US President Joe Biden is poised to announce the release of 15 million barrels of oil from the US strategic reserve in response to recent OPEC+ output curbs.
Mr. Biden will give remarks on Wednesday to announce the withdrawal from the strategic reserve, according to senior administration officials who spoke on the condition of anonymity on Tuesday to discuss Mr. Biden’s intentions.
It completes the 180 million barrels authorized by Mr. Biden in March, which was originally scheduled to be released over a six-month period. This has reduced the strategic reserve to its lowest level since 1984, serving as a “bridge” until domestic production can be replenished. The reserve today holds around 400 million barrels of oil.
Mr. Biden will also allow for more releases this winter in order to keep costs down. However, administration officials refused to specify how much the president is prepared to tap or how much domestic and output must grow to finish the drawdown.
He will also suggest that the US government will replenish the strategic reserve when oil prices are at or below 67 dollars (£59) to 72 dollars (£63) per barrel, an offer that administration officials hope will boost domestic production by ensuring a baseline level of demand.
However, the president is anticipated to reprise his criticism of oil firms’ earnings, maintaining a wager made earlier this summer that public disapproval would mean more to these businesses than shareholders’ fixation on returns.
It is the continuation of Mr Biden’s pivot away from fossil fuels in order to seek other sources of energy to meet US and worldwide demand as a result of interruptions caused by Russia’s invasion of Ukraine and production restrictions declared by the Saudi-led oil cartel.
The potential loss of 2 million barrels per day — 2% of world production — has prompted the White House to declare that Saudi Arabia has sided with Russian President Vladimir Putin, guaranteeing that there would be repercussions for supply cuts that might prop up oil prices. According to the Energy Information Administration, the 15 million barrel discharge would not even cover one full day’s worth of oil consumption in the United States.
The administration might make a decision on future releases in a month and a half, as it takes the government a month and a half to inform potential purchasers.
