Japan has Followed the US in Announcing the Sale of Part of its Oil Reserves
OREANDA-NEWS. Japanese authorities will sell some oil reserves from its strategic reserves, Prime Minister Fumio Kishida said. A day earlier, US President Joe Biden also announced the sale of 50 million barrels of oil from the country's strategic reserve.
"We have decided to go along with the United States and sell some of the national oil reserves in a way that does not violate the current oil stockpile law,"- Kishida said.
According to the premier, the main purpose of selling the reserves is to stabilise petrol prices. However, he did not specify the volume of reserves to be sold or the timing of this process.
A day earlier, Nikkei reported, citing sources, that following the US decision, the Japanese government intends to sell about 4.2 million barrels of oil. The tender for the sale will take place before the end of the year, the publication specified.
According to the Natural Resources and Energy Agency of Japan, as of the end of September the strategic oil reserves in the country amounted to 145 days of daily consumption. Meanwhile, the statutory limit is 70 days or more.
On 18 November, Reuters reported that the US had asked several Asian countries to release some of their strategic oil reserves in order to put pressure on OPEC to lower prices. According to the agency, the Biden administration asked the major consumers - Japan, South Korea, India and China - to do so.
Earlier, in late October, Biden had called for OPEC+ to increase oil production. He said petrol prices in the US were rising as a result of oil production constraints. "The rising cost of petrol is hitting working class families. They need petrol so that they can take their children to school, so that school buses can run," he pointed out.
Nevertheless, OPEC+ members did not increase oil production and decided to stick to existing agreements. The organisation also confirmed the validity of the mechanism to compensate for previously unreduced production until the end of 2021.
Despite Biden's yesterday's decision to 'unseal' the strategic fuel reserves, the price per barrel of Brent did not decline and even went up by $1.
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