10/18/2022
President Biden is releasing 15 million barrels of oil from the U.S. strategic reserve in an effort to lower gas prices after OPEC+ production cuts.
Biden will deliver remarks Wednesday to announce the drawdown from the strategic reserve, senior administration officials said Tuesday on the condition of anonymity to outline Biden’s plans. It completes the release of 180 million barrels over six months authorized by Biden in March. That has sent the strategic reserve to its lowest level since 1984 in what the president called a “bridge” until domestic production could be increased. The reserve now contains roughly 400 million barrels of oil.
Biden will also open the door to additional releases this winter in an effort to bring prices down, but administration officials would not detail how much the president would be willing to tap and the conditions under which he would do so.
Biden will also say that the U.S. 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 even if prices fall. 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 Biden, who has tried to move the U.S. past fossil fuels to identify additional sources of energy to satisfy U.S. 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% 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 U.S., according to the Energy Information Administration.
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