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Biden has been using oil reserves for six months to control gas prices

WASHINGTON “President Joe Biden has ordered the release of 1 million barrels of oil a day from the National Strategic Oil Reserve for six months,” the White House said Thursday, in a bid to control energy prices soaring after the United States and allies imposed harsh sanctions on Russia. and in Ukraine.

Biden made the official announcement later Thursday in remarks about his administration’s plans to fight rising gas prices.

The White House says Biden will also call on Congress to impose financial sanctions on oil and gas companies that lease public land but do not produce energy.

THIS IS AN UPDATED NEWS. The previous history of the AP follows below.

WASHINGTON (AP) – President Joe Biden is preparing to order the release of up to 1 million barrels of oil a day from the National Strategic Oil Reserve, according to two people familiar with the decision, in a bid to control energy prices as US and allies jumped imposed severe sanctions on Russia for its invasion of Ukraine.

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The announcement is expected on Thursday, when Biden will make remarks about his administration’s plans to combat rising gas prices. The duration of the publication has not been finalized, but may last several months. People spoke on condition of anonymity to see the decision.

Biden’s expected move shows that oil remains a key vulnerability for the United States at home and abroad. Higher prices have crushed Biden’s endorsement in the domestic market, while adding billions of dollars to Russia’s military chest as it wages war against Ukraine. Releasing reserves would create pressure that could lower oil prices, although Biden has already twice ordered a release from strategic reserves without causing significant changes in oil markets.

Part of Biden’s conundrum is that high prices have not caused a significant jump in oil production. The planned launch is a way to increase deliveries. Markets reacted quickly, with crude oil prices falling more than 3% on Thursday morning to approximately $ 104 a barrel. However, oil rose from about $ 60 a year ago as supplies fell short of demand as the global economy began to recover from the coronavirus pandemic.

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Americans use an average of about 21 million barrels of oil a day, with about 40 percent of the consumption going to gasoline, according to the U.S. Energy Information Administration.

Domestic oil production accounts for more than half of the country’s consumption, but high prices have not forced companies to return to pre-pandemic production levels. The United States produces an average of 11.7 million barrels per day, down from 13 million barrels in early 2020.

Republican lawmakers said the problem was due to the Biden administration’s hostility to oil permits and the construction of new pipelines such as Keystone XL. Democrats have argued that the country should switch to renewable energy such as wind and solar energy, which could reduce dependence on fossil fuels and the influence of Russian President Vladimir Putin.

“I think the administration’s views on fossil fuels are something of a religion,” Senate Republican leader Mitch McConnell told Punchbowl News in an interview Thursday. “They are somehow unrelated to the needs not only of our country but also of the world. This policy is guided by the hard left, which the president almost never passes. And until this policy changes, we will have a problem. ”

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Oil producers were more focused on meeting the needs of investors than consumers, according to a study published last week by the Dallas Federal Reserve. About 59 percent of executives surveyed said investor pressure to maintain “capital discipline” amid high prices was a reason not to remind more, while less than 10 percent blamed government regulation.

The permanent release from reserves will be a significant amount and will be close to closing the shortage of domestic production compared to February 2020, before the coronavirus caused a sharp decline in oil production.

In November, the Biden administration announced the release of 50 million barrels from the strategic reserve in coordination with other countries. Even after the war between Russia and Ukraine, the United States and 30 other countries agreed to release an additional 60 million barrels of reserves, half of which came from the United States.

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According to the Ministry of Energy, which manages it, more than 568 million barrels of oil were kept in the reserve as of March 25.

The news about the administration’s planning was first announced by Bloomberg.

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Associated Press writer Michael Balsamo contributed to this report.

Copyright 2022 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Biden has been using oil reserves for six months to control gas prices

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