Biden ready to release more oil reserves to the cool markets says U.S. Energy Representative
- Amos Hochstein told reporters, on Monday, “This is a tool that was available to us and will be available again”
- Energy specialists are evaluating the success of a US-led agreement to release millions of barrels of oil
- OPEC and allied non-OPEC producers have repeatedly defied US efforts to raise crude supply to stifle increasing petrol prices, and the release will come from strategic reserves
Releasing more Oil Barrels for the Cooler Market
According to the US State Department‘s senior advisor for global energy security, President Joe Biden’s administration is prepared to release additional barrels of oil from strategic reserves to meet the growing demand.
Energy specialists are evaluating the success of a US-led agreement to release millions of barrels of oil. This follows OPEC+ producers’ refusal to increase output to assist cool the market.
“As a result, we have more flexibility to do this again if the need arises in the future.” I believe we wanted to do something significant for the market. And it also had the capability and flexibility to allow us to do it again if the American economy required it.”
On Nov. 23, Biden announced the first-ever coordinated oil release between the United States, India, China, Japan, South Korea, and the U.K.
The US will release 50 million barrels from its Strategic Petroleum Reserve under the plan. In the following months, 32 million barrels will be transferred. Furthermore, the sale of 18 million barrels will be accelerated from a previously approved transaction.
OPEC and non-OPEC producers, collectively known as OPEC+, have consistently defied US demands to increase petroleum supplies to stifle rising fuel costs.
The group will meet again on Thursday, led by OPEC kingpin Saudi Arabia and non-OPEC leader Russia, to consider the next phase of production policy.
There is little indication that the group wants to deviate from its existing output strategy.
Challenges in Oil Prices
Following the greatest one-day drop since April last year late last week, oil prices climbed on Monday.
On Monday, international benchmark Brent crude futures were trading at $74.60 a barrel, up more than 2.5 percent for the day. Meanwhile, West Texas Intermediate futures in the United States were trading at $70.62, up 3.6 percent.
Following the discovery of the omicron COVID variant, several countries imposed travel restrictions on Friday. Some energy market participants are concerned that travel limits would be reinstated, lowering fuel consumption.
Analysts say Monday’s bounce in oil prices indicates that last week’s drop was exaggerated, however, it’s unclear how demand will be affected.
It will take weeks, according to the United Nations’ health organization, to figure out how the mutation would influence diagnostics, medicines, and immunizations.