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, according to two people familiar with the decision, in a bid to rein in energy prices that have soared as the United States and its allies have imposed harsh 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 gasoline prices. The duration of the measure has not been finalized, but it could last several months.
High oil prices have not prompted more production, creating a challenge for Biden. The president has seen his popularity sink as inflation hit a 40-year high in February and the cost of oil and gasoline rose after Russia invaded Ukraine. Crude oil was trading at nearly $105 a barrel on Wednesday, down from $60 a year ago.
Still, oil producers have become more focused on meeting investors’ needs, according to a survey released last week by the Dallas Federal Reserve. Some 59% of executives surveyed said pressure from investors to preserve “capital discipline” amid high prices was the reason they weren’t pumping more, while less than 10% blamed regulation. governmental.
The steady release of reserves would be a significant sum and close to closing the domestic production gap relative to February 2020, before the coronavirus caused a sharp drop in oil production.
The Biden administration announced in November the release of 50 million barrels from the strategic reserve in coordination with other countries. And after the Ukraine war began, the US and 30 other countries agreed to release an additional 60 million barrels of stockpiles, with half of the total coming from the US.
According to the Department of Energy, which administers it, as of March 25, more than 568 million barrels of oil were kept in the reserve.
Bloomberg first reported on the administration’s planning.
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