India is ready to join the global efforts of major oil consumers led by the United States to reduce oil prices.
The world's third-largest oil importer, India, plans to release crude oil from its strategic petroleum reserves in a coordinated effort of consuming nations to bring down prices, three government sources told Reuters on Monday.
The United States has asked the top Asian consumers India, Japan, China, and South Korea to release crude from their respective strategic stockpiles after the OPEC+ group has been ignoring for months calls from consumers—most vocal from the U.S.—to increase the monthly production by more than the 400,000 bpd decided in July.
At the end of last week, China was already preparing to release crude oil from its strategic reserve, Reuters reported, citing the country's National Food and Strategic Reserves Administration.
"We are carrying out the work of releasing crude oil reserves. And for any details related to the releasing, we will put out a statement on our website," a spokeswoman for the Chinese administration told Reuters.
Japan is also considering a release from its crude reserves, together with the United States and other major consumers, to reduce prices, Japanese Prime Minister Fumio Kishida said on Saturday, as quoted by Kyodo News agency.
If Japan goes ahead with such a release, it would be the first time the country has tapped into its oil reserves to reduce prices. Japan has previously released crude from reserves, but only in times of supply shortages, such as during the Gulf War in 1991 or in the wake of the Fukushima disaster when it closed all its nuclear plants. Currently, Japan's Oil Stockpiling Law allows for reserve releases only in such cases, nor for lowering oil prices. Officials, however, say that stockpiles that exceed Japan's reserve targets could be released without revising the law, Kyodo News notes.
Market talk of a coordinated reserves release has dampened sentiment and dragged oil prices lower in recent days, although Goldman Sachs, for example, says that the market has already priced in such a global effort.
By Tsvetana Paraskova for Oilprice.com
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