“Today, the President is announcing that the Department of Energy will make available releases of 50 million barrels of oil from the Strategic Petroleum Reserve to lower prices for Americans and address the mismatch between demand exiting the pandemic and supply,” the White House said in a statement.
The White House says that the crude will be released in two ways: 32 million barrels will be released over the next several months and the Strategic Petroleum Reserve will eventually be replenished with the same amount, while 18 million barrels “will be an acceleration into the next several months of a sale of oil that Congress had previously authorised.”
Biden “stands ready to take additional action” if necessary, according to the White House.
It’s predicted that the collective move to release oil from the strategic release will anger OPEC+, which earlier rejected Biden’s call to release crude reserves to curtail rising prices.
Biden’s decision comes as gasoline prices in the United States are soaring, averaging about $3.40 a gallon, more than double what it was a year ago, according to the American Automobile Association.
“This culminates weeks of consultations with countries around the world, and we are already seeing the effect of this work on oil prices”, the White House noted. “Over the last several weeks as reports of this work became public, oil prices are down nearly 10 percent.”
Back in early November, OPEC+ members agreed on sticking to plans to raise oil output by 400,000 barrels per day from December, defying Biden’s calls to significantly boost production.
The oil market has been heavily impacted by the coronavirus pandemic, with producers being forced to cut oil production due to lack of demand.
