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Biden to release 15 million barrels of US oil reserves: official

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Washington (AFP) – President Joe Biden will announce on Wednesday that he is bringing the last 15 million barrels to market from a record release of U.S. strategic oil reserves, with further releases possible if energy prices rise, said a senior US official.

The new tranche of oil from the Strategic Petroleum Reserve “will complete the release of 180 million barrels authorized in the spring”, in response to price increases linked to the Russian invasion of Ukraine, a senior US official said on Tuesday.

The order, which Biden will announce in a speech, means the president “will make it clear that the administration is prepared to undertake significant…additional sales this winter if needed due to Russian or other actions disrupting world markets”. official added.

The move to make the biggest-ever drawdown on emergency oil reserves — typically set aside to respond to situations like hurricane-related oil refinery shutdowns — was Biden’s bet to calm US markets. energy and protect the world’s largest economy from the shocks of war in Ukraine.

Major energy exporter Russia was hit by US and EU sanctions soon after it invaded Ukraine in February, causing market turmoil. In addition, the Kremlin has threatened to use its influence over energy supply as an economic weapon against the West, which supports Ukraine’s struggle to repel the invasion.

For Biden, there are serious national concerns, with gasoline prices at one point averaging over $5 a gallon, angering the entire country. Although prices have since moderated, inflation remains the most important factor fueling Republican hopes of defeating Democrats in November’s midterm legislative elections.

Reserves in good condition

The senior official, who spoke on condition of anonymity, stressed that the strategic petroleum reserve was not being used irresponsibly.

Along with announcing the drawdown of 15 million barrels for delivery in December — and signaling the possibility of more to come — Biden highlights a plan to fill the reserve as soon as prices hit around $67-$72 on Monday. barrel, the official said.

It’s “an important signal to producers that the SPR will help moderate and stabilize price flows, not only when prices go up but also when prices go down,” he said.

The reserve, meanwhile, remains in good shape, the official said, with more than 400 million barrels. “It’s still a significant amount” and it allows “additional opportunities … if we have to make more sales”.

The official described the use of the SPR as a “brilliant” bridge out of a moment of crisis, playing “an incredibly constructive role during a very difficult time”.

However, with “additional volatility” expected from Russia and production levels still not back to pre-Covid levels, stability is “not quite there yet”.

Asked if the United States could take the most drastic step of curbing fuel exports – which would help lower domestic prices but hurt foreign buyers, including in allied countries – an official declined to confirm. or deny.

“We are keeping all the tools on the table,” said the official, who also spoke on condition of anonymity.