Biden plans to tap oil reserves to control gas prices

President Joe Biden is preparing to order the release of up to 1 million barrels a day of oil from the country’s strategic petroleum reserve in a bid to control energy prices

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 yet been finally determined, but could take several months. People spoke on condition of anonymity to preview the decision.

High oil prices have not translated into more production, which poses a challenge for Biden. The president saw his popularity plummet as inflation hit a 40-year high in February and the cost of oil and gasoline soared after Russia invaded Ukraine. Crude oil was trading at nearly $105 a barrel on Wednesday, up from around $60 a year ago.

However, oil producers have become more focused on meeting investor needs, according to a survey released last week by the Dallas Federal Reserve. About 59% of executives surveyed said investor pressure to maintain “capital discipline” in the face of high prices was the reason they stopped pumping, while less than 10% blamed government regulation.

The steady release from reserves would be a significant sum, nearly closing the domestic production gap compared 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 start of the Ukraine war, the US and 30 other countries agreed to an additional release of 60 million barrels from reserves, with half the total coming from the US

According to the Department of Energy, which manages it, the reserve held more than 568 million barrels of oil as of March 25.

News of the government’s planning was first reported by Bloomberg.

Associated Press writer Michael Balsamo contributed.

Leave a Reply

Your email address will not be published.