Topline
President Joe Biden will announce Wednesday he’ll release a further 15 million barrels of oil from the U.S. strategic reserve, according to U.S. officials cited in multiple reports, in a likely attempt to keep gas prices in check ahead of next month’s midterms after the OPEC+ group of oil-producing nations—including Russia and Saudi Arabia—announced production cuts earlier this month.
President Joe Biden speaks about the importance of electing Democrats who want to restore abortion … [+]
Key Facts
Biden’s anticipated announcement is the final tranche of the 180 million barrels the administration had promised to release in March, the Associated Press reported, citing White House sources.
The release will be immediate as the six-month timeline for the originally sanctioned release is set to lapse this month.
The president may also sanction the release of additional barrels from the strategic reserve during the winter in the event gas prices rise again, the report added.
The White House’s latest release is believed to be part of a broader effort to keep average national gas prices below $4 a gallon.
On Monday morning, the international benchmark Brent Crude futures stood at $90.84 per barrel—up from around $85 at the end of last month.
Surprising Fact
With the latest withdrawal, the U.S. strategic oil reserve will drop below 400 million barrels—its lowest level since 1984. According to the AP, Biden will also announce plans to replenish the reserve once oil prices drop below $72 a barrel.
Big Number
$3.854. That is the national average price of a gallon of gasoline in the U.S., according to a tracker run by the American Automobile Association. This is a slight dip from last week’s average of $3.922, but still higher than last month’s price of $3.677. Gas prices in the U.S. have been falling for more than seven days.
Key Background
Earlier this month, the OPEC+ group of nations announced a slash in global oil production by 2 million barrels a day to drive up oil prices. Even as he attempts to deal with economic and electoral challenges at home, Biden has promised that Saudi Arabia will face consequences for siding with Russia to back the cut. Other Democratic lawmakers have been more explicit, demanding a complete halt in the sale of all U.S. weapons to the Saudis. Washington is Riyadh’s biggest security partner accounting for more than 65% of all of its weapons imports. The Saudi decision was viewed as a slight towards Biden, who had made a visit to Jeddah in July to meet with Saudi Arabia’s de-facto leader Crown Prince Mohammed bin Salman. The resulting spike in oil prices is likely to hurt consumers in the West while undermining their efforts to impart economic punishment on Russian President Vladimir Putin for his decision to invade Ukraine.
Further Reading
Biden to release 15M barrels from oil reserve, more possible (Associated Press)
Source: https://www.forbes.com/sites/siladityaray/2022/10/19/biden-will-release-15-million-barrels-of-oil-from-reserves–heres-what-to-watch-for/