US president Joe Biden is set to announce the release of 15 million barrels of oil from the US strategic reserve as part of a response to recent production cuts announced by OPEC+ nations.
Mr Biden will deliver remarks on Wednesday to announce the drawdown from the strategic reserve, senior administration officials said on Tuesday on the condition of anonymity to outline Mr Biden’s plans.
It completes the release of 180 million barrels authorised by Mr Biden in March that was initially supposed to occur over six months. That has sent the strategic reserve to its lowest level since 1984 in what the administration called a “bridge” until domestic production could be increased. The reserve now contains roughly 400 million barrels of oil.
Mr Biden will also open the door to additional releases this winter in an effort to keep prices down. But administration officials would not detail how much the president would be willing to tap, nor how much they want domestic and production to increase by in order to end the drawdown.
He will also say that the US government will restock the strategic reserve when oil prices are at or lower than $67 to $72 a barrel, an offer that administration officials argue will increase domestic production by guaranteeing a baseline level of demand.
Yet the president is also expected to renew his criticism of the profits reaped by oil companies — repeating a bet made this summer that public condemnation would matter more to these companies than shareholders’ focus on returns.
It marks the continuation of an about-face by Mr Biden, who has tried to move the US past fossil fuels to identify additional sources of energy to satisfy US and global supply as a result of disruptions from Russia’s invasion of Ukraine and production cuts announced by the Saudi Arabia-led oil cartel.
The prospective loss of 2 million barrels a day — 2 per cent of global supply — has had the White House saying Saudi Arabia sided with Russian president Vladimir Putin and pledging there will be consequences for supply cuts that could prop up energy prices. The 15 million-barrel release would not cover even one full day’s use of oil in the US, according to the Energy Information Administration.
The administration could make a decision on future releases a month from now, as it requires a month and a half for the government to notify would-be buyers.
