, while
have less of an impact timeline for a previously approved outright sale the contributions of other countries look set to
than the countries of 18mn barrels would be accelerated. be small in comparison.
involved are hoping for. “We will continue talking to international China said last week that a second release
partners on this issue. The president stands from its SPR was in the works. India has said
ready to take additional action if needed, and is it would release 5mn barrels, and the UK
prepared to use his full authorities working in said it would allow the voluntary release of

P6 www. NEWSBASE .com Week 47 26•November•2021