President Joe Biden’s government may release up to 180 million barrels of oil in total, quoting people familiar with the situation. It’s possible that an official announcement will be made as soon as Thursday.
Bloomberg reported that the Biden administration is planning to release approximately 1 million barrels of oil per day from its reserves over several months to curb inflation.
According to Bloomberg, the US is also requesting that the International Energy Agency coordinate the release of oil reserves in other countries.
Oil futures sank as a result of the news, with Brent, the worldwide benchmark, and West Texas Intermediate, the US benchmark, both down around 4% at 9:17 p.m. EDT.
Inflation in the United States increased 7.9% year over year in February, the largest rate since January 1982. Oil prices have risen to 14-year highs globally.
According to the US Energy Information Administration, the US utilizes around 20 million barrels of petroleum every day. Gasoline, diesel fuel, and jet fuel are examples of petroleum products.
Since 2021, oil prices have been escalating. Demand has been outpacing output increases as pandemic restrictions have been eased and the global economy has improved, according to a January report from the US Energy Information Administration.
Since the United States and the United Kingdom have prohibited Russian imports, the price of oil has risen even further, despite the fact that neither country is a big user of Russian energy supplies. The European Union, which imports 40% of its natural gas and roughly 30% of its oil from Russia, is considering a ban as well.
As per International Energy Agency, Russia is the world’s third-largest oil producer, accounting for around 10% of global production.
The regular release of reserves would be a significant sum, narrowing the domestic production imbalance in comparison to February 2020, before the coronavirus triggered a sharp drop in oil output.