WASHINGTON: President Joe Biden will announce on Wednesday that he is 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 rise, a senior US official said. .
A new tranche of oil from the Strategic Petroleum Reserve “will complete the release of 180 million barrels approved in the spring,” a senior U.S. official said Tuesday, in response to rising prices linked to Russia’s invasion of Ukraine.
The order, which Biden will announce in a speech, means the president “will be making clear that the administration is prepared to sell significant surpluses this winter if Russian or global market disruptions occur.” They were necessitated by other initiatives,” the official added. .
The decision to draw the largest-ever draw into emergency oil reserves – usually held to respond to situations such as hurricane-related outages at oil refineries – calmed energy markets and the world’s largest economy. It was Biden’s ploy to protect him from the shocks of the war in Ukraine.
Major energy exporter Russia faced U.S. and European sanctions shortly after it invaded Ukraine in February, sending markets reeling. In addition, the Kremlin has threatened to use its leverage over energy supplies as an economic weapon against the West, which supports Ukraine’s fight to repel the invasion.
There are serious domestic concerns for Biden, with gasoline prices averaging more than $5 a gallon at one point, sparking anger across the country. While prices have moderated, inflation remains a major factor in Republican hopes of defeating Democrats in November’s midterm legislative elections.
The senior official, who spoke on condition of anonymity, stressed that the strategic petroleum reserve was not being used irresponsibly.
At the same time announcing a shortfall of 15 million barrels for delivery in December – and playing down the prospect of more coming – Biden is highlighting plans to replenish reserves as soon as prices reach around $67-72 a barrel. Will go, the official said.
“This is an important signal to producers that the SPR will be part of helping to moderate and stabilize price movements, not only when prices are rising but also when prices are falling,” he said. said
Reserves, meanwhile, are in good shape, the official said, with more than 400 million barrels. “It’s still a big amount” and “allows for additional opportunity, if we need to sell more.”
The official described the use of the SPR as a “fantastic” bridge out of the crisis moment, “playing an incredibly constructive role during a very difficult time.”
However, with “additional volatility” expected from Russia and production levels still not back to pre-Covid pandemic levels, stability is “not yet there.”
Asked whether the United States could take more radical action to curb fuel exports — something that would help lower domestic prices but hurt foreign buyers, including in allied countries — a The official refused to confirm or deny.
“We are putting all tools on the table,” said the official, who also spoke on condition of anonymity.
