Biden to announce release of record 180m barrel of oil from US strategic stockpile to ease domestic prices, global supply

WASHINGTON: US President Joe Biden is expected to announce plans on Thursday to release a million barrels of oil a day from America‘s strategic petroleum reserve (SPR) over the next six months to ease record gas prices in the country and mitigate global supplies.
The release of 180 million barrels of oil, in itself a record, comes on top of the 50m barrels released last November, followed by a further 30 million barrels on March 1, with other allies and partners pitching in with an additional 30 million barrels.
The action did little to push back gas prices in America, which stand at a nationwide average of $ 4.17 a gallon in March, with some areas recording over $ 6 a gallon (approx Rs 120/liter)
The United States uses roughly 20 million barrels of oil a day, a fifth of the global consumption of 100 million barrels a day.
Aimed also at easing global supply, the release will come from the country’s emergency stockpile, which has a total capacity of about 714 million barrels, and is currently said to have 550 million barrels, about a month’s supply of US consumption.
Established after the 1973-74 oil embargo by Arab members of OPEC, the strategic reserve, located in Texas and Louisiana in large underground caverns, has been tapped in emergencies such as the Gulf War in 1991 and the aftermath of Hurricane Katrina in 2005 when much of oil infrastructure along the Gulf of Mexico was damaged.
But never to the extent now being proposed.
The emergency release follows Washington’s failure to convince OPEC members to crank up output and supplies, which have tightened on account of the war in Ukraine and the subsequent sanctions on Russia, and the gradual return of normalcy disrupted by the pandemic.
The price of gas has become a potent political and electoral issue in the US ahead of the November mid-term election. Republicans are blaming President Biden and Democrats for the rapid escalation in prices, in part because of their emphasis on moving away speedily from fossil fuels and constraining domestic exploration and production.
Signs saying ‚ÄúPain at the pump? Vote Republican!” and “I did that!” stickers with a Biden photo are being posted on cars and at gas pumps, where drivers are paying upwards of $ 5 a gallon in some states.
Biden has blamed Russia’s invasion of Ukraine for the high prices.”Make no mistake: The current spike in gas prices is largely the fault of Vladimir Putin,” he said earlier this month.
Gas prices had breached $ 4 a gallon twice before, in 2008 and 2012. This, taking into account inflation, suggests it is at similar levels in the US, and well below European prices, where it is upward of $6 per gallon, and the price in India, where it is approximately $ 5 per gallon (roughly Rs 100/liter).
Washington has failed to convince oil producing Gulf allies, notably the UAE and Saudi Arabia, to increase their output to make up for market shortfalls.

Source link

About the author

Divyansh Singh

Talks about #technology #innovation #investing and #business.

View all posts

Leave a Reply

Your email address will not be published. Required fields are marked *