In a statement issued Tuesday, the White House said China, Japan, India, South Korea and the United Kingdom would join the initiative following weeks of discussions to formulate a plan to arrest price hikes.
According to the International Energy Agency, which monitors global oil supplies on behalf of the world’s leading economies, there have been three coordinated stock releases since the agency was founded: before the Gulf War in 1991, after Hurricanes Katrina and Rita damaged oil facilities in the Gulf of Mexico in 2005, and in response to supply disruption caused by war in Libya in 2011.
“We recognize that the rise in oil prices is placing a burden on consumers and has added to inflationary pressures during a period when the economic recovery remains uneven and faces a range of risks,” 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 at supply of oil being artificially adjusted below demand levels by oil producing countries, leading to rising prices and negative attendant 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 fiscal burden on the government, [they] were taken in order to provide relief to citizens,” it added.
The South Korean government said in a statement that the amount and timing of its oil reserves release would be decided through consultation 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’s proposal to release oil reserve after taking into consideration of the need for international cooperation to recent sharp rise in international oil prices, the importance of the [South Korea]-US alliance, and the participation of major countries,” it said in a statement from its ministry of foreign affairs.
The UK government said in a statement it will allow companies to “voluntarily release” oil reserves of up to 1.5 million barrels, in what it called “a sensible and measured step to support global markets as we emerge from the pandemic.”
“As we’ve said before, we will work closely with our international partners to do what we can to support the global economy through the transition following the pandemic,” a government spokesperson said.
The world’s second largest economy and biggest importer of oil told CNN on Friday it was working on a strategic oil release. A spokesperson for China’s National Food and Strategic Reserves Administration said China was “pushing forward with crude oil release-related work 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 crunch.
Japanese Prime Minister Fumio Kishida on Wednesday confirmed that Japan would release oil from its state reserves.
“We have been cooperating with the United States to stabilize the international oil market,” he told reporters, adding that the country would make the move in a way that does not run afoul of oil stockpiling laws.
Kishida said stabilizing crude oil prices is crucial to helping the economy recover from the coronavirus pandemic. He said more details about the timing and the amount of oil will be announced at a later time.
Japan had 388 million barrels of total strategic crude oil stocks as of June 2020, according to the US Energy Information Administration. It said about 76% of those were government stocks and about 24% were commercial.
The prospect of the United States, and other big energy consumers, releasing emergency barrels has already helped to deliver lower oil prices, at least in the short term. After topping $85 a barrel in late October, US oil prices have declined about 10%. That in turn has helped put a lid on surging gasoline prices.
—CNN’s Beijing bureau, Manveena Suri, Emiko Jozuka, Junko Ogura and Yoonjung Seo contributed to this report.