March 31, 2022 (MLN): The Biden administration is considering a plan to release about a million barrels of oil a day from US reserves over several months to combat rising gasoline prices and supply shortages following Russia’s invasion of Ukraine, people said. familiar with the matter, as reported by Bloomberg.
The total release could reach 180 million barrels, the people said, on condition of anonymity ahead of an official move.
The plan is accompanied by diplomatic pressure on the International Energy Agency to coordinate a global release by other countries. No final decision has been made on the worldwide release yet, but the White House could make an announcement about the US release on Thursday, one of the people said.
The report further added that West Texas Intermediate futures fell as much as 5.5% on Thursday on signs that the US was considering the release.
The White House said in a statement that President Joe Biden would speak on Thursday about his efforts to lower energy prices “and lower gas prices at the pump for American families,” blaming Russian President Vladimir Putin.
The statement was not expanded and White House spokesmen did not immediately comment.
“Joe Biden is under pressure to slow the pace of inflation – and cut gasoline prices in particular – with the US midterm elections approaching in November. Despite the government’s assurances last year that pump prices would fall by 2022, they have instead risen dramatically, with California gasoline currently costing nearly $6 a gallon,” the AAA auto club said.
According to the group, the national average is $4.24,
President Biden has already ordered two large volumes of oil from US reserves in the past six months — 50 million barrels in November and another 30 million barrels in March, following the invasion of Russia. The earlier releases had a muted effect on prices — average US pump prices rose after the government began discussing the initial release last fall.
At the same time, the Biden administration has also made efforts to persuade OPEC countries to increase production enough to lower US gasoline prices, the report said.
Although the oil in the stockpile has been sold or bartered about two dozen times, including to mitigate supply disruptions, reduce the deficit and offset federal spending, it has never been on this scale.
As of March 25, the reserve had 568 million barrels left, according to data from the Energy Department.
According to National Security Adviser Jake Sullivan, who said the issue was an “important topic of discussion” at a G.-7 meeting.
In Europe, Joe Biden also announced an agreement with the EU to supply the bloc with 15 billion cubic meters of liquefied natural gas this year, to reduce the continent’s reliance on Russian supplies.
EU countries have drawn up plans to gradually reduce their dependence on Russian energy exports. Russia, the world’s second largest exporter of crude oil, supplies the EU with more than 40% of its total gas consumption, and also accounts for 27% of oil imports and 46% of coal imports, according to EU figures .
Putin recently demanded that countries pay for gas in rubles. G-7 countries have said they won’t, because it would violate contracts. However, the threat has raised concerns that the Kremlin could retaliate by cutting supplies, one of the people said.
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