Biden will release 15 million barrels of oil reserves, and more
As a result of recent production cuts by OPEC+ countries, President Joe Biden will release 15 million barrels from the US Strategic Reserve Wednesday.
As part of a reaction to the recent production cuts announced OPEC+ countries, President Joe Biden will release 15 million barrels from the US Strategic Reserve Wednesday. He will also say that more oil sales are possible in the winter as his administration rushes ahead to next month’s midterm election.
Biden will make remarks Wednesday to announce drawdown from strategic reserve. Senior administration officials spoke Tuesday under anonymity to discuss Biden’s plans. This completes the 180 million barrels of oil Biden authorized in March. It was originally supposed to take six months. This has reduced the strategic reserve to the lowest level since 1984. The administration called it a “bridge” that would allow domestic production to increase. Now, the reserve contains approximately 400 million barrels oil.
Biden will also allow additional releases to be released this winter to help keep prices down. Administration officials did not provide details about how much the president would tap or how much they would like domestic and foreign production to rise to stop the drawdown.
Biden will also announce that the US government will replenish the strategic reserve if oil prices fall below $67-$72 per barrel. Officials claim that this offer will increase domestic production and guarantee a level of demand, which administration officials believe will help to boost domestic production. The president will also be criticized for the oil companies’ profits, a repeat of a wager made earlier this summer that shareholders would pay more attention to their criticisms than public condemnation.
This is Biden’s second major change. He has attempted to shift the U.S. away from fossil fuels in order to find alternative sources of energy that can supply the US and global supply.
The White House stated that Saudi Arabia has sided with Russian President Vladimir Putin, and promised to make sure there are consequences for any supply cuts that could support energy prices. According to the Energy Information Administration, the 15 million barrel release would not be enough to cover oil consumption in the US for one day.
Because it takes a month and half for the government’s notification of interested buyers, the administration could decide on future releases in a month.
Gas prices continue to be a political problem for Biden. AAA reports that the average price of gas is $3.87 per gallon. This is slightly lower than the previous week but still higher than a month ago. The president and his fellow Democrats saw a lot of momentum in the polls before the November elections, but the recent price rise has slowed that momentum.
Clear View Energy Partners, an independent research firm that focuses on energy, released Monday a report that suggested that the two states that could decide control over the evenly divided Senate — Nevada, and Pennsylvania — are sensitive about energy prices. Clear View Energy Partners’ analysis found that gas prices in 18 states rose more than the national average over the past month, which is a home to 29 “at-risk” House seats.
Even though voters desire cheaper gasoline, the weaker global economy is preventing expected supply gains. Last week, the U.S. government revised its forecasts downwards. It said that domestic companies would produce 270,000 less barrels per day in 2023 than it had predicted in September. The global production would be 600,000. barrels per day less than was forecasted in September.
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