Biden's release of oil reserves 'political', signals panic
Biden's policies is going to run the US oil reserves into the ground.
US President Joe Biden's decision to release additional oil from the Strategic Petroleum Reserve (SPR) before the midterms is a political move, and is not likely to lower the prices because it signals panic, according to a former commissioner in the Texas Railroad Commission speaking to Sputnik.
Biden, since November 2020, gave authorization for the withdrawal of over 200 million barrels from the SPR and may be releasing more in the winter if he had to.
"Absolutely," former Texas oil regulator Ryan Sitton said when asked if Biden's decision was political. "In fact... prices aren't dropping very much as a result of that announcement. In fact, what you're going to see is they're going to go up because as Biden signals a panic, that's going to fuel the market saying maybe there really is demand, there is supply problems."
Biden is reinforcing the narrative that there is a supply problem when he releases additional oil from the US strategic reserve, Sitton said, calling Biden's plan of releasing oil from the reserves a "bad strategy."
"When people start realizing how low the reserve is, and in contrast that demand is not shrinking with the recession, we're gonna see incredibly high oil prices," Sitton said.
The US emergency oil reserve is less than 2 million barrels away from reaching below the required benchmark, 400 million barrels, after around 3.5 million barrels were outflowed last week.
Last month, Biden announced his intention to put a 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.
Biden urges oil companies to stop "war profiteering", or suffer taxes
On Monday, the US President called on oil and gas companies to use their record profits to lower energy costs for US citizens and increase production - or, pay a higher tax rate. Biden is dealing with midterm elections and crippling energy prices.
Biden has recently criticized major oil corporations reeling in heaps of profit while Americans are paying substantial numbers to fill their vehicles with fuel.
His urgency comes after failed talks to get Saudi Arabia to increase oil production rather than cut it, with Biden warning Riyadh that he will have to reconsider his relationship with it after its decision.