In a statement issued on Tuesday, the White House said that China, Japan, India, South Korea and the United Kingdom would join the initiative after weeks of discussions to formulate a plan to stop price increases.
The International Energy Agency, which monitors global oil supplies on behalf of the world’s leading economies, said it respected decisions made by individual countries on “how best to respond to the specific challenges and circumstances they each face”.
“We recognize that the rise in oil prices places a burden on consumers and has contributed to inflationary pressures during a period in which the economic upswing remains uneven and faces a number of risks,”[ads1]; the agency said in a statement.
India has agreed to release 5 million barrels, to be timed in agreement with the other five nations.
“India has repeatedly expressed concern that the supply of oil is being artificially adjusted below the level of demand by oil-producing countries, leading to rising prices and negative consequences,” the Indian government said in a statement shortly after the White House announcement.
It said several Indian state governments had already taken “difficult steps” to cut local fuel taxes.
“Despite the high tax burden on the government, [they] was taken to provide relief to the inhabitants, “it added.
The South Korean government said in a statement that the amount and timing of the release of oil reserves would be determined through consultations with the other countries, but said it was expected to be at a level “similar to previous international cooperation cases.”
“The South Korean government decided to participate in the US proposal to release oil reserves after taking into account the need for international cooperation in the recent sharp rise in international oil prices, the importance of [South Korea]- The US alliance, and participation from large countries, it says in a statement from the State Department.
The British government said in a statement that it would allow companies to “voluntarily release” oil reserves of up to 1.5 million barrels, in what they called “a sensible and measured step to support global markets when we emerge from the pandemic.”
“As we have said before, we will work closely with our international partners to do what we can to support the global economy through the post-pandemic transition,” a government spokesman said.
The world’s second largest economy and largest importer of oil told CNN on Friday that they are working on a strategic oil release. A spokesman for China’s National Food and Strategic Reserve said China was “pushing ahead with work on crude oil release at the moment”.
The spokesperson declined to comment on whether the move was in response to a US request to work together to tackle the supply crisis.
Japanese Prime Minister Fumio Kishida confirmed on Wednesday that Japan will release oil from its state reserves.
“We have worked with the United States to stabilize the international oil market,” he told reporters, adding that the country would take action in a way that does not violate oil storage laws.
Kishida said stabilizing crude oil prices was crucial in helping the economy recover from the coronavirus pandemic. He said more details about the timing and amount of oil will be announced at a later date.
Japan had 388 million barrels of total strategic crude oil stocks as of June 2020, according to the US Energy Information Administration. It said that about 76% of these were government stocks and about 24% were commercial.
The prospect of the United States, and other major energy consumers, emitting emergency barrels has already contributed to lower oil prices, at least in the short term. After peaking at $ 85 a barrel at the end of October, the US oil price has fallen around 10%. This in turn has helped to cover rising petrol prices.
—CNN Beijing Office, Manveena Suri, Emiko Jozuka, Junko Ogura, and Yoonjung Seo contributed to this report.