Promised coordinated oil release from international petroleum reserves falls flat, as countries don’t play along with Biden

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Three weeks after President Joe Biden announced an internationally coordinated release of reserve oil to drive down prices for consumers, the other nations have not followed through.

On Nov. 23, Biden announced a major coordinated effort that included a release of 50 million barrels from the U.S. Strategic Petroleum Reserve, with China, Japan, South Korea, India, and the United Kingdom making similar releases from their reserves.
 
The U.S. has granted its first release of oil to ExxonMobil, according to Bloomberg News, and had another sale of 18 million barrels last week, but other nations have not acted.

“That’s starting to prompt some skepticism about whether they’ll go ahead at all, particularly after an outbreak of the Omicron virus variant led to a drop in global prices,” the news agency wrote.

The Energy Department said the U.S. release of oil will come from all four of the Strategic Petroleum Reserve sites according to a breakdown:

  • Up to 10 million barrels from Bryan Mound
  • Up to 10 million barrels from Big Hill
  • Up to 7 million barrels from West Hackberry
  • Up to 5 million barrels from Bayou Choctaw

SPR crude oil is supposed to be delivered to successful bidders between Dec. 16, 2021, and April 30, 2022, with priority given to bidders that can take the oil the earliest, the department said.  Successful bidders will then have to deliver the amount of crude oil they received, plus a premium volume defined in the contract, back to the same reserve site where the crude oil was released during Fiscal Years 2022, 2023, and 2024.  The longer it takes to return the crude oil back to the SPR, the more premium volume of crude oil will be required, the Energy Department said in its summary.

Companies interested in receiving crude oil through the exchange had to have submitted their bids no later than Dec. 6, and the contracts are to be awarded no later than Tuesday, Dec. 14.

No single commercial entity will receive an award for more than 10 million barrels unless all acceptable awards have been made and there are still barrels available, the Energy Department said.
 
Meanwhile Asian nations’ participation is lagging due to a buyers’ cartel, according to John Driscoll, chief strategist at JTD Energy Services. “They can’t afford to jeopardize their relationships with major producers to satisfy a U.S. president who’ll be up for reelection in a few years,” Driscoll told Bloomberg.
 
India pledged to release 5 million barrels, but it won’t say when, while Japan has stayed mum on when it will release some of its reserve oil. Bloomberg said South Korea is discussing volume and timing with partner countries, while a government spokesman from the U.K. said companies could do what they want to meet the terms of the agreement.

The Nov. 23 announcement has had little downward pressure on prices. Brent crude is selling for $75 a barrel, while West Texas Intermediate is at $71.67.

11 COMMENTS

  1. Raise your hand if you’re surprised. OF COURSE they didn’t do it. They think he’s a moron and are happy to make him look (more) foolish on the world stage.

  2. Looks like the rest of the world is just about as sick of this chump has his own country is. If I were him I wouldn’t venture too far from the White House. He might get lost.

  3. This is all a surprise to who..??…another failed move by Biden-Susan rice and Obama..!!!..as they continue to find ways to destroy America.

    • Thanks for mentioning Ms. Superior-to-You Susan Rice. I believe she is pulling the strings at the White House as well as writing and passing on the scripted questions to be read by friendly “journalists” at the staged press events.

  4. Typical leftist.
    .
    Creates a problem, then expects others to bail them out. And, blames them when they do not do so.

  5. Close All our U.S. Borders. Stop All Immigrants from Coming in to our Country. Don’t let anyone in. Close Your Legs. This will reduce Auto Accidents. lower air Pollution, and reduce Car and Airplane Noise. And Reduce our Need for Gasoline. – Henry Dec. 2021

  6. Seems like these other countries already figured out that self-immolation doesn’t work so well with solar panels and windmills and they’d rather we use our own oil if we are going to do so at the behest of a career politician in the latter stages of cognitive decline.

  7. If memory serves, Trump filled the SPR during his presidency when oil prices were at their lowest in over a decade. Now sleepy Joe is selling it off at today’s prices to try to raise his poll numbers. While at the same time accusing oil companies of…wait for it…price gouging. You can’t make this stuff up.

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