Biden to Tap Into U.S. Oil Reserves to Combat Rising Gas Prices - The New York Times

The move appeared to underwhelm oil traders, who had been expecting President Biden to announce a larger release from America’s Strategic Petroleum Reserve, which is the biggest in the world with 620 million barrels.

The price of a barrel of crude oil actually rose after the announcement in global trading, although administration officials said prices could fall in coming weeks.

Biden faces, both politically and economically, in his efforts to react to the fastest increase in U.S.

Earlier on Tuesday, administration officials said Mr.

Biden had ordered the Energy Department to tap into 50 million barrels of crude in the Strategic Petroleum Reserve.

Traders had been expecting 100 million barrels, said Richard Bronze, head of geopolitics at Energy Aspects, a market research firm in London.

Britain said it would authorize the release of up to 1.5 million barrels and India said it would release five million.

The concerted effort, the largest ever for a release of strategic reserves across multiple countries, is meant to address fluctuations in supply and demand for oil, administration officials said.

While it could prompt those countries to increase production, it could just as easily push the cartel to restrict supply further and push global prices higher.

In recent monthly meetings, OPEC Plus has stuck with plans to increase production by a relatively modest 400,000 barrels a day each month.

Biden looked for ways to show he was trying to tame prices, including asking the Federal Trade Commission to investigate possible illegal conduct by large oil companies in the national gasoline market.

Most experts believe a release could eventually lower prices modestly, but only for a short time because oil prices are set globally and world consumption averages roughly 100 million barrels a day.

Obama’s administration led the most recent coordinated global release of oil reserves in June 2011, when the United States and 27 other nations released 60 million barrels of reserves to replace lost production from Libya that was halted by political turmoil in the North African country.

To combat soaring prices and their effects on inflation, President Biden ordered the release of oil from the nation’s emergency stockpile.

Biden administration officials said the coordinated effort announced on Tuesday would come in two parts: a loan of 32 million barrels over several months to refineries and the accelerated sale of 18 million barrels, which has already been congressionally authorized.

Britain will be allowing companies to voluntarily release their oil reserves.

If every company takes advantage of the option, it would amount to 1.5 million barrels, a British government representative said2

Helima Croft, head of global commodities at RBC Capital Markets, an investment bank, said OPEC Plus could choose to respond at its next meeting, on Dec.

“If OPEC wants to be obstructionist, they can blunt the impact” of the oil release, she said, by not approving the next monthly 400,000 barrels-a-day production increase at the meeting.

McCarthy said the decision to tap America’s strategic reserves “is a crass political ploy just 3 days ahead of Thanksgiving.”.