December is date Biden set to release 15mln oil barrels from US SPR

By Al Mayadeen English
Source: Agencies
19 Oct 2022 07:18

US President Joe Biden is expected to announce Wednesday that the United States intends to draw 15 million barrels of oil from strategic stocks in December.

President Joe Biden is again tapping the US strategic oil reserves in a bid to soothe energy markets. (AFP)

US President Joe Biden announces on Wednesday 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.

The new tranche of oil from the Strategic Petroleum Reserve will be "completing the 180 million barrel release authorized in the spring," in response to price hikes linked to Russia's military operation in Ukraine, a senior US official said Tuesday.

The directive, which Biden will deliver in a speech, means that the president will be "making clear that the administration is prepared to undertake considerable additional... sales this winter if they are needed due to Russian or other actions disrupting global markets," according to an official.

Biden's gamble to calm energy markets and protect the US economy from the imposed sanctions on Russia, which led to an energy crisis, was to take the largest-ever dive into emergency oil stockpiles, which are generally reserved for responding to crises such as hurricane-related shutdowns at oil refineries.

Major energy exporter Russia was hit with US and European sanctions soon after launching the military operation in Ukraine in February, causing turmoil in markets.

There are severe domestic issues for Biden, with gasoline prices averaging more than $5 a gallon at one point, creating widespread outrage. While prices have now leveled out, inflation remains the most important reason motivating Republicans' hopes of ousting Democrats in the November midterm elections.

This comes after a White House statement yesterday that revealed Biden's intentions to release barrels of oil from the country's emergency oil reserves to combat rising fuel costs.

According to a person familiar with White House talks, Biden is looking to lower gas costs before the upcoming midterm elections. "The administration has a small window ahead of midterms to try to lower fuel prices, or at least demonstrate that they are trying," the unnamed source said.

"The White House did not like $4 a gallon gas and it has signaled that it will take action to prevent that again," they added.

The AAA motor club said the average US gasoline prices were around $3.89 per gallon on Monday, up nearly 20 cents from a month ago and 56 cents from this time last year. Gasoline prices hit a record average above $5.00 in June.

Moreover, Biden said on Wednesday that there is a plan to refill the reserve as soon as prices hit around $67-72 a barrel, a senior official said.

This is "an important signal for producers that the SPR will be part of helping to moderate and stabilize price flows, not only when prices are going high but when prices are going low," he said.

The reserve, meanwhile, remains in good shape, the official claimed, with more than 400 million barrels. "That is still a large amount" and allows for "additional opportunity... if we need to do more sales."