According to two people familiar with the decision, President Joe Biden is preparing to order the release of up to 1 million barrels of oil per day from the nation’s strategic petroleum reserve in an effort to control energy prices, which have risen as the US and its allies have imposed harsh sanctions on Russia over its invasion of Ukraine.
The announcement might come as early as Thursday, when Biden is scheduled to speak on his administration’s strategy to address increasing gas costs, according to the White House. The release’s duration has yet to be determined, although it might span several months. The individuals talked on the condition of anonymity in order to have a head start on the decision.
High oil prices haven’t enticed producers to increase output, posing a dilemma for Biden. Inflation hit a 40-year high in February, and the cost of fuel and gasoline increased when Russia invaded Ukraine, lowering the president’s popularity. Crude oil was about $105 a barrel on Wednesday, up from approximately $60 a year ago.
According to a poll conducted last week by the Dallas Federal Reserve, oil producers have been more focused on serving the demands of investors. Investor pressure to maintain “capital discipline” amid high prices was blamed by 59 percent of the CEOs polled, while government regulation was blamed by less than 10%.
The regular release of reserves would be a significant sum, narrowing the domestic production imbalance in comparison to February 2020, when the coronavirus triggered a sharp drop in oil output.
In November, the Biden administration stated that 50 million barrels from the strategic reserve will be released in collaboration with other nations. Following the start of the Ukrainian conflict, the US and 30 other nations agreed to release an extra 60 million barrels from reserves, with the US providing half of the total.
As of March 25, more than 568 million barrels of oil were retained in the reserve, according to the Department of Energy, which maintains it.
Bloomberg was the first to report on the administration’s plans.