Delegates in the OPEC + alliance said that the group that includes OPEC and non-OPEC countries, led by Russia, may retreat from the policy of increasing oil production if there is coordination between the major oil-consuming countries to use their strategic reserves to increase oil supply, according to Bloomberg.
Government officials said India has become the latest major consumer to consider using up its oil stocks, which could help the US, Japan, and even China in a move to allay the inflation threat from rising energy costs.
The US is seeking to persuade consumers to release their reserves after OPEC+ refused to accelerate production increases earlier this month.
Delegates said that some OPEC countries are not satisfied with the use of the countries’ reserves of oil, which are used only in case of emergency, to calm the high prices this year.
OPEC+ countries, led by Saudi Arabia and Russia, are scheduled to meet next week to discuss plans to increase production during January.
Energy Market Volatility
Moreover, the International Energy Forum, based in the Saudi capital, Riyadh, indicated that OPEC + may change its plan to increase oil production if consuming countries increase supply through their oil reserves, or if the Corona pandemic worsens.
Meanwhile, Joseph McMonigle, Secretary-General of the International Energy Forum, expected, Monday, after a meeting with a Japanese Foreign Ministry official on the recent fluctuations in energy markets, that “OPEC + energy ministers will maintain their current plan in terms of gradually adding more supplies to the market.” But he added, “However, some unexpected external factors, such as the release of strategic oil reserves by major consuming countries, or new shutdowns in Europe may lead to a reassessment of market conditions.”
The comments come shortly after Japanese media announced that the government is preparing to release crude oil from its strategic stockpiles as part of a joint effort with the US to rein in high prices.