President Joe Biden will announce the release of 15 million barrels of oil from the US strategic reserve on Wednesday, in a response to recent cuts in production announced by OPEC and other nations.
Washington: President Joe Biden will announce the release of 15 million barrels of oil from the US strategic reserve on Wednesday as in response to the recent cuts in production announced by OPEC plus nations. Biden will announce that additional oil sales could be possible in the coming winter months, as his administration tries to appear to pull out all stops prior to the midterm election next month.
Biden will make remarks on Wednesday, to announce the withdrawal from the reserve’s strategic reserve officials from the administration said Tuesday under the basis of anonymity to discuss Biden’s strategies. It is the final step in the release of 180 million barrels authorized through Biden in March. The release was originally planned to be released over a period of six months. This has brought the reserves to their lowest point since 1984, in what Biden called the “bridge” until domestic production could be raised. The reserve is now home to around 400 million barrels.
Biden is also expected to allow for more releases in the winter months to help keep prices low. However, administration officials will not reveal how much Biden would be willing to pay or what they’d like the domestic market and export products to rise to stop the decline.
Biden will also announce his administration will announce that the US government will replenish the reserve in case oil prices are lower than $67-$72 per barrel, an offer that administration officials believe will boost domestic production by ensuring a minimum amount of demand. However, the president is likely to renew his critique of the profit made from oil companies — making a repeat of a promise made this summer that public rebuke is more important to these firms than the shareholders’ attention to profits.
This is the result of a change in direction by Biden who has been trying to shift forward with the U.S. past fossil fuels in search of alternative sources of energy to meet the US and global energy needs due to the disruptions caused by Russia’s invasion of Ukraine and the announcement of production cuts through the oil cartel led by Saudi Arabia.
The potential loss of 2 million barrels per day — about 2 percent of the global supply was a source of concern for an impact on the White House saying Saudi Arabia is on board in support of Russian Vladimir Putin. Vladimir Putin and pledging there are consequences to supply cuts that could drive up the cost of energy. The 15 million barrels released would not even cover a full day’s usage for oil within the US as per the Energy Information Administration.
The administration could take the decision regarding future releases within a month from today since it will take at least a month and a half in order for the government to send out notifications to potential buyers.
Biden continues to face political hurdles due to the high cost of gasoline. AAA reports that gasoline is currently at $3.87 per gallon. It’s a slight decrease over the last week however, it’s higher than one month ago. The recent price hike has slowed the momentum that President Obama and other Democrats had been gaining on the polls in advance of Election Day in November.
An analysis released on Monday from ClearView Energy Partners, an independent energy research company based in Washington found that two states that may be able to decide the fate of the divided Senate -two states – Nevada and Pennsylvania — are prone to the price of energy. The study found that prices for gas over the last month have risen over the average for all 18 states, including those where 29 seats are “at risk” House seats.
Although voters may want to pay less for gasoline, the expected increases in supply have not been realized due to a slowing global economy. It was reported that the U.S. government last week adjusted its forecasts downward for domestic companies, stating that they produced 270,000 fewer barrels of oil every day from 2023 than predicted in September. The global production will be 600,000 barrels per day less than the forecast for September.
The real mathematics that Biden must consider Biden has to do with the fact that production of oil hasn’t yet reached the pre-pandemic levels of around 13 million barrels daily. This is about 1 million barrels just shy of that. The oil industry wants the administration to allow additional federal land to drill, allow pipeline construction, and reverse recent decisions to raise corporate taxes. Administration counters by saying that the industry has a huge amount of federal leases unutilized and that permits for new leases would require years to develop oil, with no effect on the price of gas at present. Environmental groups, in turn, have urged Biden to honor his campaign pledge to stop any new drilling on federal land.
Biden has not embraced the policies that are favored by US energy producers. Instead, he’s aimed to lower costs by releasing oil from the reserve in the US reserve, criticizing oil companies for their profits, and insisting on more production from nations in OPEC+, which have distinct geopolitical interests, according to Frank Macchiarola, senior vice for policy, economics, and regulatory matters of the American Petroleum Institute.
“If they continue to offer the same old so-called solutions, they’ll continue to get the same old results,” Macchiarola told the AP.
Since fossil fuels are responsible for the emission of carbon dioxide, Biden is seeking to eliminate them completely and has pledged to eliminate emissions in 2050. When he was discussing the commitment one year ago following the G-20 leaders from both nations held a meeting in Rome Biden said he would still like to reduce gas prices since with “$3.35 a gallon, it has a profound impact on working-class families just to get back and forth to work.”
Since Biden has spoken of the pain of fuel at $3.35 per gallon, and his desire to cut costs, the cost has increased by 15.5 percent.