President Biden's planned announcement to draw down from strategic reserves comes after Saudi Arabia-led cartel's decision had Washington saying Riyadh sided with Moscow and pledging consequences for supply cuts of 2 million barrels a day.
Biden releasing 15 million barrels would not cover even one full day’s use of oil in the US, according to Energy Information Administration. (AA Archive)
President Joe Biden will announce he's putting the final 15 million barrels on the market from a record release of US strategic oil reserves, with more releases possible if energy prices spike, a senior US official has said.
The new tranche of oil from the Strategic Petroleum Reserve will be "completing the 180 million barrel release authorised in the spring," in response to price hikes linked to Russia's offensive on Ukraine, the official said on Tuesday.
The order, which Biden will announce in a speech on Wednesday, means the president will be "making clear that the administration is prepared to undertake significant additional ... sales this winter if they are needed due to Russian or other actions disrupting global markets," the official added.
Biden will also say that the US government will restock the strategic reserve when oil prices are at or lower than $67 to $72 a barrel, an offer that administration officials argue will increase domestic production by guaranteeing a baseline level of demand even if prices fall.
#BREAKING
— Devon Heinen (@DevonHeinen) October 18, 2022
WH issues fact sheet saying #Biden will release 15M barrels of #oil from the US's Strategic Petroleum Reserve "to be delivered in December."
Also, Biden "intends to repurchase crude oil for the SPR when prices are at or below about $67-$72 per barrel."#Gas #GasPrices pic.twitter.com/v21EfoQju3
Democrats faring better
American Automobile Association reported that gas is averaging $3.87 a gallon, up from a month ago when falling prices at the pump suggested that the president and his fellow Democrats were faring better in surveys.
Biden has resisted the policies favoured by US oil producers.
Instead, he's sought to reduce prices by releasing oil from the US reserve, shaming oil companies for their profits and calling on greater production from countries in OPEC+ that have different geopolitical interests, said Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute.
Biden seeks to move away from fossil fuels entirely with a commitment to zero emissions by 2050.
The prospective loss of 2 million barrels a day — 2 percent of global supply — has had the White House saying Saudi Arabia sided with Russian President Vladimir Putin and pledging there will be consequences for supply cuts that could prop up energy prices.
The 15 million-barrel release would not cover even one full day’s use of oil in the US, according to the Energy Information Administration.
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(With input from news agency language)
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