Page 4 - AsianOil Week 46 2021

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US seeks Asian allies

for SPR strategy

The US wants to co-ordinate with major Asian crude buyers to oversee
the release of strategic reserves in order to bring prices down

COMMENTARY THE US has responded to OPEC+’s refusal done so, it is not clear whether other consumer
earlier this month to up its scheduled produc- countries will do likewise.
tion increases by calling on China, Japan, South
WHAT: Korea and India and to release their strategic On the defensive
The US has called on petroleum reserves (SPRs) in order to help cool The Biden administration has mulled over the
China, Japan, South Korea international oil prices. possibility of a co-ordinated stockpile release
and India and to tap their US President Joe Biden is under pressure with Japan, South Korea, India and China for
SPRs. from Congress to tap into the country’s oil a number of weeks, Reuters’ sources said this
reserves to ease some of the economic pressure week.
WHY: caused by the oil price recovery. The US was frustrated after OPEC+ agreed
Washington is worried Washington’s request of Asian buyers to join at the start of the month to stay the course with
about the economic it, however, is expected to send a clear message to its current production plan, resisting pressure to
impact of high oil prices. OPEC+ that consumer countries are no longer scale up output.
willing to accept runaway oil prices, Reuters The organisation agreed on November 4
WHAT NEXT: quoted unnamed sources as saying on Novem- to implement its August production plan in
The US may struggle ber 17. December and increase output by 400,000 bar-
to gain traction in Asia “We’re talking about the symbolism of the rels per day (bpd), despite consumer countries’
and OPEC+ may ignore largest consumers of the world sending a mes- warnings that high oil prices were threatening
pressure regardless. sage to OPEC that ‘you’ve got to change your their economic recovery.
behaviour’,” one source said. Defending the decision to stick with the
The international Brent benchmark has production plan, Russian Energy Minister
retreated from the around $85 per barrel mark Alexander Novak told reporters: “The decision
over the past week, slipping below $80. The con- was made previously to increase production
traction was driven both by the reports of Wash- by 400,000 bpd every month, and I underscore
ington’s desire to release oil, China’s decision to every month, until the end of 2022. Today the
actually tap its SPR and growing concerns about decision was reiterated to maintain current
a fresh surge in coronavirus (COVID-19) cases parameters which were decided on earlier.”
in Europe. Novak said the organisation had delivered
Despite China’s move to sell off some of its an additional 2mn bpd of production after
crude reserves, the second time this year it has the plan had been implemented, while also

P4 www. NEWSBASE .com Week 46 19•November•2021