WASHINGTON, DC — President
Joe Biden will announce Wednesday he’s putting the final 15
million barrels on the market from a record release of US strategic oil
reserves, with more releases possible if energy prices spike, a senior US
official said.
اضافة اعلان
The new tranche of
oil from the Strategic Petroleum Reserve will be “completing the 180 million
barrel release authorized in the spring,” in response to price hikes linked to
the Ukraine war, a senior US official said Tuesday.
The order, which
Biden will announce in a speech, means the president will be “making clear that
the administration is prepared to undertake significant additional ... sales
this winter if they are needed due to Russian or other actions disrupting
global markets,” the official added.
The decision to
make the biggest ever dip into the emergency oil reserves — usually kept for
responding to situations such as hurricane-related shutdowns at oil refineries
— was Biden’s gambit to calm energy markets and shield the world’s biggest
economy from
Ukraine war shocks.
Major energy
exporter Russia was hit with US and European sanctions soon after it invaded
Ukraine in February, causing turmoil on markets. In addition, the Kremlin has
threatened to use its leverage over energy supplies as an economic weapon
against the West, which supports Ukraine’s fight against Russia.
For Biden there
are serious domestic concerns, with gasoline prices at one point averaging more
than $5 a gallon, causing nationwide anger. While prices have since moderated,
inflation remains the biggest factor driving Republican hopes of defeating the
Democrats in November’s midterm legislative elections.
Reserves in good
shape
The senior official, who spoke on condition of anonymity, stressed that
the Strategic Petroleum Reserve was not being used irresponsibly.
At the same time
as announcing the 15-million-barrel drawdown for delivery in December — and
flagging the possibility of more to come — Biden is highlighting a plan to
refill the reserve as soon as prices hit around $67–72 a barrel, the official
said.
This is “an
important signal for producers that the SPR will be part of helping to moderate
and stabilize price flows, not only when prices are going high but when prices
are going low,” he said.
The reserve,
meanwhile, remains in good shape, the official said, with more than 400 million
barrels. “That is still a large amount” and allows for “additional opportunity
... if we need to do more sales.”
The official
described the SPR use as a “brilliant” bridge out of a crisis moment, playing
“an incredibly constructive role through a very challenging time period.”
However, with
“additional volatility” expected from Russia and production levels still not
back to pre-COVID-19 pandemic levels, stability is “not quite there yet”.
Asked whether the
US could take the more radical measure of curbing fuel exports — something that
would help reduce domestic prices but hurt foreign buyers, including in allied
countries — an official declined to confirm or deny.
“We’re keeping all
tools on the table,” the official, who also spoke on condition of anonymity,
said.
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