Business

In a first, Japan considers release of oil reserves after US request: Sources

Japan is considering the unprecedented release of state oil reserves after a request from Washington for coordinated action to combat soaring energy prices, three government sources with knowledge of the possible plan told Reuters.

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One of the sources said the government was looking into releasing from the portion exceeding the minimum amount required as a legal workaround. Japanese law permits the release of oil reserves in cases of a shortage or natural disasters but makes no mention of doing so to counter rising prices.

“We have no choice but to come up with something” after a request from the United States, another one of the sources told Reuters.

The sources declined to be identified because the plan has not been made public.

Japan has never released oil from its state reserves, while oil companies have done so during the 1991 Gulf War and following the 2011 earthquake and tsunami disasters.

Chief Cabinet Secretary Hirokazu Matsuno said on Monday nothing had been decided, while Prime Minister Fumio Kishida said on Saturday the government was in the process of considering what it could do legally.

The Biden administration made the unusual request to some of the world's largest oil-consuming nations – including China and India – to consider releasing oil from their strategic reserves after members of the Organization of Petroleum Exporting Countries and its allies repeatedly rebuffed its requests to speed up their production increases.

The Japanese government held 145 days' worth of daily petroleum consumption at the end of September, according to official data, well above the minimum 90 days required by law.

Private-sector reserves total 90 days' worth, also exceeding the minimum 70 days' requirement.

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Credit Suisse managers could face disciplinary action, Swiss regulator says

Swiss financial regulator FINMA said it was considering whether to take disciplinary action against Credit Suisse managers after Switzerland’s second largest bank had to be rescued last week by UBS.
FINMA President Marlene Amstad told Swiss newspaper NZZ am Sonntag it was “still open” whether new proceedings would be started, but the regulator’s main focus was on “the transitional phase of integration” and “preserving financial stability.”

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UBS agreed to buy Credit Suisse for 3 billion Swiss francs ($3.26 billion) in stock a week ago and to assume up to 5 billion francs in losses in a merger engineered by Swiss authorities during a period of market turmoil in global banking.
Credit Suisse on Sunday declined to comment on the FINMA President’s comments when asked by Reuters for a response.
Asked whether FINMA is looking into holding current Credit Suisse managers accountable for the collapse of Switzerland’s second-largest bank, Amstad said it is “exploring the options”.
“CS had a cultural problem that translated into a lack of responsi-bilities,” Amstad was quoted as saying by NZZ, adding: “Numerous mistakes were made over several years”.
FINMA had conducted six public “enforcement proceedings” against Credit Suisse in recent years, Amstad said.
“We have intervened and used our strongest instruments,” she said of its previous moves.
Amstad also defended Switzerland’s decision to write down 16 billion Swiss francs of Credit Suisse Additional Tier 1 (AT1) debt, to zero as part of the forced rescue merger.
“The AT1 instruments contractually provide that they will be fully written off in the event of a trigger event, in particular the granting of extraordinary government support,” Amstad said.
“The bonds were created precisely for such situations.”

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Aramco affirms support for China’s energy security

Saudi Arabian oil giant Aramco affirmed on Sunday its support for China’s long-term energy security and development, the company’s CEO Amin Nasser said in remarks made before a forum in Beijing.

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Nasser said that the company has partnerships and emission-reducing technologies with China to make lower carbon products.

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Kuwait Oil Co dealing with ‘limited fire’ at well where oil leak occurred last week

Kuwait Oil Company said on Sunday it is dealing with a “limited fire” that erupted at a well where oil leaked last week.
The company said in a statement that no injuries had been reported at the scene.
“The company’s operations in the area have not been affected,” the statement read.
Kuwait Oil Company declared a state of emergency last Monday due to an oil leak in the west of the country.

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