President Biden is expected to announce the release of 1 million barrels per day of oil from the strategic reserve, as gasoline prices climb because of the Ukraine crisis.
U.S. President Joe Biden may issue a proclamation to release oil reserves today, sources familiar with the matter said , as the White House announced he would give a speech on plans to curb the rise in gasoline prices due to rising oil prices. conflict in Ukraine.
The Biden administration is said to have been discussing the plan to release the oil reserves for weeks and has informed members of the International Energy Agency about it. The plan to release one million barrels of oil a day from the strategic oil reserve could be carried out in a few months if gasoline prices do not fall significantly.
Brent crude oil fell nearly 5% in Asia, to 106.12 USD/barrel after the news that the US was considering releasing its strategic oil reserves. However, the price of Brent oil is still much higher than 12 months ago, when it was only $62.74/barrel.
After banning imports of oil and other energy sources from Russia earlier this month, President Biden acknowledged the decision could expose Americans to higher gas prices.
On the eve of the midterm congressional elections, the US President is under pressure to deal with high gasoline prices, when Republicans repeatedly attack this issue. Polls in recent months have shown Biden’s approval ratings have dropped to a record , as residents complain about high gas prices and inflation.
In the past few months, the Biden administration has twice opened the strategic oil reserve to deal with soaring gasoline prices. The US first released 50 million barrels of oil reserves in November 2021 and then 30 million barrels this month.
The United States has four strategic oil reserves at the Freeport and Winnie locations in Texas and Lake Charles and Baton Rouge in Louisiana. Each warehouse has a number of salt caves (caves dug deep into the area with salt rock) up to 1,000 meters deep to store oil.
According to data from the US Department of Energy, these caverns are holding 568.3 million barrels of oil, much lower than the nearly 645 million barrels in 2019. Americans used an average of 20.5 million barrels per day in 2018. This means that the US strategic oil reserve is only enough to meet domestic demand for less than a month if supply is interrupted.
The decision to open a reserve oil depot will contribute to cooling the situation, but will not significantly reduce gasoline prices. After the US opened its oil reserves in November 2021, gasoline prices fell for only a short time before rising again at the end of January. Petrol prices have begun to decline in recent weeks.
After Russia launched a military campaign in Ukraine, the US and its allies also excluded the country from the SWIFT international payment system , abolished the most-favored nation status and prevented Russia from accessing advanced technologies and sanctions. officials and financiers of this country.
The US and the European Union (EU) on March 25 signed an agreement to supply more gas from Washington to Europe. The US said it will work with international partners, trying to secure at least 15 billion cubic meters of liquefied petroleum gas (LNG) for the EU market by 2022 and continue to increase in the future.