US-Saudi tentions: Biden to release 15 million barrels from US oil reserves
According to a senior US official, President Joe Biden will announce on Wednesday that he is selling the remaining 15 million barrels from a record-breaking release of US strategic oil reserves, with additional releases likely if energy prices rise.
In response to price increases brought on by Russia’s invasion of Ukraine and a cut by OPEC members despite Washington’s pressure on Saudi Arabia, a new batch of oil from the Strategic Petroleum Reserve will be “completing the 180 million barrel release authorised in the spring,” a senior US official said on Tuesday.
The president will be “making clear that the administration is prepared to conduct considerable more… sales this winter if they are needed due to Russian or other measures disrupting global markets,” the official continued. Biden will announce the order in a speech.
Biden‘s gambit to calm energy markets and insulate the biggest economy in the world from the shocks of the Ukraine war was the decision to use the largest ever portion of the emergency oil reserves, which are typically kept for responding to situations like hurricane-related shutdowns at oil refineries.
Shortly after its invasion of Ukraine in February, major energy exporter Russia was subject to US and European sanctions, which caused havoc on the markets. Additionally, the Kremlin has threatened to use its economic influence over energy supplies against the West, which is aiding Ukraine in its struggle to reject the invasion.
Gas prices that once averaged more than $5 per gallon caused outrage across the country and are a major domestic worry for Biden. Inflation continues to be the key element fueling Republican aspirations of ousting the Democrats in November’s midterm legislative elections, despite prices having since moderated.
Reserves in good condition
The senior official emphasised that the Strategic Petroleum Reserve was not being utilised carelessly while speaking on the condition of anonymity.
Biden is spotlighting a strategy to refill the reserve as soon as prices reach about $67-72 a barrel at the same time as announcing the 15 million barrel drawdown for delivery in December — and hinting that there may be more to come, the official said.
According to him, this sends “an essential signal to producers that the SPR will play a role in helping to regulate and stabilise price movements, not only when prices are going up but also when prices are going down.”
The official stated that the reserve, which has more than 400 million barrels, is still in good condition. That is still a sizable sum and provides “extra opportunity… if we need to do more sales,” according to the speaker.
The official praised the SPR use for acting as a “great” way out of a dilemma and for being “very productive” during a difficult time.
Stability is “not quite there yet,” though, since “further volatility” is anticipated from Russia and production levels have not yet returned to their pre-Covid pandemic levels.
An official declined to affirm or deny when asked whether the United States could take the more drastic step of restricting petroleum exports, which would help lower domestic costs but affect foreign buyers, particularly in allied countries.
The person, who also spoke on the condition of anonymity, added, “We’re keeping all options on the table.”
However, Republicans are attempting to portray Biden as a manipulator of the oil reserves with the midterm elections only three weeks away in order to generate support for his Democrats.
House Republican Byron Donalds tweeted that the action is not intended to calm the markets but rather “to try and save his party from getting walloped in the Midterm elections.” He added that “Biden’s mismanagement of our strategic oil reserves is a severe threat to national security.”
The Biden administration since came did every possible way against Saudi thinking that he can do without Saudi but when time he realizes the needs of Saudi but relation between countries doesn’t work one way street
— Khaled jaber (@Khaledj73102966) April 3, 2022
