India has reportedly rejected the latest call to release the strategic petroleum reserves made earlier this week by US President Joe Biden, who insists that the measure would temper rallying crude oil prices.
The US administration reached out to some of the world’s largest oil-consuming states, including China, India, Japan, and South Korea, according to several people aware of the development, as quoted by Reuters.
“Strategic oil reserves weren’t ever intended for a situation like this… It’s for a force majeure situation, if there’s an earthquake, a global outbreak of hostilities, and oil supplies are shut,” India’s oil minister Hardeep Singh Puri said in an interview with Bloomberg TV on Wednesday, commenting on the appeal.
Global prices for gas, coal, oil, and electricity have surged to record highs since major economies began their post-pandemic recovery, with demand for energy facing meagre supply amid widespread under-investing in the energy sector. In late October, prices for crude hit a three-year high, soaring to nearly $85 per barrel.
Washington has made several attempts to cool down the world’s exorbitant oil prices amid intense domestic pressure to tap into reserves and ban oil exports.
After the Organization of Petroleum Exporting Countries and its allies led by Russia decided to stick to the original plan to decrease collective oil output cuts by 400,000 barrels per day during December, rejecting Biden’s appeal for a boost in production, the White House opted to call upon the Asian states, which together with the US make up the world’s top five oil consumers.
Earlier this week, Seoul also signaled that it wouldn’t comply with Biden’s request. Meanwhile, China said that it was moving to tap a stockpile release to lower prices. The news, announced on Wednesday, sent prices dropping to six-week lows, but global benchmarks recovered some ground on Thursday.
Brent crude futures shed 1.94% to $79.66 as of 09:26 GMT, easing the latest gains. US West Texas Intermediate (WTI) crude futures fell 1.68% to $77.68.
READ MORE: Seoul indicates it may snub US oil request
Indian strategic oil reserves are reportedly standing at 39 million barrels versus a demand of nearly five million barrels a day, while US reserves amount to 714 million barrels. Meanwhile, crude stockpiles of China and Japan total 475 million barrels and 324 million barrels respectively. South Korean reserves are reaching 71 million barrels. Altogether, the reserves make up 15 days of supply globally, which is currently pegged at 99 million barrels per day.
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