India, US to release 5mn barrels of oil reserves to challenge OPEC grip: Report

India plans to sell about 5 million barrels of oil from its strategic petroleum stockpiles as part of a coordinated move with the US and other nations, according to a person familiar with the situation.

The release may come within a week, and India and other countries may look at selling more crude later, the person said, asking not to be identified as the matter is private. Oil will be supplied to refineries located near where the inventories are held, such as those owned by Mangalore Refinery and Petrochemicals Ltd. and Hindustan Petroleum Corp., the person said.

The volume of the initial release is about a day’s worth of India’s crude consumption, but its significance may be more symbolic. It shows major oil consumers are willing to work together to challenge the OPEC alliance’s sway over global markets. The United Arab Emirates said Tuesday there was no need for OPEC to raise production any faster, despite pressure from major consumers. 

President Joe Biden is preparing to officially announce a coordinated release in conjunction with India, Japan and South Korea as soon as Tuesday. China said last week that it was also readying a sale from its national stockpiles.

The US began lobbying major Asian oil consumers to tap their reserves after OPEC rebuffed requests to return supply to the market more quickly. It’s unprecedented for big oil importers to act together like this when there’s no emergency or acute supply disruption. 

The Biden administration is under rising pressure to bring down domestic gasoline prices to help curb accelerating inflation. OPEC delegates have said the releases are not justified given market conditions, and have warned the group may have to reconsider plans to add more oil production when it meets next week.