Biden plans to tap oil reserve to control gas prices

President Biden is preparing to order the release of up to 1 million barrels of oil per day from the country’s strategic oil reserve, according to two people familiar with the decision. It is an attempt to control rising energy prices as the US and its allies have imposed heavy sanctions on Russia for its invasion of Ukraine.

The announcement could come as early as Thursday, when the White House says Biden plans to comment on his administration’s plans to combat rising gas prices. The duration of the release has not been specified, but it could take several months. People spoke on condition of anonymity to advance the decision.

High oil prices have not led to more production, which is a challenge for the president. It has seen its popularity plummet as inflation peaked at 40 in February and the cost of oil and gas rose after Russia invaded Ukraine. Crude oil was trading at about $ 105 a barrel on Wednesday, up from about $ 60 a year.

However, oil producers have focused more on meeting the needs of investors, according to a survey released last week by the Dallas Federal Reserve. About 59% of executives surveyed said pressure from investors to preserve “capital discipline” amid high prices was the reason they were not pumping anymore, while less than 10% blamed government regulation.

The constant release of reserves would be a significant amount and would close the national production gap with respect to February 2020, before the coronavirus would cause a sharp decline in oil production.

The Biden administration announced in November the release of 50 million barrels from the strategic reserve in coordination with other countries. Following the start of the Ukrainian war, the United States and 30 other countries agreed to release an additional 60 million barrels of reserves, with half of the total coming from the United States.

According to the Department of Energy, which manages it, on March 25 more than 568 million barrels of oil were kept in reserve.

The news of the administration’s planning was first reported by Bloomberg.

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• Joe Biden
• Gas prices