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Explained: How the release of SPR oil is more politics than economics

India agreed to release 5 mn bbl of crude oil from its SPR at an unspecified time

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China, Japan, and Korea are yet to announce a number, while the UK said companies can voluntarily release up to 1.5 mn bbl from reserves

4 min read Last Updated : Nov 25 2021 | 6:10 AM IST

The move by a US-led group of oil-consuming countries to release strategic petroleum reserves (SPR) in a concerted manner has more to do with Washington’s domestic priorities rather than an attempt to cool oil prices since the volumes offered are only a little over 1 per cent of the average Organization of the Petroleum Exporting Countries (Opec) output.

India has unwittingly got involved in Washington’s move to prop up US President Joe Biden’s sagging image before Senate polls next year, which may alienate key oil producers — Opec and Russia.

Crude oil prices, already at a seven-year high, rose after the US announced a plan to draw down as much as 50 million barrels (mn bbl) of crude oil from its SPR in the next several months in tandem with other oil-consuming nations, including China, Japan, South Korea, India, and the UK.